Introduction
Political economy refers to the relationship between economic, law and politics of a country. It also tries to analyze the relationship between certain economic factors and the political ground of a country. The determinants of a suitable political economy are adverse in terms of the nature and influence to the economy of a country. Among the most common factors that influence the political economy of a country are free trade and environmental regulations. The two elements have unique relationship with each of them having influence to the other. However, all countries do not have same stand on these factors. For the sake of digging into sense a comparison between two countries within the same range of economic performance would give the extensive differences on how these factors may be employed in different countries. In this case, a comparison between Qatar and Kingdom of Saudi Arabia would serve a critical significance. The difference between the two countries on free trade and environmental regulations between the two countries may be defined by various differences. These factors may include; government regulations or rules on free trade expansion, labor relations and the maintenance of international environmental standards.
The different forms of free trades that exist in the business world can be extremely critical in defining the differences between certain countries. Qatar and the Kingdom of Saudi Arabia are major countries in the Gulf Cooperation Council (GCC). Qatar has had extensive influence in ensuring that free trade existed among various Arab countries. The GCC ensured there were no tariffs for the trade partners, the existence of free labor and capital movements among the GCC members. However, its efforts have succeeded with the government of the country being the leader in campaign for existence of fair trade between the country and the rest of the countries within the Gulf belt. It has also been a member of the World Trade Organization (WTO) by ensuring it is a major player in ensuring different countries in the world have a chance to operate in different free trade countries (Al-Maymoon, 2012).
On the other hand, after extensive delay the Kingdom of Saudi Arabia has had massive impact on the significance of free trade and the need for different organizations that may have influenced the existence of Free trade in the country. It is the founding country of the GCC with the aim of ensuring there is a critical and reliable room for trade between the countries involved in the trade partnership. After massive considerations of the impact of the involvement of the country in foreign trade with other country following existence of free trade, the country decided to engage in free trade signings with the countries who were members of the WTO. However, the country does not engage in trade with all countries. The main partners who have a fully free trade in the country are countries in the European Union as well as the United States (Nsour, 2011). For other countries heavy conditions have been imposed to control the status of trade between the Kingdom of Saudi Arabia and the rest of the countries.
Free trade and environmental regulations may not be discussed without critical evaluation of tariffs and quotas that may be involved or ignored in the trade. Tariffs and quotas define the amount of tax that the country is willing to charge its importers and the amount it may pay for exports. This is an extremely significant element in any international trade. Since 1946, Qatar remained an observer of the General Agreement on Tariffs and Trade (GATT). It did not intend to join the trade organization but aimed at direct involvement in the GCC’s free trade arrangements. However, in 1996, Qatar became a member of the GATT. Through the organization Qatar has been involved in consistent negotiations between the GCC and the United States, Japan, and the European Community. The negotiation is based on reduced tariffs and quotas for any business operations between member countries (Turner, 2007). This is because the countries involved are main trade partners and for the trend to be sustained extensive agreement needs be established between the countries.
On the other hand, the Kingdom of Saudi Arabia had remained ignorant of the GATT. It remained in the situation for a long time until it realized that there was need for adoption of the trade merit as it would lure extensive merits to the country. Therefore, in 1993 the country applied to be involved in the GATT. With time the Kingdom was accepted in the organization and it began operating under the principles of the organization. Engagement with the operations of GATT has opened the Saudi Arabia economy to adverse opportunity in trade with the other partners in the organization. This is one of the strategies that the country employed to engage in trade with other countries out of the GCC. Since then the country has been able to operate in adverse businesses with major countries like the United States and members of the European Union (Jeffreys, 2011).
Labor Standards
Free trade campaigns for countries becoming liberal in trade. This may be achieved by companies encouraging the government to impose competitive markets as well as regulating labor markets. Labor markets can only be regulated through trade unions. Therefore, it is agreeable that trade unions form an extremely critical definition of Free trade in any country. Trade unions are incredibly essential in defining how trade among people in a given country operates. The business may be between two nations or among members of the same country. Trade unions are well known of the significant roles in ensuring there exists proper business environment for members of a given country as well as in trade between countries.
Trade unions are extremely significant elements in free trade. They outline the underlying principles to govern proper trade policies. They are entrusted with the role of ensuring that all stakeholders in the business platform are well taken care of with most critical elements being evaluated and entrusted for suitable business environment.
