Final Prjct Eco

7/30/2019 Final Prjct Eco

1/42

1

Meaning of trade

Trade refers to buying and selling of goods and services for money or

money's worth. It involves transfer or exchange of goods and services formoney or money's worth. The manufacturers or producer produces thegoods, then moves on to the wholesaler, then to retailer and finally to theultimate consumer.

Trade is essential for satisfaction of human wants, Trade is conductednot only for the sake of earning profit; it also provides service to theconsumers. Trade is an important social activity because the society

needs uninterrupted supply of goods forever increasing and everchanging but never ending human wants. Trade has taken birth with thebeginning of human life and shall continue as long as human life existson the earth. It enhances the standard of living of consumers. Thus wecan say that trade is a very important social activity.


2/42

2

Different Types of Trade

Trade can be divided into following two types, viz.,

1. Internal or Home or Domestic trade.2. External or Foreign or International trade

A) Internal Trade:- Internal trade is also known as Home trade. It isconducted within the political and geographical boundaries of a country. Itcan be at local level, regional level or national level. Hence trade carriedon among traders of Delhi, Mumbai, etc. is called home trade.

Internal trade can be further sub-divided into two groups, viz.,

1. Wholesale Trade :It involves buying in large quantities from producers or

manufacturers and selling in lots to retailers for resale to consumers. Thewholesaler is a link between manufacturer and retailer. A wholesaleroccupies prominent position since manufacturers as well as retailers bothare dependent upon him. Wholesaler act as a intermediary between

producers and retailers.

2. Retail Trade :
http://www.gophoto.it/view.php?i=http://lh6.googleusercontent.com/_iFIztPmvqg8/TXIvzHBD5SI/AAAAAAAAEOM/mAI26jsmITA/Different-Types-of-Trade.png


3/42

3

It involves buying in smaller lots from the wholesalers andselling in very small quantities to the consumers for personal use. Theretailer is the last link in the chain of distribution. He establishes a link

between wholesalers and consumers. There are different types of retailerssmall as well as large. Small scale retailers includes hawkers, pedlars,general shops, etc.

B) External Trade:-

External trade also called as Foreign trade. It refers to buyingand selling between two or more countries. For instance, If Mr.X who is a

trader from Mumbai, sells his goods to Mr.Y another trader from NewYork then this is an example of foreign trade.

External trade can be further sub-divided into three groups, viz.,

1. Export Trade :When a trader from home country sells his goods to a trader

located in another country, it is called export trade. For e.g. a trader from

India sells his goods to a trader located in China.

2. Import Trade :When a trader in home country obtains or purchase goods from a

trader located in another country, it is called import trade. For e.g. a traderfrom India purchase goods from a trader located in China.

3.

Entrepot Trade :

When goods are imported from one country and then re-exportedafter doing some processing, it is called entrepot trade. In brief, it can bealso called as re-export of processed imported goods. For e.g. an indiantrader (from India) purchase some raw material or spare parts from a

japanese trader (from Japan), then assembles it i.e. convert into finishedgoods and then re-export to an american trader (in U.S.A)
http://kalyan-city.blogspot.com/2011/03/what-is-foreign-trade-types-and.htmlhttp://kalyan-city.blogspot.com/2011/03/what-is-foreign-trade-types-and.html


4/42

4

Importance of trade and global partnerships

Trade and investment is an essential component of economic growth andan important source of job creation and sustainable income for Africancountries, communities and producers.

Despite tremendous growth rates in 17 Africa countries over the lastdecade, sub-Saharan Africa has struggled to reap the benefits of globaltrade. In 1980, sub-Saharan Africa had a 3.6% share of world trade. By1998, this share had dropped to just 1.3% and in 2011, it was 2.1%.

Similarly, foreign direct investment (FDI) to the region remains a smallfraction of global FDI flows; however, the picture is improving. While theglobal financial crisis led to a general drop in FDI from 2008, sub-SaharanAfrica has fared relatively well compared to the G8 countries (Canada,France, UK, USA, Russia, Italy, Japan, Germany).

Africas economic growth also rebounded relatively quickly from the

global financial crisis. In 2011, economic growth in sub-Saharan Africawas 4.9%, and growth across 2012 and 2013 is predicted to average 5.4%;only the developing Asia region is predicted to have higher rates ofeconomic growth during this period.

Despite this progress, roughly one-third of the African population lives inpoverty and building Africas capacity for global and regional trade isessential for creating a pathway to sustainable livelihoods. Sub-Saharan

Africa faces some of the worlds greatest challenges in accessing local,regional, and global markets.

On the supply side, poor infrastructure for roads, bridges, and unreliableaccess to energy and under-developed telecommunications systems aresignificant barriers to trade and discourage investments. Other constraintsinclude a lack of business training, capital to build competitive industriesand financial services to help entrepreneurs bring their ideas to fruition.

Combined with regressive import tariff policies in many developedcountries, these constraints contribute to a reliance on raw exports, such as


5/42

5

minerals and agricultural products, rather than finished products. Thispresents significant challenges to expanding trade across the continent.

Sub-Saharan African countries also face external trade barriers, such ashigh import tariffs, which make it difficult for their products to compete inimportant markets like the U.S. and Japan. To worsen the situation,wealthy nations pay subsidies many of which are trade-distorting totheir producers, giving them an unfair advantage in the globalmarketplace. In 2011, agricultural subsidies in OECD countries reached$407 billion, which represents 0.95% of these countries GDP. More thanten times what was provided to sub-Saharan Africa in the same year.

Within Africa, poor regional integration both in terms of infrastructureand government policiesposes a barrier to African countries benefitingfrom trade with each other.

The opportunity:

Inclusive economic growth, driven by trade and investment, willhelp end poverty in sub-Saharan Africa.

Improving access to developed countries and neighboringmarkets, enhancing aid for trade to help countries address supply-sideconstraints and improve competitiveness, investing in infrastructure,increasing capital investment flows, and strengthening regional economicintegration can make trade can work for Africa. Even if Africa captured

only a small additional percentage of global trade, it would make a bigdifference. In 2011, 1% of global trade was worth $225 billion, more thansix times the development assistance sub-Saharan Africa received thatsame year.


