...In 2008 when the global economy took a turn for the worst Canada managed to come out on top. This is thanks to the export of natural resources and commodities. The Canadian government immediately took charge and start making budget cuts in order to have a full recovery by 2015. (D.R., 2011) Canada has a large threat in its path; its dependence on the outside world. Canada fared much better than was expected while other countries throughout the world declined and fell into a recession. There are nine specific key indicators that are important to consider when talking about Canadian economy. These are employment, unemployment, composite leading index, housing starts, consumer price index, real gross domestic product, retail sales volume, merchandise exports, and merchandise imports. (Statistics Canada, 2011) Employment and Unemployment In November 2011 the unemployment rate was set at 7.4%. The average unemployment rate in Canada from 1976 to 2010 was 8.53. (Trading Economics, 2011)The employment force is the number of people employed plus the number of people looking for employment. (Trading Economics, 2011) Unemployment includes those not looking for work, people in the military, and people institutionalized. (Trading Economics, 2011) Canada was able to add 93,000 jobs in June 2011, in effect dropped the unemployment rate to below the 8% mark. The gains in the labour force will offset nearly all of the losses that were a result of the downturn in 2008. (Contenta...
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...industries the country of my choice protects (if any). For the purpose of this paper I have chosen to explore the Netherlands and their comparative advantage. I chose this country for personal reasons as my father was born and raised in The Netherlands until he came to the United States at sixteen years of age. When you first think of the Netherlands you might think cheese or Tulips as they are well known for both of those products. The Netherlands has a high comparative advantage when it comes to skilled labor intensive work. First, let’s explore what comparative advantage is. Investopedia.com explains comparative advantage as “an economic law that demonstrates the ways in which protectionism is unnecessary in free trade. Comparative advantage argues that free trade works even if one partner in a deal holds absolute advantage in all areas of production- that is, one partner makes products cheaper, better and faster than its trading partner”. My interpretation of this definition is that a country, for example the Netherlands, will always have a comparative advantage of the flower industry even if another country can produce the same product for less. They will have this advantage because the Netherlands are known and thought of as having beautiful Tulips. Comparative advantage is vital to a country because it is often what will...
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...recorded a trade deficit for several decades, largely due to the fact that the country lacked energy resources and was entirely dependent on imports for its supply. However, the 1990s brought a change of fortune, beginning with the devaluation of the lira in 1992 which allowed many businesses to compete in overseas export markets, particularly in Asia markets and the United States. The reduction of oil and gas prices in the mid-1990s gave a further boost to small and medium-size companies, as did their aggressive promotion of their products, which enabled them to penetrate foreign markets. Today, "Made in Italy" is in many countries a well-regarded indication of quality. Italy benefits from the EU free market, which is not subject to any trade barriers or tariffs, and 56.8 percent of Italian exports, went to other EU countries in 1999. Italy's main export destinations within Europe are Germany (16.4 percent), France (12.9 percent), the United Kingdom (7.1 percent), Spain (6.3 percent), and the Netherlands (2.9 percent). The country's biggest commercial partner outside Europe is the United States, which takes 9.5 percent of Italy's export goods. Trade (expressed in billions of US$): | | exports | Imports | 1975 | 34.988 | 38.526 | 1980 | 78.104 | 100.741 | 1985 | 76.717 | 87.692 | 1990 | 170.304 | 181.968 | 1995 | 233.998 | 206.040 | 1998 | 242.332 | 215.887 | | | | SOURCE: International Monetary Fund. International Financial...
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...allocation of resources to the import competing domestic industry. Therefore, since 1948, when average tariffs on manufactured goods exceeded 30 percent in most developed economies, those economies have sought to reduce tariffs on manufactured goods through several rounds of negotiations under the General Agreement on Tariffs Trade (GATT). Only in the most recent Uruguay Or Simply Import duties or taxes imposed on goods entering the customs territory of a nation. Imposes for revenue collection, protection of domestic industry, political control. Non Tariff Barriers Nontariff barriers (NTBs) refer to the wide range of policy interventions other than border tariffs that affect trade of goods, services, and factors of production. Most taxonomies of NTBs include market-specific trade and domestic policies affecting trade in that market. Extended taxonomies include macro-economic policies affecting trade. NTBs have gained importance as tariff levels have been reduced worldwide. Common measures of NTBs include tariff-equivalents of the NTB policy or policies and count and frequency measures of NTBs. These NTB measures are subsequently used in various trade models, including gravity equations, to...