For a long time, Qatar has been inconsiderate of trade unions and ignored any element that could have introduced them in the country. However, with time the government of the country has realized that this is an extremely significant element for concrete Free trade to occur in the country. The country allowed trade unions which would oversee proper business relationships among members of the country. Trade unions in Qatar ensure there are no tortures for employees. However, the case is different for the Kingdom of Saudi Arabia. In this country, trade unions are completely banned. The Free trade regulations dictate that there should be no trade unions operational in the country. This has been extremely influential to the political economy of the country. It bars excellent relationship between foreigners and domestic business people. The people in the most critical economic hangover are foreigners. The main reason for this is because they have been exposed to adverse challenges operating under an environment where their rights are denied completely. The Kingdom of Saudi Arabia has witnessed adverse cases where foreigners have been exposed to adverse elements of torture (Konisky, 2007).
International environmental Agreements
Trade policies and environmental conditions are intertwined on how they may influence business relationship between two or more countries. Environmental conditions differ from one country to the other with each country employing different rules on the environment to govern or control business activities that it engages with the rest of the globe.
Qatar and the Kingdom of Saudi Arabia are two countries which are almost the same on how they operate their international business and the processes they undertake to control trade between them and the rest of the world. They have not been left out in the consideration of environmental regulations and how they may influence business activities with their trade partners (Al-Abdulla, 2013).
Qatar being industrious nation air pollution is a key element. Industries in the country are involved in extensive release of harmful gases to the environment and there is need for proper management of the amount of gases released to the environment. Therefore, the government has ensured that there is policy that controls the amount of carbon to be released in the air. This has been done through employment of a policy which has to be signed by any company that is pushing for a chance to operate in the country. The bar has been raised higher for foreign companies to ensure that it has been easy to control the trade that may impact the environment of the country negatively (Al-Abdulla, 2013).
The Qatar government has been involved in controlling the materials used for construction in various industries in the country. Venting of CFCs among other ozone influencing materials has been prohibited. Asbestos which is a common element for roofing has also been abolished. Violations for above environmental conditions have remained extensively expensive to the economy of Qatar as well as to individual business persons. These conditions have been extremely influential to businesses in the country as it has barred most countries from operating their businesses in the country (USA Publications, 2012).
Saudi Arabia has not been left out in fostering environmental conditions that would prevent the country from harmful effects of environmental factors that may prevent sustainable environmental conditions. Saudi Arabia recognizes that the environment may be influential to the well being of the country and in its relationship with the rest of the world in business partnership. As an aim to sustain proper environment that would stand ample trade elements to influence the relationship of the country with the rest of trade partners. In this case, Saudi Arabia has employed a comprehensive list if guidelines and standards (Hylton, 2008). These standards range from waste water, to air pollution management to transportation of chemicals with sustainability being a significant principle incorporated in the set of measures.
For clean air, the government came up with the Ambient Air standard 2012. The set of standards outlines values for ambient air quality parameters and maintains responsibilities for the Presidency of Metrology AND Environment (PME) to ensure the kingdom enjoys quality air. Therefore, there were conditions that were set on industries on how they are supposed to manage their emissions. There are also Standards on Emissions from mobile sources 2012. These are supposed to govern the standards of emissions for mobile elements like agricultural machinery and mobile generators. Chemical management has not been ignored in the country as it has been involved in the formulation of the environmental standards of the country (Chakibi, 2013). Waste treatment is the other element on the list of environmental standards that the companies in the country have to pay tribute to in their operations.
The above environmental conditions in the Kingdom of Saudi Arabia have been extremely influential to foreign activities that take place in the country. It has become extremely expensive for international businesses to operate in the country. The country has been extremely cautious on business operations that may involve the country in hosting adverse companies that may have negative influence to the environment of the Kingdom. The environmental standards set by the Kingdom of Saudi Arabia have been influential to trade relations between the country and its major trade partners. One of the main victims of the environmental standards is the United States following most of its companies being barred from operating in the kingdom. In this case, the United States wants to dominate the Kingdom of Saudi Arabia but the government rises with adverse efforts to ensure that it sustains proper trade relations with the rest of the world as it sustains proper environment for business for both foreign and domestic companies (Chakibi, 2013).
Conclusion
Free trade and environmental regulations are main forces in the world business. Countries define different principles which dictate how they relate with each other in business. Therefore, different countries have different principles which define their free trade and environmental regulations. Qatar and the Kingdom of Saudi Arabia are main global economic players with each of them having unique free trade and environmental regulations.
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