6/42

6

ADVANTAGES OF INTERNATIONAL TRADE

The fundamental reason for international trade is to sell something that wedont need and to buy something we do need. Trade creates jobs, attractsinvestments, attracts new technology and materials, and offers Canadiansa wider choice in products and services. People spend, save, or pay taxeswith the money they earn in their jobs. The government uses taxes to

provide services, which creates more jobs. When people save, the capital

markets lend money to others, who will spend it on consumer goods, oropen or expand a business, therefore creating new jobs. When peoplespend money, it creates demand, which creates new jobs. If somethingoccurs to slow this expansion, the cycle reverses. Ex. higher taxes, higherinterest rates.

1.A country may import things which it cannot produceInternational trade enables a country to consume things

which either cannot be produced within its borders or production maycost very high. Therefore it becomes cost cheaper to import from othercountries through foreign trade.

2.Maximum utilization of resourcesInternational trade helps a country to utilize its resources

to the maximum limit. If a country does not takes up imports andexports then its resources remain unexplorted. Thus it helps toeliminate the wastage of resources.

3.Benefit to consumer:Imports and exports of different countries provide

opportunities to the consumer to buy and consume those goods


7/42

7

which cannot be produced in their own country. They thereforeget a diversity in choices.

4.Reduces trade fluctuations:By making the size of the market large with large supplies andextensive demand international trade reduces trade fluctuations. The

prices of goods tend to remain more stable.

5.Utilization of Surplus produce:International trade enables different countries to sell their surplus

products to other countries and earn foreign exchange.

6.Fosters International trade:International trade fosters peace, goodwill and mutual understandingamong nations. Economic interdependence of countries often leads to

close cultural relationship and thus avoid war between them.

7. Attracting investment

Attracting Investment follows trade. Many foreign companies willinvest in an office, factory, or distribution warehouse to simplify theirtrade and reduce cost. This investment also creates more jobs. It alsoattracts international investors

8.New Technology & MaterialsNew technology promotes competitiveness and profitability. If abusiness could create a machine that works better, faster, or cheaper(or all three), then the business will have produced a morecompetitive product for national and international markets. The

biotechnology industry in Canada is second only to the U.S.


8/42

8

9.Diverse Products and ServicesA century ago, Oranges were considered a rare treat; parents put

them in stockings for children. Now, we can buy oranges by the crateat local grocery stores thanks to better preservation and tradingtechnologies. Foreign trade turns the world into a giant market,delivering food, fashions, etc.

New services such as banking, travel, and consultation are alsoavailable now.Business competition is no longer on a city scale; instead, businessescompete against worldwide businesses. The result is better quality

goods, lower prices, and functional design.

10Job Creation

Unlike the battering that used to go on between trading partners, nowbusinesses receive money from selling their products or services toforeign businesses. When foreign businesses buy Canadian productsit creates jobs for Canadians. Exports are very important to

Canadians they create one out of three Canadian jobs. 40 percent ofwhat Canadians produce is exported. 1 billion exports means 6000jobs for Canadians. When trade is balanced businesses remainprofitable and may grow.

DISADVANTAGES OF INTERNATIONAL TRADE

The Global market has made it easy to buy and sell internationalgoods. While this has benefits, it also presents a problem. Such tradecan cause countries to be prosperous for a short time, but leads toeconomic exploitation, loss of cultural identity, and even physicalharm.


9/42

9

1.Import of harmful goodsForeign trade may lead to import of harmful goods like cigarettes,drugs etc. Which may run the health of the residents of the country.

E.g. the people of China suffered greatly through opium imports.

2.It may exhaust resourcesInternational trade leads to intensive cultivation of land. Thus it hasthe operations of law of diminishing returns in agricultural countries.It also makes a nation poor by giving too much burden over theresources.

3.Over Specialization

Over Specialization may be disaster for a country. A substitute mayappear and ruin the economic lives of millions.

4.Danger of StarvationA country might depend for her food mainly on foreign countries. Intimes of war there is a serious danger of starvation for such countries.

5.One country may gain at the expensive of Another

One of the serious drawbacks of foreign trade is that one country maygain at the expense of other due to certain accidental advantages. TheIndustrial revolution is Great Britain ruined Indian handicrafts duringthe nineteenth century.

6.Support of Non-Democratic Systems

Great hardship can be caused when people make poor decisionsabout land use or surplus production for export and do not take the

general populations welfare into consideration. For example:Landowners in Nicaragua and El Salvador want farmers to growcoffee beans because it is a very profitable cash crop, however, thefarmers would like to use the land to grow more food for theirfamilies. The farmers wishes are ignored because they do notactually own the land.

7.Cultural Identity Issues


10/42

10

Culture is a major export in the world. It displays and promotesvalues and lifestyles worldwide. The "culture consumer" in othercountries is sometimes overwhelmed by American ideas. Products

also carry cultural ideas and messages. There are values of the culturethe make the product.For example: Coca-Cola, McDonalds, Nike, and Microsoft all sell

products that symbolize American values and symbolize and reflectAmerican corporate culture.

8.Social Welfare Issues:Maintaining safety standards, minimum wages, workers

compensation and Health benefits are all social welfare issues thatcost business money. If a running shoe is made in a country wherethese issues are not met than the shoe can be sold for less in Canada.The down side to this is that substandard safety conditions causedeath and injury in the workplace.

9.Environmental Issues:

In Canada, businesses are urged by the government and

environmental groups through laws and regulations to keep our air,land and water clean. This is a costly process so businesses decide tomove their operations to countries; i.e. Mexico, where it is lessregulated.

10.Political Issues:Precious commodities such as gold, diamond, oil or farmland are soimportant for countries to have control that wars have been started

and as a result people are killed. Trade of these items has causedpolitical alliances that do not help the people in the trading nation butonly the powerful corporations that control the commodity.