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...STRATEGIES FOR COMPETING IN INTERNATIONAL MARKETS: A GLOBAL INDUSTRY PERSPECTIVE Why Companies Expand into Foreign Markets Companies opt to expand outside their domestic market for any of four major reasons: * To gain access to new customers, raw materials, capital, skills and expertise – expanding into foreign firms offers the potential for increased revenues, profits, and long term growth even more so when home markets are mature. * To achieve lower costs and enhance the firm’s competitiveness - Sales volume from one country isn’t enough to fully capture manufacturing economies of scale. * To capitalize on its core competencies - A company with a competitively valuable competency or capability might be able to leverage themselves and make this competency work in a foreign market, too. * To spread its business risk across a wider market base - Companies may move abroad to diversify their risk associated with being in a single economy (e.g. foreign exchange risk, political risk). If the economy in one area falls, the firm might be ok in different economic markets. In addition to why companies expand into foreign markets, there are four other situational considerations unique to international operations: * Country to Country Cost Variations – Differences in wage rates, workers productivity, inflations rates, energy costs, tax rates, government regulations, etc crate sizeable variations in manufacturing costs from country to country. Plants in some countries...
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...domestic economic activities in relation to other countries and trade, we generally credit export contributions on the economy but imports generate jobs and create economic activity (Taylor, Fairchild, & Harris Jr). I know normally when I am calling a support center in the middle of the night I get a person with a heavy accent. I always believed that exports actually exported jobs out of the countries to other countries who are willing to work for cheaper than Americans. I know Nike is known for their bad labor practices in other countries but I also know that here in America they always hiring but decreasing the hours of current employees while capitalizing on their foreign business since they more than likely are getting “cheap labor” which is wrong. That goes back to the fact that even though international trade contribute to economic activity and employment, some still believe that the U.S. should not be a participant in international trading. Americans main concern here is job loss to countries like Asia and Latin America. The fact that economists have not done a particularly good job explaining international trade and how losses from trade, it is often highly publicized while the gains are less visible and spread around broadly it goes unnoticed. The loss of job fallacy comes into perception by not distinguishing between employment in specific industries and general employment levels in the economy. Open trade does not lead to loss of domestic jobs. It actually lead to increased...
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...Agricultural Subsidies and Development In recent decades, rich countries and organizations have taken measures to preserve their agro industry. In many of the largest countries as a measure to stimulate the production, subsidy is made for the proceedings or part of the necessary crops. Nowadays we are faced in a big question: What is the impact of these subsidies on world market prices and the producers do not receive subsidies for their production? There are many opinions from different parts of the world and it is like that because each country has its own point of view and depends how much are they involved in the situation. I will try to distinguish myself and to be objective. I think that if the subsidies were removed overnight the impact on the average consumer and producer will be very bad. Family farmers will be driven into bankruptcy and this will lead to production falls. With less production the market will have risen on food prices and this will reflect directly to the average consumer. Another thing that will probably happen is that big corporation will continue their growth and they will kill smaller farmers with their prices. This will cause no competition in the agriculture and will lead to unfairly high prices. Another important thing that may occur is the lower quality of the products, because every farmer corporation will try to get as much as they can and they will no longer care about the quality because the competition is gone. I think that the benefits...
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...income distribution, trade surpluses with the United States and other developed countries. Singapore is a small island had no resources other than its strategic location and the skills of its nearly 2.7 million people. In 1988 it claimed a set of economic superlatives, including the world's busiest port, the world's highest rate of annual economic growth (11 percent), and the world's highest savings rate (42 percent of income). Singapore is found that lived by international trade and operated as a free port with free markets. Its small population and dependence on international markets meant that regional and world markets were larger than domestic markets. In1988 the value of Singapore's international trade was more than three times its gross domestic product ( GDP). The country's year-to-year economic performance fluctuated unpredictably with the cycles of world markets, which were beyond the control or even the influence of Singapore's leaders. In periods of growing international trade.In 1985-1986, Singapore could reap great gains, but even relatively minor downturns in world trade could produce deep recession in the Singapore economy.The value of Singapore's international trade was more than three times its gross domestic product ( GDP). The country's year-to-year economic performance fluctuated unpredictably with the cycles of world markets, which were beyond the control or even the influence of Singapore's leaders. In periods of growing international trade, such as the 1970s...
