...Introduction Do international economics of free trade important in the United States of America and in the world of different countries? Therefore, according to the article of "Embracing the Challenge of Free Trade: Competing and Prospering in a Global Economy", Ben S. Bernanke, who is the author and the Chairman of the Montana Economic Development Summit 2007 Butte, MT, had said," international trade in goods, services, and assets, like other forms of market-based exchange, allows us to transform what we have into what we need or want under increasingly beneficial terms. Trade allows us to enjoy both a more productive economy and higher living standards" (Bernanke). Free trade is very important as international economics will cause both advantages...
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...Economic integration agreements come in three types: 1) bilateral, 2) regional, and 3) global. (Samii, 2011) Bilateral integration is where two countries cooperate in reducing tariffs. (Samii, 2011) Regional integration is where a group of countries are located in the same geographic area and agree to cooperate such as the European Union (EU). (Samii, 2011) And, global integration is where countries across the world agree to cooperate in trade agreements such as World Trade Organization. (Samii, 2011) Countries enter into these agreements seeking to reduce cost on both their imports and exports. In turn, countries will most likely see an increase in foreign direct investments resulting from trade blocs. (Curley, 2014) Trade blocs are created bringing countries closer together by eliminating tariffs. And as a result, demand changes based on the lower cost because now bulk productions are allowed. Consequently, the increased competition promotes greater efficiency within firms. (Curley, 2014) With some Trade blocs free trade is allowed within each country’s markets thereby encouraging each country to specialize in certain markets. (Economic Online, Unknown) In addition, jobs may be created because of the increased trade between members. (Economic Online, Unknown) And a final benefit is that firms inside the bloc are protected from cheaper imports from outside the blocs, such as the European Union show industry is protected from cheaper imports from China and Vietnam...
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...Slide 1: Title In January 1994 there was a new development; the North American Free Trade Agreement (NAFTA) was instituted between the United States, Mexico, and Canada creating the largest free trade area and richest market in the world. This one of the most important and wide-reaching treaties in the world. A treaty between Canada, Mexico, and the United States that was designed to foster greater trade between the three countries. It was one of interesting prospect and looked upon as the start of globalization. The attempt was to help with financial situations involving the all countries in the North American continent, especially those of United States, Mexico, and Canada. One major problem encountered were the economic stabilities of each country, especially in Mexico. There were issues of foreign debt, balance of payment problems, and exchange rate fluctuations. The agreement does well to commit to standards on environmental protection and labor laws but still strives to enforce those laws. The agreement did have some goals to help foster the partnerships between the countries. First and foremost to reduce trade barriers. These barriers cause imports to be of a higher priced than local goods. The object of the agreement was to participate in free" or "open" when goods and services can move into markets without restrictions, and prices are determined by supply and demand. Nations sometimes erect barriers to this free movement of goods and services, such...
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...American Free Trade Agreement (NAFTA) is an agreement between the United States of America, Mexico and Canada. The agreement creates rules in the trade block and it was established in 1994. The goal of the agreement is remove or decrease the tariffs and non-tariffs barriers to stimulate trade. The NAFTA agreement included: * Removing all tariffs on 99 percent of the good by 2004. * Protection of intellectual property * Removal of most foreign direct investments with a few protections established for each country * Removal of barriers on the cross-border flow of service * Application of national environmental standard * Establishing two commissions with the power to impose fines and remove trade privileges if needed Regional integration is not only for economical reasons but it is also political. There is much opposition within each country and it takes many years to have an agreement that satisfies ever member country. Pros and Cons for NAFTA Advantages The main purpose for NAFTA is to create a larger and more efficient base for the entire North American region. The first advantage for the members of NAFTA was to reduce the tariffs that had been imposed in all their products. The cost of the products is also controlled in member nations of NAFTA since the import cost are not inflated by taxes. Lastly, the benefit is mutual for US and Canada to move production to Mexico. The cost of labor in Mexico is much lower than in either the US or Canada. Moving...
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...also known as the North American Free Trade Agreement, is an agreement among the United States, Canada and Mexico designed to remove tariff barriers between the three countries. This 1994 agreement had resulted in benefits to the countries such as: increased wages, reduction of tariffs, and more trade. Regardless of NAFTAs benefits, it also has several negative impacts such as: excessive pollution and little changes to limit trade. Both, these benefits and costs have impacted the everyones lives within Canada, Mexico, and the United States after 1994, when the agreement was established. After NAFTA was...