11/42

11

4 PS ENHANCING TRADE PERFORMANCE:

Improving the trade route requires a major infrastructureproject the building of a long-planned bridge over the riverbutstrengthening trade in the region requires a great deal more thanconstruction. Easing the flow of inter-regional commerce alsorequires training personnel, updating the design of trade documents,integrating controls at border posts and diagnosing and reducing

barriers to trade.

Economies cannot grow without trade, and a successful trade strategyrequires comprehensive improvements that address a broad range ofissues to increase revenue and reduce poverty. Alongside physicalinfrastructure, governments must address human capacity, policy andregulation reform, technology updates and culture shifts.

While each country requires different changes to encourage trade toflourish, there are four key principles that underpin all effective tradefacilitation. Crown Agents, with more than a century of experience ininternational trade, has developed four P's for enhancing trade

performance.

PeopleRegardless of construction projects and policy reforms, no trade

project could be successful without sufficient human capacity. For

trade to flourish, governments must train staff to perform the tasksrequired, provide on-the-job support and mentoring and create a workculture that keeps competent employees doing their jobs well.Leadership development and organisational strategy are keycomponents to well-facilitated trade.

After gaining independence in 2011, South Sudan sought to increasetrade revenue to reduce dependence on oil income. A fundamental

piece of the customs reform was the training of 500 employees, manyof whom were trained as soldiers but had no prior customs


12/42

12

experience. By helping staff understand their key role in growing thecountry's economy, a sense of pride was instilled in the workforcethat further improved performance, with non-oil revenue quadrupling

in the last year.

PolicyEstablishing a supportive legal environment is crucial for tradefacilitation to be effective. Introducing new systems, such as joint

border posts or one-stop electronic customs filing, often requirecareful review of the legislative framework that guides a country'strade. In countries and regions where single window environmentsare being introduced, for example, policy needs to be changed to easerestrictions concerning the sharing of information among authoritiesand agencies.

In the Dominican Republic, where a single window for external trade

is being implemented, a number of measures have been taken to easethe process. A detailed analysis of the country's legislativeenvironment is underway, and reforms are being drafted at thehighest national levels, with a presidential decree to support thechange. International and regional trade policies are being consideredand reflected in the new policies when possible in order to maximisethe country's benefits from international commitments. CrownAgents has also equipped counterparts with the knowledge and tools

to more successfully negotiate on the international stage, for examplewithin the Sela (Latin American and the Caribbean economic system)regional grouping.

PlatformPhysical infrastructure is an important piece of the larger picture forimproving trade performance, and building or maintaining bridges,

ports, roads and border posts in good condition is a first step tomounting trade obstacles. Technological infrastructure is increasingly


13/42

13

key, as electronic systems are being used by governments to bettershare information across agencies and borders.

In the Philippines, where improved trade facilitation is a topgovernment priority, the implementation of electronic single windowtechnology has significantly impacted the ease of doing business. The

programme links the permit and license process electronically withinall agencies, allowing traders to submit all their customs data in asingle form rather than separately with a number of agencies.Philippine sugar farmers previously had to travel to the capital toapply for export permits, spending days away from their farms andhurting their livelihood. Allowing electronic submissions haschanged that, making the permits more accessible to farmers whocouldn't spend days travelling to Manila and reducing the releasetime for permits from the Bureau of export trade and promotion fromone month to five days.

Process

For countries seeking increased efficiency of trade, improvement ofbusiness processes and procedures is a fundamental step. Thisrequires analysing the current system, removing inefficiencies anddesigning a more harmonised process be it through cross-countrycollaboration or integration of multiple technological systems. At theGambia/Senegal border, increased efficiency is being achievedthrough the implementation of joint border posts, which will helpintegrate the trade and transportation processes on both sides of the

border. Creating a joint post requires cooperation among agenciesfrom both countriesa dialogue being facilitated by Crown Agents.

When implementing trade reforms, projects can focus too often on

the tangible change made through improvements to physical

infrastructure, thereby neglecting the less tangible underpinnings of

successful trade. Bridges and border posts are only truly effective if

they are staffed by well-trained individuals who work according to

efficient processes, underpinned by an enabling legal framework

allows for eased movement within trade restrictions. Only when all of


14/42

14

those elements are bolstered by well-maintained facilities can trade

flourish and revenues rise.

HISTORY OF THE UNITED STATES OF AMERICA

The 13 American colonies became the 13 United Statesof America in 1783, following their war for independence fromBritain. Before the war ended, they ratified a framework for theircommon efforts. These Articles of Confederation provided for a

union, but an extremely loose and fragile one. George Washingtoncalled it a "rope of sand."There was no common currency; individual states still producedtheir own. There was no national military force; many states stillhad their own armies and navies. There was little centralized controlover foreign policy; states negotiated directly with other countries.And there was no national system for imposing and collecting taxes.

Disputes between Maryland and Virginia over navigation rights onthe Potomac River, which formed their common border, led to aconference of five states in Annapolis, Maryland, in 1786. Alexander


15/42

15

Hamilton, a delegate from New York, said that such commercialissues were part of larger economic and political questions. What wasneeded, he said, was a rethinking of the Confederation. He and the

other delegates proposed holding a convention to do just that.Support from Washington, unquestionably the most trusted man inAmerica, won over those who thought the idea was too bold.

The gathering in Philadelphia in May 1787 was remarkable. The 55delegates elected to the convention had experience in colonial andstate government. They were knowledgeable in history, law, and

political theory. Most were young, but the group included the elderly

Benjamin Franklin, who was nearing the end of an extraordinarycareer of public service and scientific achievement. Two notableAmericans were not there: Thomas Jefferson was in Paris asAmerican ambassador to France, and John Adams was in London asambassador to Great Britain.

The Continental Congress had authorized the convention to amendthe Articles of Confederation. Instead, the delegates threw aside theArticles judging them inadequate for the needs of the new nation

and devised a new form of government based on the separation oflegislative, executive, and judicial powers. The gathering had becomea constitutional convention.

