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!
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