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...considered to have a very well prospering and stably growing economy. But even being a strong and independent player, as any country on the international scene, it has got its own weaknesses and challenges. The given below SWOT Analysis shows Australia’s Strengths, Weaknesses, Opportunities and Threats. Strengths: * Today Australia is one of the best thriving amongst the world economies with a strong GDP indicator which has been growing over the last twenty years (!). It continues to grow strongly based on sound macroeconomic policies and improving in international competiveness. The primary strength of the Australian economy is the segment of business service and finance (20.7% GDP). In this condition, it is very attractive to new business in search for financing, capital and starting-up. The clear size of this segment allows for the greatest range and multiplicity of services * Other positive traditional indicators of economic performance: budget surplus since 2002, low inflation, rising household income, low unemployment rate (decreasing 3.3% over last ten years), and consistent rise in labor productivity, * The country has got a strongly performing mineral sector. It’s a major exporter of minerals, metals, and fossil fuels (up to 75% of its export) and agricultural products as well * Excellent domestic and international transportation services. There are almost 420 airports, numerous ports for ships, 38,550 km railroad tracks and 913,000 km worth roads throughout...
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...INITIAL GUIDANCE – 27 AUGUST 2012 EXPORT REPORT International Business G – 6241 Cameron Gordon, Associate Professor of Economics -- University of Canberra GENERAL ASSIGNMENT OVERVIEW This is initial guidance on how to prepare the three-part assignment to complete an “Export Report” for a target company of your choosing. I will be updating the guidance on parts 2 and 3 later on (though mainly expanding and providing more detail, not changing the substance). The details on part 1 will not be changed but possibly a little additional clarification will be added on Moodle if needed. You must choose a real company offering a real good or service to be exported to an overseas market where it is not currently being offered now. Having selected the company and product/service export candidate, you must then choose a minimum of three candidate country markets where that good/service might be exported. You will analyse the likely success that the candidate export might have in those potential markets and choose one of those country markets which, based on your analysis, you believe will have the greatest likelihood of success. You must not only analyse the information you collect but argue persuasively for the conclusions that you draw from that analysis. Your analysis should be informed by the theories and concepts presented in class (such as theories of trade and investment); your analysis should be informed by those theories and indicate an understanding of...
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...ABDT 3213 – International Marketing Week 2 Tutorial 1: Introduction to Global Marketing SECTION A: Coursework Briefing SECTION B: Discussion Questions 1. What are the basic goals of marketing? Are these goals relevant to global marketing? 2. What is meant by “global localization?” Is Coca-Cola a global product? Explain. 3. Describe some of the global marketing strategies available to companies. Give examples of McDonald that use the different strategies. 4. Describe the difference between ethnocentric, polycentric, regiocentric, and geocentric management orientations. 5. Define leverage and explain the different types of leverage utilized by companies with global operations. 6. What is “global marketing” and how does it differ from “regular marketing?” Giving examples of at least one major corporation explain these differences. SECTION C: CASE STUDY CASE 1-3: Acer Inc (page 57) 1. How did the “global markets-local markets” paradox figure into Shih’s strategy for China? 2. Can Acer become the world’s third largest PC company, behind Dell and Hewlett-Packard? 3. Growth in the U.S. PC market has started to slow down. Despite strong competition from Dell and Hewlett-Packard, Acer’s U.S. market share increased form 1 percent in 2004 to 3.3 percent by the end of 2006. What are Acer’s prospects for gaining further share in the United States? ABDT 3213 – International Marketing Week...