Reaching consensus on some of the details of a new constitutionwould prove extremely difficult. Many delegates argued for a strongnational government that limited states' rights. Others argued equally

persuasively for a weak national government that preserved state

authority. Some delegates feared that Americans were not wiseenough to govern themselves and so opposed any sort of popularelections. Others thought the national government should have as

broad a popular base as possible. Representatives from small statesinsisted on equal representation in a national legislature. Those from

big states thought they deserved to have more influence.Representatives from states where slavery was illegal hoped tooutlaw it. Those from slave states rejected any attempts to do so.

Some delegates wanted to limit the number of states in the Union.Others supported statehood for the newly settled lands to the West.


16/42

16

Every question raised new divisions, and each was resolved bycompromise.

The draft Constitution was not a long document. Yet it provided theframework for the most complex government yet devised. Thenational government would have full power to issue currency, levytaxes, grant patents, conduct foreign policy, maintain an army,establish post offices, and wage war. And it would have three equal

branches a congress, a president, and a court system withbalanced powers and checks against each other's actions.

Economic interests influenced the course of debate on the document,but so did state, sectional, and ideological interests. Also importantwas the idealism of the men who wrote it. They believed they haddesigned a government that would promote individual liberty and

public virtue.

On September 17, 1787, after four months of deliberation, a majorityof delegates signed the new Constitution. They agreed it would

become the law of the land when nine of the 13 states had ratified it.

The ratification process lasted about a year. Opponents voiced fearsthat a strong central government could become tyrannical andoppressive. Proponents responded that the system of checks and

balances would prevent this from happening. The debate brought intoexistence two factions: the Federalists, who favored a strong centralgovernment and who supported the Constitution, and the Anti-Federalists, who favored a loose association of states and who

opposed the Constitution.

Even after the Constitution was ratified, many Americans felt itlacked an essential element. They said it did not enumerate the rightsof individuals. When the first Congress met in New York City inSeptember 1789, lawmakers agreed to add these provisions. It tookanother two years before these 10 amendmentscollectively knownas the Bill of Rightsbecame part of the Constitution.


17/42

17

The first of the 10 amendments guarantees freedom of speech, press,and religion; the right to protest, assemble peacefully, and demandchanges. The fourth protects against unreasonable searches and

arrest. The fifth provides for due process of law in all criminal cases.The sixth guarantees the

right to a fair and speedy trial. And the eighth protects against crueland unusual punishment.

Since the Bill of Rights was adopted more than 200 years ago, only17 more amendments have been added to the Constitution.

Economy of USA


18/42

18

The United States has the largest, most technologically-advanced,and most diverse economy in the world. While the United Statesaccounts for only about 4 percent of the world's population, its GDP

is 26 percent of the world's total economic output. The Americaneconomy is a free-market, private enterprise system that has onlylimited government intervention in areas such as health care,transportation, and retirement. American companies are among themost productive and competitive in the world. In 1998, 9 of the 10most profitable companies in the world were American (even thenon-U.S. exception, Germany's Daimler-Chrysler, has a substantial

part of its operations in the United States). Unlike their Japanese or

Western European counterparts, American corporations haveconsiderable freedom of operation and little government control overissues of product development, plant openings or closures, andemployment. The United States also has a clear edge over the rest ofthe world in many high-tech industries, including computers, medicalcare, aerospace, and military equipment.

In the 1990s, the American economy experienced the second-longest

period of growth in the nation's history. The economy grew at anaverage rate of 3-4 percent per year and unemployment fell below 5percent. In addition, there were dramatic gains in the stock marketand many of the nation's largest companies had record profits.Finally, a record number of Americans owned their own homes. Thislong period of growth ended in 2001, when the economy sloweddramatically following a crash in the high-technology sector.

The United States has considerable natural resources. Theseresources include coal, copper, lead, phosphates, uranium, bauxite,gold, iron, mercury, nickel, silver, tungsten, zinc, petroleum, naturalgas, and timber. It also has highly productive agricultural resourcesand is the world's largest food producer. The economy is bolstered byan excellent, though aging, infrastructure which makes the transportof goods relatively easy.

Despite its impressive advantages, the American economy faces a

number of problems. Most of the products and services of the nationare consumed internally, but the economy cannot produce enough


19/42

19

goods to keep up with consumer demand. As a result, for severaldecades the United States has imported far more products than itexports. This trade deficit exists entirely in manufactured goods. The

United States actually has trade surpluses in agriculture and services.When adjusted for the surpluses, the U.S. trade deficit in 2000amounted to a record $447 billion. The United States has been able tosustain trade deficits year after year because foreign individuals andcompanies remain willing to invest in the United States.

In 2000, there was $270 billion in new foreign investment inAmerican companies and businesses.

Another major problem for the American economy is growth of a 2-tier economy, with some Americans enjoying very high incomelevels while others remain in poverty. As the workplace becomesmore technologically sophisticated, unskilled workers findthemselves trapped in minimum wage or menial jobs. In 1999,despite the strong economic growth of the 1990s, 12.7 percent ofAmericans lived below the poverty line. There are other wage

problems in the United States. Although the economy has grownsubstantially, most of the gains in income have gone to the top 20

percent of households. The top 10 percent of households earned 28.5percent of the nation's wealth, while the bottom 10 percent accountedfor only 1.5 percent. There is also a growing number of Americanswho are not covered by medical insurance.

Although there is great diversity in the American economy, servicesdominate economic activity. Together, services account for

approximately 80 percent of the country's GDP. Manufacturingaccounts for only 18 percent, while agriculture accounts for 2

percent. Financial services, health care, and information technologyare among the fastest growing areas of the service sector. Althoughindustry has declined steeply from its height in the 1950s, theAmerican manufacturing sector remains strong. Two of the largestAmerican corporations, General Electric and General Motors, havemanufacturing and production as their base, although they have both

diversified into the service sector as well. Meanwhile, despitecontinuing declines, agriculture remains strong in the United States.


20/42

20

One of the main trends in the agricultural sector has been the erosionof the family farm and its replacement by the large corporate farm.This has made the sector more productive, although there has also

been a decrease in the number of farmers and farm workers.

