Trade effects in Brazil incorporate a wide variety of issues. According to author Filipe Lage-de-Sousa, Brazil experienced "trade shocks" in the 1990's (http://ideas.repec.org/p/wiw/wiwrsa/ersa06p441.html, 2011). Essentially, what this means is that the effects of "unilateral liberalization" and "drastic devaluation of exchange by 47% in 1999" had caused Brazil to cease trading--or, at least drastically reduce it. Lage-de-Sousa goes on to say that Brazil reduced its involvement in the industry sector from 52% to 47% (Ibid., ibid).
I was curious why this all would have come into a perfect storm of economic distress, and found that it has a lot to do with raising wages and increasing the number of jobs. There appears to be some sort of reduction in production, which in turn has laid off all of these workers. Hence, no revenue is generated for the workers, or the country, which leads to all of these financial problems.
According to another source, Sandra Polaski, in 2009, they expected that another Doha round would help Brazil out of its crises (http://carnegieendowment.org/2009/04/09/brazil-in-global-economy-measuring-gains-from-trade/exw, 2011). How this would be done is that hypothetically speaking, there would be less subsidies given to European countries for agricultural purposes--or nations part of the OECD--which would then provide more opportunity for Brazil and other countries like it to boost their agricultural productions. Thus, more jobs! I wonder how this is being done in today's era--with the global economy in a constant state of unrest? ...
Monday, November 7, 2011
Week 8 - U.S. - Morocco Free Trade Agreement
To start, one thing I found very interesting about the U.S.-Morocco Free Trade Agreement was that Morocco was the 1st African nation to begin free trade with the U.S. It was also the 2nd Arab nation to engage in free trade. On a side note, according to some sources, Israel was the first Arab nation to begin , but other sources say Jordan. After talking with two of my colleagues--one being from Lebanon and the other being from Morocco, they said it was Jordan, as Israel is not an Arab nation. So true! Israel is a Hebrew nation--and Jordan is Muslim.
That being said, I find that interesting and exciting that Morocco was the 2nd Arab nation to engage in free trade. It is a predominantly Muslim country, and being that the U.S. is non-secular, I didn't know if that would have been a problem or not. I suppose not, considering that "trade agreements" (I put "trade agreements" in quotes because the way business was conducted during pre-Colombian times was solely based on simple bartering and auctioning) are not necessarily religiously affiliated.
Anyways, I digress! I found that exciting that Morocco wanted to do a free trade agreement, and remove all tariff and non-tariff barriers to create an agreement with the United States. There were obviously elements of appeal from both ends that enticed each nation to want to have access to the other nation's goods and services. According to our Economics class lessons, a free trade area is "[an] association of trading nations, [where] members agree to remove tariff and non-tariff barriers amongst themselves...each deals with outsiders differently" (Robson, 2011). This basically means that Morocco and the U.S. can engage in trade without interference of other countries and their laws.
The agreement is still young (only about 7 years old), and of course there are kinks that need to be ironed out. For example, the U.S. only trades a fraction of what it wants from Morocco--about 0.1% or so. All raw materials. There must be a way to increase better trade between the two!
That being said, I find that interesting and exciting that Morocco was the 2nd Arab nation to engage in free trade. It is a predominantly Muslim country, and being that the U.S. is non-secular, I didn't know if that would have been a problem or not. I suppose not, considering that "trade agreements" (I put "trade agreements" in quotes because the way business was conducted during pre-Colombian times was solely based on simple bartering and auctioning) are not necessarily religiously affiliated.
Anyways, I digress! I found that exciting that Morocco wanted to do a free trade agreement, and remove all tariff and non-tariff barriers to create an agreement with the United States. There were obviously elements of appeal from both ends that enticed each nation to want to have access to the other nation's goods and services. According to our Economics class lessons, a free trade area is "[an] association of trading nations, [where] members agree to remove tariff and non-tariff barriers amongst themselves...each deals with outsiders differently" (Robson, 2011). This basically means that Morocco and the U.S. can engage in trade without interference of other countries and their laws.
The agreement is still young (only about 7 years old), and of course there are kinks that need to be ironed out. For example, the U.S. only trades a fraction of what it wants from Morocco--about 0.1% or so. All raw materials. There must be a way to increase better trade between the two!
Monday, October 24, 2011
Moran Shipping Agency - Part II
Continuing on from my previous blog, the shipping industry clearly proves to be a lucrative business to this day. And, to name one very successful agent, Moran Shipping Agency of Providence, Rhode Island, this shipping mogul ensures that "vessels get in and out [of the United States] in a cost-effective way" (Kelly, 2011). They take care of all logistics associated with products being shipped in and out of Rhode Island/the United States. This means dealing with Homeland Security, the Coast Guard, Customs Management, Immigration Services, adhering to the ISO standards, and many more! This one agency handles all of that--almost a mini-embassy in itself!