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...questions. Answers of these problems will be provided next week; however, you should try your best to answer these problems before check the answers. 1. A primary reason why nations conduct international trade is because: b. Resources are not equally distributed among all trading nations 2. International trade in goods and services is sometimes used as a substitute for all of the following except: d. Domestic production of different goods and services 3. International trade forces domestic firms to become more competitive in terms of: d. All of the above 4. Increased foreign competition tends to: c. Place constraints on the wages of domestic workers 5. International trade in goods and services tends to: d. Increase the amount of competition facing home manufacturers Chapter 2 Try to answer the study questions in page 60. Answers of these problems will be provided next week. Try to answer the following multiple choice questions. Page 64-66 1.Mercantilism: Regulation to ensure a positive trade balance.Critics: possible only for short term; assumes static world economy. Absolute advantage (Adam Smith) Countries benefit from exporting what they make cheaper than anyone else But: nations without absolute advantage do not gain from trade. Comparative advantage (David Ricardo) Nations can gain from specialization, even if they lack an absolute advantage 2: Absolute advantage: Countries benefit from exporting what they make cheaper...
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...non-tariff barrier named ‘green trade barrier’ in the international trade area. Green barrier is a special trade barrier with strict environmental standards and other environmental requirements as its main content. With the worsening of environment, many countries pay more attention to the environmental protection. However, according to the economic levels of different countries, great differences exist in environment standards of these countries which have resulted in the appearance of green trade barrier as trade protection. It is just like some former trade protectionism policies and influences the international trade greatly. With the fast development of international economy, the developed countries, in order to protect national market and consumer, are adopting various kinds of green trade barrier constantly in the trade of agricultural products. These kinds of method have already had serious impact on agricultural products trade of our country. By far, the markets of our agricultural products have mainly located in the developed countries and some new industrial countries and territories. In China, the trade of agricultural products, such as the trade of garden products, aquaculture, and livestock products, got balance in general. Those products rely on the environment and are easy to be rejected by the green trade barrier of developed countries. In recent years, it has been often reported that our exporters have sustained losses due to green trade barrier. Therefore, in the...
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...Research and Development: Essential Foundation for U.S. Competitiveness in a Global Economy Our hope is that there will be full employment, and that the production of goods and services will serve to raise our standard of living…Surely we will not get there by standing still, merely by making the same things we made before and selling them at the same or higher prices. We will not get ahead in international trade unless we offer new and more attractive and cheaper products…There must be a stream of new scientific knowledge to turn the wheels of private and public enterprise. (Vannevar Bush, 1945)1 U.S. Basic Research: A Need for Serious National Attention U.S. industry and the Federal Government are the primary pillars of financial support for the U.S. research and development (R&D)2 enterprise. The National Science Board (Board) observes with concern the indicators of stagnation, and even decline in some discipline areas, in support for U.S. R&D, and especially basic research, by these two essential patrons and participants. A decline in publications by industry authors in peer reviewed journals suggests a de-emphasis by U.S. industry on expanding the foundations of basic scientific knowledge. More specifically, research contributions by U.S. industry authors in the physical and biomedical sciences through publications in peer reviewed journals have decreased substantially over the last decade. In addition, in this century the industry share of support...
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...Chapter 7 Review This chapter looks at the political reality of international trade. Although many nations are nominally committed to free trade, they tend to intervene in international trade to protect the interests of politically important groups or promote the interests of key domestic producers. -Trade policies such as tariffs, subsidies, antidumping regulations, and local content requirements tend to be pro-producer and anti-consumer - Gains accrue to producers( who are protected from foreign competitors), but consumers lose bc they must pay more for imports -2 types of arguments for gov’t intervention in international trade: political and economic -Political arguments for intervention are concerned with protecting the interests of certain groups, often at the expense of other groups, or promoting goals with regard to foreign policy. Economic arguments for intervention are about boosting the overall wealth of the nation. -Strategic trade policy suggests that with subsidies, gov’t can help domestic firms gain first-mover advantages in global industries where economies of scale are important -Problems with strategic trade policy are two-fold: (a) such a policy may invite retaliation, in which case all will lose (b) strategic trade policy may be captures by specific interest groups, which will distort it to their own words -Trade policy uses 7 main instruments: Tariffs, subsidies, import quotas, voluntary export restraints, local content requirements,...
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