Since the middle of the 20th century, the United States hasaggressively pursued free and open trade. It helped found a numberof international organizations whose purpose is to promote free trade,including the General Agreement on Tariffs and Trade (GATT), nowknown as the World Trade Organization (WTO). It has also engagedin free trade agreements with particular nations. The North American

Free Trade Agreement (NAFTA) between the United States, Canada,and Mexico is an example of this. One continuing problem forAmerican companies engaged in foreign trade is that the UnitedStates is much more open to trade than many other nations. As aresult, it is easy for foreign companies to sell their goods and servicesin the United States, but American firms often find it difficult toexport their products to other countries.

Geography of the United States of America

The United States of America is the third largest country in the worldbased on population and land area. The United States also has theworld's largest economy and is one of the most influential nations inthe world.

Government of the United States

The U.S. government is a representative democracy with twolegislative bodies. These bodies are the Senate and House ofRepresentatives. The Senate consists of 100 seats with tworepresentatives from each of the 50 states. The House ofRepresentatives consists of 435 seats and are elected by the peoplefrom the 50 states. The executive branch consists of the Presidentwho is also the head of government and chief of state. On November

4, 2008 Barack Obama was elected as the first African AmericanU.S. president.
http://geography.about.com/od/lists/a/statecapitals.htmhttp://americanhistory.about.com/od/biographiesmr/p/barack_obama.htmhttp://americanhistory.about.com/od/biographiesmr/p/barack_obama.htmhttp://geography.about.com/od/lists/a/statecapitals.htm


21/42

21

The U.S. also has a judicial branch of government that is made up ofthe Supreme Court, the U.S. Court of Appeals, U.S. District Courts

and State and County Courts. The U.S. is comprised of 50 states andone district (Washington D.C.).

Economics and Land Use in the United StatesThe U.S. has the largest and most technologically advanced economyin the world. It mainly consists of the industrial and service sectors.The main industries include petroleum, steel, motor vehicles,aerospace, telecommunications, chemicals, electronics, food

processing, consumer goods, lumber and mining. Agriculturalproduction, though only a small part of the economy, includes:wheat, corn, other grains, fruits, vegetables, cotton, beef, pork,

poultry, dairy products, fish and forest products.

U.S. INTERNATIONAL TRADE IN GOODS AND SERVICES

Goods and Services

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis,through the Department of Commerce, announced today that totalJune exports of $191.2 billion and imports of $225.4 billion resultedin a goods and services deficit of $34.2 billion, down from $44.1

billion in May, revised. Juneexports were $4.1 billion more than May exports of $187.1 billion.June imports were $5.8 billion less than May imports of $231.2

billion.

In June, the goods deficit decreased $9.7 billion from May to $53.2billion, and the services surplus increased $0.2 billion from May to$18.9 billion. Exports of goods increased $4.0 billion to $134.3

billion, and imports of goods decreased $5.7 billion to $187.4 billion.Exports of services increased$0.1 billion to $56.9 billion, and imports of services were virtuallyunchanged at $38.0 billion.


22/42

22

The goods and services deficit decreased $8.2 billion from June 2012to June 2013. Exports wereup $6.0 billion, or 3.2 percent, and imports were down $2.3 billion,

or 1.0 percent.

Goods (Census Basis)

The May to June increase in exports of goods reflected increases inindustrial supplies and materials ($1.5 billion); capital goods ($1.5

billion); consumer goods ($1.0 billion); foods, feeds, and beverages($0.3 billion); and other goods ($0.3 billion). A decrease occurred in

automotive vehicles, parts, and engines ($0.4 billion).

The May to June decrease in imports of goods reflected decreases inindustrial supplies and materials ($2.5 billion); consumer goods ($1.6

billion); other goods ($1.2 billion); foods, feeds, and beverages ($0.4billion); and automotive vehicles, parts, and engines ($0.3 billion).Capital goods werevirtually unchanged.

The June 2012 to June 2013 increase in exports of goods reflectedincreases in capital goods ($2.3billion); consumer goods ($1.0

billion); and other goods ($0.5 billion). Decreases occurred in foods,feeds, and beverages ($0.6 billion) and industrial supplies andmaterials ($0.1 billion). Automotive vehicles, parts, and engines werevirtually unchanged.

The June 2012 to June 2013 decrease in imports of goods reflecteddecreases in industrial supplies and materials ($4.7 billion); capitalgoods ($0.4 billion); and other goods ($0.2 billion). Increasesoccurred in consumer goods ($1.1 billion); foods, feeds, and

beverages ($0.5 billion); and automotive vehicles, parts, and engines($0.3 billion).

Services


23/42

23

Exports of services increased $0.1 billion from May to June. Theincrease was mostly accounted for by an increase in travel ($0.1

billion). Changes in the other categories of services exports were

relatively small.Imports of services were virtually unchanged from May to June. Adecrease in other transportation ($0.1 billion), which includes freightand port services, was mostly offset by increases of less than $0.1

billion in several categories.

The June 2012 to June 2013 increase in exports of services was $3.1billion or 5.8 percent. The largest increases were in other private

services ($1.6 billion), which includes items such as business,professional, and technical services, insurance services, and financialservices, in travel ($0.7billion), and in royalties and license fees ($0.5

billion). Within other private services, thelargest increase was in business, professional, and technical services.

The June 2012 to June 2013 increase in imports of services was $1.2billion or 3.2 percent. The largest increases were in other private

services ($0.6 billion), in other transportation ($0.2billion), and inpassenger fares ($0.2 billion). Within other private services, thelargest increase was in financial services.

Goods and Services Moving AverageFor the three months ending in June, exports of goods and servicesaveraged $188.6 billion, while imports of goods and servicesaveraged $228.1 billion, resulting in an average trade deficit of $39.5

billion. For the three months ending in May, the average trade deficitwas $40.5 billion, reflecting average exports of $186.6 billion andaverage imports of $227.1 billion.

What does the us export?

More than two-thirds of U.S. exports are material goods ($1.547

trillion). One-third of all goods exported ($527 billion) are capital

goods. The largest sub-categories are industrial machines ($46billion), commercial aircraft ($45 billion), and semiconductors ($42


24/42

24

billion). Capital equipment also includes medical equipment,

telecommunications and computer equipment.