The Moran Shipping Agency in Providence oversees the dominant shipping of products such as scrap metal and steel (going overseas to China) to home heating oil, to metallurgic coal (which is used to make steel, and is scheduled to ship out for the first time sometime next month!). Very exciting indeed! And to think that we, Johnson and Wales students, are subject to these materials every day! Whenever driving in or out of the Harborside campus, I have noticed many substances on Shipyard street--that I am assuming are the ones Jason talks about? On occasion, there are piles at least 500 ft. high of different kinds of (sand), products that are treated with methane or sulfur (hence the very potent smells that emanate!), and many others.
I can't believe that Rhode Island's government was thinking of converting that area into hotels/making it a resort location. While it would be potentially extraordinary for visitors to see the bay so up close, the fact that it remains a shipping/maritime location adds even more appeal. Besides, being the Ocean State, there is essentially a beach every 10 square miles. I can even walk to one from my house (Gaspee Point).
One thing Jason mentioned that I also found very interesting was that the laws of the sea are different than the laws of land (countries). It is pretty much fair game, correct? I remember taking trips to Florida when I was younger, and we would go down to Key West. We would go deep sea fishing, but could go only to a certain point, at which the captain would say "we can't go any further than this, as these are now international waters." I always wondered what that meant? Does that mean that anything goes from there? If a bunch of Cuban pirates (if they exist?) decided to come by at that very moment, and we were 1 foot outside of what is deemed the 'United States' waters,' could they seize us? Would we be under Cuban law? How exactly does that work?
I also very much like the fact that Moran employs such an extensive use of MS Sharepoint. It really is an awesomely (word?) collaborative tool! When I worked at Educational Testing Service, we also used Sharepoint. It really is an easy way to find and share information amongst fellow employees, clients, and government officials (where applicable). It seems quite a bit more professional than Facebook, and is very secure! A server that contains sharepoint sites is pretty much impermeable--requires crazy data encryption! Anyways, slightly off topic there, but Moran, overall, will absolutely continue to be successful--as it incorporates fundamental ideas set by James Moran in 1937 with the solid ideals set forth by its current administration in 2011 ad infinitum. Keep it up, guys!
The Moran Shipping Agency in Providence oversees the dominant shipping of products such as scrap metal and steel (going overseas to China) to home heating oil, to metallurgic coal (which is used to make steel, and is scheduled to ship out for the first time sometime next month!). Very exciting indeed! And to think that we, Johnson and Wales students, are subject to these materials every day! Whenever driving in or out of the Harborside campus, I have noticed many substances on Shipyard street--that I am assuming are the ones Jason talks about? On occasion, there are piles at least 500 ft. high of different kinds of (sand), products that are treated with methane or sulfur (hence the very potent smells that emanate!), and many others.
I can't believe that Rhode Island's government was thinking of converting that area into hotels/making it a resort location. While it would be potentially extraordinary for visitors to see the bay so up close, the fact that it remains a shipping/maritime location adds even more appeal. Besides, being the Ocean State, there is essentially a beach every 10 square miles. I can even walk to one from my house (Gaspee Point).
One thing Jason mentioned that I also found very interesting was that the laws of the sea are different than the laws of land (countries). It is pretty much fair game, correct? I remember taking trips to Florida when I was younger, and we would go down to Key West. We would go deep sea fishing, but could go only to a certain point, at which the captain would say "we can't go any further than this, as these are now international waters." I always wondered what that meant? Does that mean that anything goes from there? If a bunch of Cuban pirates (if they exist?) decided to come by at that very moment, and we were 1 foot outside of what is deemed the 'United States' waters,' could they seize us? Would we be under Cuban law? How exactly does that work?
I also very much like the fact that Moran employs such an extensive use of MS Sharepoint. It really is an awesomely (word?) collaborative tool! When I worked at Educational Testing Service, we also used Sharepoint. It really is an easy way to find and share information amongst fellow employees, clients, and government officials (where applicable). It seems quite a bit more professional than Facebook, and is very secure! A server that contains sharepoint sites is pretty much impermeable--requires crazy data encryption! Anyways, slightly off topic there, but Moran, overall, will absolutely continue to be successful--as it incorporates fundamental ideas set by James Moran in 1937 with the solid ideals set forth by its current administration in 2011 ad infinitum. Keep it up, guys!