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...Table of Contents Executive Summary 3 Issue Identification 4 Slowing Growth in NAFTA Trade 4 Continuation of NAFTA Strategy versus Expansion into Latin America 4 Taking Advantage of Economic Growth in Asia and Emerging Markets 4 Expanding Overseas 4 Environmental & Root Cause Analysis 5 Slowing Growth in NAFTA Trade 5 Continuation of NAFTA Strategy versus Expansion into Latin America 5 Taking Advantage of Economic Growth in Asia and Emerging Markets 5 Expanding Overseas 6 Alternatives and/or Options 6 Slowing Growth in NAFTA Trade 6 Continuation of NAFTA Strategy versus Expansion into Latin America 6 Taking Advantage of Economic Growth in Asia and Emerging Markets 7 Expanding Overseas 7 Recommendations and Implementation 7 Slowing Growth in NAFTA Trade 7 Continuation of NAFTA Strategy versus Expansion into Latin America 7 Taking Advantage of Economic Growth in Asia and Emerging Markets 8 Expanding Overseas 8 Monitor and Control 8 Executive Summary Since Canadian National Railway Company (CN)’s privatization by the Canadian government in November 1995, CN has not stopped growing its sales, profits, cash flow and, as a result, market value. Privatization and deregulation of the rail industry led to some of CN’s success, but CN had to cut costs and increase revenues. Cutting costs meant reducing workforce and closing or selling unprofitable tracks. It also meant investing in more efficient rail equipment and technology. Increasing revenues required focusing...
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...University of Economics Ho Chi Minh RESEARCH ESSAY DINH XUAN LOC EAP5 EAP 5 Essay Topic – September 2015 Economy The United Stated, Vietnam, and ten other countries are working together to reach an agreement called the Trans-Pacific Partnership. Once completed, the TPP will boost the economies, lower barriers to trade and investment, increase exports, and create more jobs for the countries involved. To what extent do you agree with the above statement? Refer to specific examples in your answer. The global economy in the twenty first century has changed rapidly with the trend of trade liberalization. The appearance of some high valuable bi- and multilateral agreements might affect strongly trading activities in the future, especially the Trans-Pacific Partnership (TPP) agreement. This free trade agreement (FTA) is one of the most challenging and largest pacts not only for TPP members, but also for the international exchange. Therefore, the purpose of this paper is to ascertain the direct and indirect effect of the TPP agreement to the worldwide trading. In fact, if the TPP is signed by twelve members, it will boost the development of the global economy significantly, as well as might change the exchange policy around the world. The TPP is a comprehensive agreement, so its provisions cover various sectors of national economy, however, with the limitation of time and specialized knowledge, this paper only assess the outcome of the TPP on export of agricultural products...
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...Free Trade Area of the Americas Free Trade Area of the Americas Introduction There are many different regional blocs around the world such as the current one effecting North America called North American Free Trade Agreement (NAFTA). Another trade agreement that has been under hot debate is the Free Trade Area of the Americas (FTAA), which further extends the NAFTA to include other countries from Latin America, Central America, and the Caribbean. This essay will discuss the FTAA, whether the concept of the FTAA is good for advancing the economy of the United States, and finally the impact it might have on North American firms. What is the FTAA? The Free Trade of the Americas (FTAA) is a potential trade bloc encompassing the western hemisphere. As of November, 2005 the negotiations have been stalled and are a continued work in progress (Hill, 2013). The FTAA, first held discussions in December 1994 at the first summit of the Americas where 34 democratically-elected Heads of State of the Western Hemisphere met and came to the conclusion of creating a Free Trade Area of the Americas (FTAA) (“Fast Facts,” 2009). The intention of the FTAA was to open up trade by eliminating trade barriers on goods and services between the 34 different participating countries. It took another 3 years, April 2008, for second summit where the 34 heads of state to sat down and formally inaugurated talks that established a deadline date...
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...HBS’s The Lego Group: Publish or Protect? Innovation and Intellectual Property Project 10.12.2014 Lego Group is the worlds’ fourth largest toy manufacturer. Their core product is a construction play design which allows for bricks to interlock together to design pre-designed or unique creations. In terms of volume and precision, the company relays on their core competence of “high volume precision molding” and has developed further strategies and technologies to ensure their growth and success in the area. The company is therefore faced with the difficulty in deciding how to protect this internal process and technology. Should this information be patented, kept as a trade secret, or published? This paper explores the options and proposes a possible solution for Lego Group, through careful research and analysis. Table of Contents 1 Introduction 2 Main Body 3. Conclusion 4 Bibliography Who is Lego Group? Lego Group was founded in 1932 by Ole Kirk Kritiansen in Billund, Denmark. In the beginning Lego Group made wooden toys and later (1946) changed their production to plastic interlinking building bricks after purchasing their first Plastic Moulding Machine. Lego group states that the “brick is their most important product” and although they have continued their almost 100 year expansion their core product remains to be their brick. In 1958 their “stud-and tube” coupling system was...
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...Pros and Cons of Globalization Dianna L. James MBA607 November 22, 2014 Jeff Knott, Instructor Abstract Within this writing, we had to research the pros and cons of globalization. However, one needs to know the definition of globalization. Globalization is a process in which we trade with other countries in the stock market or imports/exports of goods and services. However, globalization is not as easy as saying the word, there are many issues that are important to know, one is the laws of any given country. Korea is a good example where they have non-flexible laws that a business that wish to produce their good though their country they need to be abided by in all sense of the word. When visiting the country you need to be well aware of the culture differences and conform to the culture of the country you are visiting. There is one basic question associated with the pros and cons that needs to be answered. “How can firms and governments help to reduce the amount of resistance that might result from its implementation” (From instructions for week one assignment)? Key Words: Trading, Country, Laws, Pros, and Cons, Globalization Pros and Cons of Globalization Within this writing, we had to research the pros and cons of globalization. However, one needs to know the definition of globalization. Globalization is a process in which we trade with other countries in the stock market or imports/exports of goods and services. However, globalization is not as easy...