Another third is industrial supplies and equipment ($501 billion). Thelargest sub-categories are fuel oil ($60 billion), petroleum products($57 billion) and chemicals ($35 billion). Industrial supplies alsoincludes plastics, gold and steel.

Nine percent of U.S. goods exports are automobiles ($146 billion).

The fourth largest category is consumer goods ($182 billion). This

includes pharmaceuticals ($48 billion), cell phones ($22 billion) andgem diamonds ($18 billion).

The smallest category ($133 billion) is foods, feeds and beverages.

This includes soybeans ($26 billion), meat/poultry ($18 billion) and

corn ($10 billion). The remaining third of exports are services ($632

billion). Travel passenger services was the largest single category, at

$128 billion. Next was royalties and license fees, at $121 billion.

Passenger fares totaled $40 billion, while other transportation was

$43 billion. Government and military contracts was $20 billion. The

rest was miscellaneous privateservices.

What Does the U.S. Import?:

More than 80% of U.S. imports are goods ($2.275 trillion). The

largest category ($731 billion) is industrial machinery and equipment,

of which nearly half ($313 billion) is crude oil. Within this, the

largest category is oil and related petroleum products. In addition to

this are imports of fuel oil ($46 billion), petroleum products ($50

billion) and natural gas ($9 billion). Other large industrial imports are

iron and steel products ($30 billion), chemicals ($25 billion),

ferilizers ($16 billion).
http://useconomy.about.com/od/economicindicators/p/Crude_Oil.htmhttp://useconomy.about.com/od/economicindicators/p/Crude_Oil.htm


25/42

25

The second largest import sub-category is capital goods ($548billion). This includes computers ($60 billion), computer accessories($56 billion), and telecommunications equipment ($53 billion).

The third largest category is consumer goods, which totaled $517billion. Of this, apparel was the largest sub-cateogry, at $95 billion.Next was pharmaceuticals ($87 billion), cell phones ($81 billion) andtoys ($33 billion).

The fourth largest category was automotive vehicles, parts, and

engines at $297 billion. Food, feeds, and beverages was the smallest

category, at $110 billion. This includes fish ($17 billion), fruit ($12billion) and vegetables ($11 billion). The remaining 20% of imports

are services ($437 billion). Miscellaneous private services, primarily

financial services, was nearly half, at $191 billion. The next largest

category is travel passenger services, at $84 billion. Other

transportation services was $55 billion, while passenger fares totaled

$34 billion. The U.S. imported $42 billion in royalties and license

fees services. Last but not least was U.S. Government service imports($31 billion) which was primarily defense ($27 billion). The U.S.

imports more than it exports. This creates a trade deficit of $540

billion. Even though America exports billions in oil, consumer goods

and automotive products, it imports even more.
http://useconomy.about.com/od/supply/p/Capital_Supply.htmhttp://useconomy.about.com/od/supply/p/Capital_Supply.htm


26/42

26

2013:-U.S.A TRADE IN GOODS WITH CHINA

2013 4

2013 5

013 3

13 9

3 7

3 8

2013 .9 .4


27/42

27

Top 10 Countries That Import U.S. Products

The following are the top 10 countries importing U.S. products and

services in 2010, according to the most recent data available from theU.S. Census Bureau and other U.S. government sources.

No one should be shocked Canada is still the number one importer ofU.S. goods. However, there are a few surprises - such as Singapore

beating France for the number ten spot.

1. Canada: $228 Billion

Even with the global automotive industry in decline, the top U.S.product imported was automotive-related, including accessories andparts.

2. Mexico: $149 Billion

With all the media attention U.S. trade with China receives, it maycome as a surprise that Mexico still imports more U.S. goods and

services than the far more populous country of China. Like Canada,Mexicos primary import from the U.S. was automotive-related.

3. China: $82 Billion

At $82 billion, China is a distant third in U.S. imports compared toCanada and Mexico, but it is quickly rising. Chinas number oneimport is computer accessories, parts, and peripherals. Part of this is

related to the computer assembly industry, but also includes sales toChinese retailers and end-users.

4. Japan: $55 Billion

The primary import in 2010 from Americas fourth-largest tradingpartner was civilian aircraft. However, if you were to add all

agricultural exports to Japan, it would far outstrip aviation products.


28/42

28

5. United Kingdom: $44 Billion

With the U.S. travel market facing tough times, the aviation industryturned to the international market. Like Japan, the U.K.s primaryimport from across the pond was civilian aircraft. Following thiswere chemicals and primary resources (such as metal formanufacturing).

6. Germany: $44 Billion

Germany imported only $200 million less than the U.K. Its topimports from the states were pharmaceutical-related imports, such asdrug-preparation chemicals.

7. South Korea: $35 Billion

South Korea continues to be one of the most promising countries forU.S. exports. The number one U.S. export to the country was

semiconductors, followed by products for chemical manufacturing(not pharmaceutical chemicals like Germany).

8. Brazil: $32 Billion

Latin Americas largest economy is also home to some of theregions largest reserves of natural resources, like crude oil andnatural gas. Its biggest import from the U.S. was chemical

manufacturing, much of it related to its exploration and extraction ofthese natural resources.

9. The Netherlands: $31 Billion

Another surprise on this top ten list may be the tiny country of theNetherlands, population sixteen million. However, with one of thehighest incomes per capita of any nation, its people can afford toimport. Like its European neighbor Germany, its largest import from

the U.S. was pharmaceutical preparations.


29/42

29

10. Singapore: $26 Billion

The even smaller nation of Singapore made the list of the top ten

destinations for U.S. exports. Like South Korea - one of the otherAsian Tigers - Singapores primary import from the U.S. wascomputer/electronic-related.

Top Countries Exporting to the U.S.

Top Ten Countries Exporting to the U.S.

The list of the United States top ten countries to buy from isunsurprisingly similar to the list of the top ten countries it exports to.The more interesting thing is to understand what Americans are

buying from its top partners. The data are based on the most recentavailable from the U.S. Census Bureau and other reliable sources.

