Final answer:
Governments have major functions in international business, such as regulating trade, ensuring fair market operations, and protecting the environment and national security. They create laws, participate in global trade organizations, and restrict imports to protect national interests. Trade policies are determined at various governmental levels to encourage free trade and protect against domestic special interests.
Step-by-step explanation:
Governments play crucial roles in shaping the landscape of international business. These functions cover a broad spectrum, including the establishment of trade agreements, the creation and reinforcement of environmental and consumer protection laws, and the regulation of imports to defend national interests.
For instance, at a global level, governments participate in organizations like the World Trade Organization to create and revise rules governing international trade. Locally, they generate laws to ensure the orderly and fair operation of the marketplace. Such regulations include overseeing banking operations, controlling industrial emissions, and ensuring the safety and purity of consumer products.
Concern over environmental standards and national security, especially with essential imports such as oil, may lead governments to impose restrictions on foreign products to safeguard the environment, jobs, and national security. Additionally, trade policies may be enacted through administrative agencies, legislation, regional negotiations, or global treaties. Trade agreements are often struck to protect against internal special interest pressures and promote free trade.