Moran Shipping Agency - Part I
Moran Shipping Agency has given me a lot to think about regarding shipping, trade, technology, and the global economy. I had no idea that shipping via bodies of water was still used at the frequency and at the calibur that it is! Honestly, before our class trip, I suppose I took all of that for granted --how imports get here to the United States.
I assumed (because of how much faster they are) that we primarily used planes to ship cargo. For obvious reasons, planes cannot carry as much as a ship can. Even the Airbus A-380, which can carry over 500 passengers and several hundred thousand gallons of fuel--that could convert to 300 tons of weight (http://www.airbus.com/aircraftfamilies/passengeraircraft/a380family/, 2011), this still has no comparison with how much a ship can carry (at least 30 times this!). Not to mention, cargo shipped via air will undoubtedly be astronomically expensive, as it is cutting short the amount of time needed for arrival. Reason being, the exporter (or importer, depending on how their contract is outlined), is paying for the speed of the aircraft itself, but they are also paying for the expedited customs review, fuel costs, pilot costs, etc.
Slightly off-topic, but my mother used to be a flight attendant, and she said that the general cost of operating an aircraft is $20M. Judging from what was said last week, while very expensive to operate, a ship is not nearly $20M. Regardless, I am pleased to know that it is still very much in operation--for commercial uses just as much as military/naval. The fact that they are steamship, though, is also very good. I don't know if this makes the ships go any faster (I should have asked this last week!), but it definitely is more environmentally friendly than using primarily gas or coal. I am curious what combustive element they are using though? The rest of this blog is To Be Continued...
I assumed (because of how much faster they are) that we primarily used planes to ship cargo. For obvious reasons, planes cannot carry as much as a ship can. Even the Airbus A-380, which can carry over 500 passengers and several hundred thousand gallons of fuel--that could convert to 300 tons of weight (http://www.airbus.com/aircraftfamilies/passengeraircraft/a380family/, 2011), this still has no comparison with how much a ship can carry (at least 30 times this!). Not to mention, cargo shipped via air will undoubtedly be astronomically expensive, as it is cutting short the amount of time needed for arrival. Reason being, the exporter (or importer, depending on how their contract is outlined), is paying for the speed of the aircraft itself, but they are also paying for the expedited customs review, fuel costs, pilot costs, etc.
Slightly off-topic, but my mother used to be a flight attendant, and she said that the general cost of operating an aircraft is $20M. Judging from what was said last week, while very expensive to operate, a ship is not nearly $20M. Regardless, I am pleased to know that it is still very much in operation--for commercial uses just as much as military/naval. The fact that they are steamship, though, is also very good. I don't know if this makes the ships go any faster (I should have asked this last week!), but it definitely is more environmentally friendly than using primarily gas or coal. I am curious what combustive element they are using though? The rest of this blog is To Be Continued...
Sunday, October 16, 2011
International Monetary Fund and Developing Nations
As outlined by the text and class discussion, the IMF (International Monetary Fund) serves as more of the World Bank than the actual World bank does. Seems interesting that they would call it a fund--fund as a singular object/concept--versus funds.
I guess because the concept of the IMF is so complex--being that it incorporates currencies from 187 different nations (and not a one is of higher ranking than the other)--its purpose is to provide a universal 'funding' to all of those member nations. Some nations who have surplus resulting from their financial activities can put their monies into the IMF, whereas the other nations who have deficits can withdraw from the IMF (interest free?). Then those deficit nations can 'pay back' the IMF but putting their own currency back in to the fund.
While I see the IMF as sort of a Federal Reserve for the World, (and a fantastic concept it is--being able to help one another out financially!) I also see it as very vast and seems almost too complicated. How can they keep track of all the different currencies, and make sure that all of the nations are fair in withdrawing/depositing? Seems like it could be a very stressful job--managing the IMF. Albeit the Board itself (http://www.imf.org/) consists of 187 nations--2 representatives per nation--like any standard membership organization, there is always the President, Vice President, Secretary and Treasurer. I feel like in this particular case, the Treasurer would have the most important job! Not to mention that the United States' alternate officer rep is Ben Bernanke, the Chairman of the Federal Reserve. I wonder if it is the same with all of the other nations?
In terms of how this relates to developing nations--regarding both institutionally and politically--I think that the IMF is definitely a positive influence. It is nice to know that it is there and available to provide support should the need arise. Howerver, at the same time, it should be restrictive in how it assists nations. This really relates in terms of fairness. Let's say that a (relatively) politically- and economically-sound nation has invested a good portion into the IMF (from a surplus), and then another nation (one not as politically or economically priveleged) just goes in and borrows what they need. Sure, they could write a promissory note, but that may not ensure payment back into the IMF. What would the IMF do then? Just kick that unstable nation out of the IMF membership? It seems like this would be much more complicated. I'm not entirely sure what kinds of things would happen!