1. China: $334 billion

China is, by far, the biggest exporter to the U.S. The biggest U.S.import from China - computers - is related to the biggest U.S. exportto China - computer components. Much of U.S.-Chinese trade isrelated to the computer and electronic assembly industry.

2. Canada: $252 billion

The U.S. absorbs the vast majority of Canadas exports. The largestsingle product purchased is crude oil, followed by finishedautomobiles.

3. Mexico: $210 billion

The primary exports to the U.S. from south of the border aremanufactured/assembled goods, such as automobiles and computers,and crude oil.

4. Japan: $108 billion


30/42

30

Even with the dismal performance of the automotive industry, theUnited States primary import from Japan in 2010 was passengervehicles.

5. Germany: $75 billion

Like Japan and Canada, Germanys biggest export to the U.S. waspassenger vehicles. Healthcare-related products were the secondlargest.

6. United Kingdom: $45 billion

The U.K.s top sales to the U.S. were related to processed chemicals,including healthcare and aromatic products.

7. South Korea: $45 billion

Surprisingly, South Koreas exports to the United States were onlyabout $500 million less than the U.K.s. Primary products exportedinclude computer- and electronic-related goods.

8. France: $35 billion

While France didnt make the top ten list of importers for U.S.products, it definitely makes this list. The French aviation industrycomprised the countrys top exports to America.

9. Taiwan: $33 billion

Like South Korea - the other Asian Tiger on this list - Taiwans mainexport the United States was computer-related, such as consumerelectronics.

10. Ireland: $30 billion


31/42

31

Barely edging out Venezuela for the number ten spot, Ireland sold theU.S. primarily machinery and machinery-related equipment.

With the rebound of the global economy, 2011 should be a great yearfor international trade. It will interesting to see what this list lookslike after this year!


32/42

32

TOP US EXPORT PARTERNS

Below is the list of the largest trade partners of the United States ascompiled by the US Census Bureau. The United States has a bilateraltrade deficit with 12 of the 15. So I have ranked them according totrade deficit, with China in first place by a country mile. Mexico issecond, while Japan and Germany are third and fourth respectively.(With the EU as a whole, the US had a trade deficit of $80 billion).The list also includes oil exporters like Saudi Arabia and Venezuela,

but the lions share of the US trade deficit is in goods and services.
http://www.creditwritedowns.com/tag/mexico/http://www.creditwritedowns.com/tag/germany/http://www.census.gov/foreign-trade/balance/c0003.html#2010http://www.census.gov/foreign-trade/balance/c0003.html#2010http://www.creditwritedowns.com/tag/germany/http://www.creditwritedowns.com/tag/mexico/


33/42

33

TOP US IMPORT PARTERNS

I noted this morning that imports are less important to the Americaneconomy than people generally realize. Other developed countriestend to be much smaller and more specialized and so trade on boththe imports and exports side is much more important to them.Americans mostly trade with other Americans. But when we do

import, who do we import from? That theres a lot of China shouldcome as no surprise to anyone who follows the news. Indeed, Id sayfollowing the news probably leads to a mistake overestimation ofhow important China is to the US economy. Id say China accountsfor much more than 20 percent of total trade-related media coverage,even though the PRC is just 18.5 percent of our imports and less than17 percent of our total trade. By contrast Canada is systematicallyunder-covered in the American media. This is especially true when

you consider that Canada-based business establishments are muchmore likely to be directly competing with US-based ones.
http://yglesias.thinkprogress.org/2010/10/the-usa-is-not-very-import-dependent/http://yglesias.thinkprogress.org/2010/10/the-usa-is-not-very-import-dependent/http://yglesias.thinkprogress.org/2010/10/the-usa-is-not-very-import-dependent/http://yglesias.thinkprogress.org/2010/10/the-usa-is-not-very-import-dependent/


34/42

34

TOP TRADING PARTNERS

Total export


35/42

35

Import

Lets start by comparing Figures 1 and 2. These two pie chartsillustrate our trading relationships with our largest trading partners.Looking at Figure 1, we can see that Canada is our largest buyerinrelation to other countries buying our goods and services, theyconsume the most. After Canada, Mexico is our next largest buyer.So, geographically, our neighbors are buying the majority of ourexports.

Looking at Figure 2, the breakdown of US imports for 2010, you cansee that the vast majority of our imports are bought from China. This


36/42

36

probably comes as no surprise given the ubiquitous Made in Chinalabel. After China, we also purchase a great deal from Mexico andCanada.

In contrasting these two pie charts, one can observe thatfor themajority of our trade relationshipsthere is no one-for-one tradingoccurring. Over time this leads to trade imbalances, where onecountry buys much more than it sells to another country. The U.S.currently has a trade imbalance with China. In 2011, the U.S. tradeimbalance with China was valued at approximately 295 billion.

6

USA Trade BalanceCurrent and Historical Data

Current Trade Balance: $-40.3 Billion.

Economists Expect: -$40.8 Billion.

Source of Report: Bureau of Economic Analysis of the U.S.Department of Commerce.

Upcoming Release Commentary:

The U.S. trade deficit increased to $40.3 billion in April from $37.1billion in March, due to larger imports. The consensus projection wasfor a deficit of $41.2 billion. The rise in international trade gap waslargely due to the non-petroleum goods deficit which worsened to$37.8 billion in April from $33.7 billion the month before. Importsrose 2.4 percent after declining 3.7 percent in March, while exportsrebounded 1.2 percent after decreasing 1.0 percent the month before.