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...Brazil filed a lawsuit against the United States because they believed that the subsidies the United States gave to US producers violated WTO trade agreements. Brazil said that the financial aid given to the US gave their farmers an unfair advantage. The WTO agreed with Brazil and gave them permission to act out disciplinary measures against the United States. This authorization for retribution gave Brazil the right to enforce taxes on imports and exports as well as lift patent protections on US goods. However, these punitive measures could have had serious negative impacts on all industries in the United States. Therefore rather than remove the subsidies the United States provides its farmers, they decided to offer subsidies to Brazilian farmers...
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...Trans-Pacific Partnership In the present moment, President Obama is anxious to sign apparently on of the biggest trade deals in U.S. history. The name of this agreement is the Trans-Pacific Partnership (TPP). TPP is basically a proposed trade agreement between many Pacific Rim countries concerning a variety of matters of economic policy. This would link 11 countries on the Rim with America. This is extreme because the 12 countries account for 40% of the world GDP and one third of all trade (The Economist). Let alone taking down tariff barriers, the TPP is supposed to tackle things like intellectual property, labor and environmental standards. In my opinion, I would support the Partnership. The reason I would support the Trans-Pacific Partnership because of all of the advantages this deal has to offer. What the TPP does is boost exports and economic growth. As a result, this will create more jobs and prosperity for the 12 countries involved that make up 40% of the GDP. The exports would be focusing mainly on machinery, especially electrical, automotive, plastic, and agricultural industries (US Economy). Trade negotiators have predicted that this deal will make the world richer by it earning $220 billion more a year. This deal will create economic and stronger political ties with Asian allies, and this could help America retain some influence in Asia. This deal can really put the U.S. as one of the dominant leaders. Although this deal has many advantages, it...
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...the 1880's. By nature we do not trust other countries other than our own but globalization is beginning to change all that. There was one way to describe country-to-country relations back then: non-existent. Well at lease when we talk of relations that is founded in trust and understanding. We forge alliances only because of the things we get from it. But globalization has formed some semblance of unity among all us and the concerns of other nation that back then were opted to be resolved on their own are now an issue with other countries as well and all unite to propel themselves to a solution. Globalization is often used for its financial connotations. The influence it has however is not contained solely to the economy. Other international aspects such as social relations, political discourse and psychological manifestations are also a part of globalization. We have constantly heard the globalization pros and cons and the debate of these globalization pros and cons continue up until now. Here is a bit of a crash course of the pros and the cons of globalization. Pros of globalization are that more accessible market for anyone all over the world regardless of color, race, and social class. “Steady supply of cash to developing countries and even the well established ones. There is an increase in the production capabilities of companies and because of this they now have more freedom to customize their services and products fitted to the needs of the consumers. Political merging...
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...risk while maintaining a good return on investment. Hedging refers to managing risk to an extent that makes it bearable. In international trade and dealings foreign exchange play an important role. Fluctuations in the foreign exchange rate can have significant impact on business decisions and outcomes. Many international trade and business dealings are shelved or become unworthy due to significant exchange rate risk embedded in them. Hedging uses various techniques, it involves taking equal and opposite positions in two different markets (such as cash and futures markets). A hedge can be constructed from many types of financial instruments, including forward contracts, future contracts, options, swaps, many other types of over-the-counter and derivative products. Forward Contracts Generally, the most prominent instrument used in hedging for exchange rate risk management is the forward contract. Forward contracts are customised agreements between two parties to fix certain condition such as the currency exchange rate, interest rate or commodities price for a future transaction. It gives the buyer an obligation to purchase an asset and the seller an obligation to sell an asset at a specified price at a future point in time. Assume that a UK construction company, Wates just won a contract to build a new office building in US. The contract is signed for 1,500,000 dollar and would be paid for after the completion of the...
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...International Trade Advantages: Expanding businesses and increasing market shares: Canada for gas Improvising relations with other countries Selling surplus of natural resources: Canada has absolute advantage in lumber Job opportunities: Canada jobs rely on exports and when trading jobs are needed Disadvantages: Exploitation of natural resources Spread of viruses Ruining local businesses Decreases domestic production Canada’s competitive advatanges: People advantage: Hard working and intelligent workers, OECD higher education award Transportation Advantage: Boasts a sophisticated transportation network Importing & Exporting Indirect vs. Direct: Direct: a company exporting its own product / pros are control over negotiation and costs are shipping Indirect: Hiring another company to export goods into a country where there are export commission agents and export merchants Pros are volume and simplicity cons are company has less control over export process Trade balances Surplus: when exports are greater than imports Increasing Exports: 1. Businesses may receive subsidies to start up company 2. Give money as grants that do not have to be repaid to potential export products 3. Trade junkets are promotional programs from government Decreasing Imports: 1. Tariffs – putting a tax on imported goods 2. Quotas – Putting a limit on items 3. Embargoes – Putting complete ban on goods & services Trade Alliances 1. Free Trade – Countries`agreement...
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