I guess because the concept of the IMF is so complex--being that it incorporates currencies from 187 different nations (and not a one is of higher ranking than the other)--its purpose is to provide a universal 'funding' to all of those member nations. Some nations who have surplus resulting from their financial activities can put their monies into the IMF, whereas the other nations who have deficits can withdraw from the IMF (interest free?). Then those deficit nations can 'pay back' the IMF but putting their own currency back in to the fund.
While I see the IMF as sort of a Federal Reserve for the World, (and a fantastic concept it is--being able to help one another out financially!) I also see it as very vast and seems almost too complicated. How can they keep track of all the different currencies, and make sure that all of the nations are fair in withdrawing/depositing? Seems like it could be a very stressful job--managing the IMF. Albeit the Board itself (http://www.imf.org/) consists of 187 nations--2 representatives per nation--like any standard membership organization, there is always the President, Vice President, Secretary and Treasurer. I feel like in this particular case, the Treasurer would have the most important job! Not to mention that the United States' alternate officer rep is Ben Bernanke, the Chairman of the Federal Reserve. I wonder if it is the same with all of the other nations?
In terms of how this relates to developing nations--regarding both institutionally and politically--I think that the IMF is definitely a positive influence. It is nice to know that it is there and available to provide support should the need arise. Howerver, at the same time, it should be restrictive in how it assists nations. This really relates in terms of fairness. Let's say that a (relatively) politically- and economically-sound nation has invested a good portion into the IMF (from a surplus), and then another nation (one not as politically or economically priveleged) just goes in and borrows what they need. Sure, they could write a promissory note, but that may not ensure payment back into the IMF. What would the IMF do then? Just kick that unstable nation out of the IMF membership? It seems like this would be much more complicated. I'm not entirely sure what kinds of things would happen!
Tuesday, October 4, 2011
Openness to Trade Part 2
In adding to my previous blog on the Openness to Trade, I would definitely say I am open to trade. It is the basis for all interaction amongst human civilization. Without it, every single society would be isolationist--cut off from one another with tremendous amount of fear an uncertainty. Trade has helped to eliminate such things.
For example, if Christopher Columbus was not so passionate about trade, and decided not to go out on his famous journey, two entire continents would have (hypothetically speaking) never been discovered! Trade has opened many doors and bridged many gaps, and continues to do so to this day. Be it through fancy items like gold and diamonds, or something invaluable like education, trade is essential to sustain the human race. Who knows what the world would be like without it?
For example, if Christopher Columbus was not so passionate about trade, and decided not to go out on his famous journey, two entire continents would have (hypothetically speaking) never been discovered! Trade has opened many doors and bridged many gaps, and continues to do so to this day. Be it through fancy items like gold and diamonds, or something invaluable like education, trade is essential to sustain the human race. Who knows what the world would be like without it?
Openness to Trade
Generally speaking, from a minimalist consumer standpoint, I would say I am open to trade. As alluded to in class, we talked about how we learned about trade in history class, etc., where countries would trade with one another. What I found though, is it seems that trade initially started where people were seeking items of luxury, but then transititioned into items of necessity.
Think silkworms, tobacco, and (now) gasoline. These, many centuries ago (with exception of gasoline), were considered luxuries and were not readily available to the average consumer. Trade was an exclusive business that everyone (but only the rich and affluent could do so) would be a part of.
However, due to many economic advancements that have occurred, what was once viewed as a luxury now became necessity. This can be attributed to the increased demand for technology and travel. While tobacco products (depending on the nation) and silk are lesser a priority, gasoline is an essential commodity that most of the world uses. This of the cars, trucks, buses, planes, and much more that utilize it. Page 10 in the textbook discusses this in much greater detail.
Think silkworms, tobacco, and (now) gasoline. These, many centuries ago (with exception of gasoline), were considered luxuries and were not readily available to the average consumer. Trade was an exclusive business that everyone (but only the rich and affluent could do so) would be a part of.
However, due to many economic advancements that have occurred, what was once viewed as a luxury now became necessity. This can be attributed to the increased demand for technology and travel. While tobacco products (depending on the nation) and silk are lesser a priority, gasoline is an essential commodity that most of the world uses. This of the cars, trucks, buses, planes, and much more that utilize it. Page 10 in the textbook discusses this in much greater detail.
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