For May, the trade gap is expected to widen to $40.8 billion. We arelikely to see another up tick in imports, following last months gain.Exports were likely unchanged, with little signs of any further

increase in global demand for US exports.
http://www.globalization101.org/a-snapshot-of-us-trade#3ahttp://www.globalization101.org/a-snapshot-of-us-trade#3ahttp://www.globalization101.org/a-snapshot-of-us-trade#3ahttp://www.globalization101.org/a-snapshot-of-us-trade#3a


37/42

37

U.S. Trade Balance Historical Overview:

Historically, from 1992 until 2013, the United States Trade Balance

averaged a deficit equivalent to 31979.53 million USD, reaching thebest deficit at 831.00 million USD in February 1992, and the worstdeficit at 67351.00 million USD in August 2006.
http://www.census.gov/foreign-trade/Press-Release/2012pr/aip/related_party/rp12.pdf#page=6http://www.census.gov/foreign-trade/Press-Release/2012pr/aip/related_party/rp12.pdf#page=5http://www.census.gov/foreign-trade/Press-Release/2012pr/aip/related_party/rp12.pdf#page=4http://www.census.gov/foreign-trade/Press-Release/2012pr/aip/related_party/rp12.pdf#page=3http://www.census.gov/foreign-trade/Press-Release/2012pr/aip/related_party/rp12.pdf#page=2http://www.census.gov/foreign-trade/Press-Release/2012pr/aip/related_party/rp12.pdf#page=1


38/42

38

Market Impact Scenarios:

Trade balance data has the tendency to generate some volatility forthe USD. Since the United States has been running consistent tradedeficits, traders generally focus on the percentage change in the

deficit. A decrease in deficit will cause the US dollar to rally, while awidening deficit will lead to a potential fall in the value of thegreenback. Interestingly, a strong foreign exchange value of thedollar makes imports cheaper, while, weaker the dollar is comparedto other currencies, the less expensive goods and services are toforeigners, helping spurt export activity.

Understanding Trade Balance:

Trade balance is the monetary difference between the value ofimports and exports over the reported period of time. The headlinetrade balance figure is expressed in billions of dollars. Despite thedata being severely lagged compared to other consumptionindicators, traders closely watch the monthly trade balance figures toget early clues about any revision in GDP forecasts.

The United States is the worlds largest importer, but is not a leadingexporter. Since 1980, the country has been running consistent trade
http://www.census.gov/foreign-trade/Press-Release/2012pr/aip/related_party/rp12.pdf#page=7


39/42

39

deficits due to high imports of oil and consumer products. In recentyears, U.S. has been running huge trade deficits with China. The U.S.mainly imports consumer electronics goods, clothing and machinery

from China.

Top Ten Countries Exporting to the U.S.

The list of the United States top ten countries to buy from isunsurprisingly similar to the list of the top ten countries it exports to.The more interesting thing is to understand what Americans are

buying from its top partners. The data are based on the most recentavailable from the U.S. Census Bureau and other reliable sources.

1. China: $334 billion

China is, by far, the biggest exporter to the U.S. The biggest U.S.import from China - computers - is related to the biggest U.S. exportto China - computer components. Much of U.S.-Chinese trade isrelated to the computer and electronic assembly industry.

2. Canada: $252 billion
http://www.census.gov/foreign-trade/Press-Release/2012pr/aip/related_party/rp12.pdf#page=11http://www.census.gov/foreign-trade/Press-Release/2012pr/aip/related_party/rp12.pdf#page=10http://www.census.gov/foreign-trade/Press-Release/2012pr/aip/related_party/rp12.pdf#page=9http://www.census.gov/foreign-trade/Press-Release/2012pr/aip/related_party/rp12.pdf#page=8


40/42

40

The U.S. absorbs the vast majority of Canadas exports. The largestsingle product purchased is crude oil, followed by finishedautomobiles.

3. Mexico: $210 billion

The primary exports to the U.S. from south of the border aremanufactured/assembled goods, such as automobiles and computers,and crude oil.

4. Japan: $108 billion

Even with the dismal performance of the automotive industry, theUnited States primary import from Japan in 2010 was passengervehicles.

5. Germany: $75 billion

Like Japan and Canada, Germanys biggest export to the U.S. waspassenger vehicles. Healthcare-related products were the second

largest.

6. United Kingdom: $45 billion

The U.K.s top sales to the U.S. were related to processed chemicals,

including healthcare and aromatic products.

7. South Korea: $45 billion

Surprisingly, South Koreas exports to the United States were onlyabout $500 million less than the U.K.s. Primary products exportedinclude computer- and electronic-related goods.

8. France: $35 billion


41/42

41

While France didnt make the top ten list of importers for U.S.products, it definitely makes this list. The French aviation industrycomprised the countrys top exports to America.

9. Taiwan: $33 billion

Like South Korea - the other Asian Tiger on this list - Taiwans mainexport the United States was computer-related, such as consumerelectronics.

10. Ireland: $30 billion

Barely edging out Venezuela for the number ten spot, Ireland sold theU.S. primarily machinery and machinery-related equipment.

With the rebound of the global economy, 2011 should be a great yearfor international trade. It will interesting to see what this list lookslike after this year!


42/42

CONCLUSION

In the year 2011, Americans sold $2.1 trillion in goods and servicesto corporations and consumers in other countries. Goods and servicessold to other countries are called exports. In 2011, Americans also

bought roughly $2.66 trillion in goods and services from othercountries.

3Purchases from other countries are called imports. The

sum of U.S. exports and imports, $4.76 trillion, represents the total ofU.S. international trade for 2011.

Each day, in fact, Americans buy and sell more foreign goods andservices than are produced annually in more than 80 countries aroundthe world. That means that U.S. companies, and the averageAmerican citizen, are avid consumerswe buy a lot from othercountries. We also produce a great deal to sell to other countries; theU.S. is one of the top five exporters worldwide. The recent trade

performance of the United States and the rest of the world.
http://www.globalization101.org/webadmin/editor/editor/fckeditor.html?InstanceName=FCKeditor1&Toolbar=Default#1http://www.globalization101.org/webadmin/editor/editor/fckeditor.html?InstanceName=FCKeditor1&Toolbar=Default#1http://www.globalization101.org/webadmin/editor/editor/fckeditor.html?InstanceName=FCKeditor1&Toolbar=Default#1http://www.globalization101.org/webadmin/editor/editor/fckeditor.html?InstanceName=FCKeditor1&Toolbar=Default#1

Final Prjct Eco

Documents

Transcript of Final Prjct Eco