What challenges do countries with GDPs dominated by exports face?

http://www.theglobaleconomy.com/rankings/Exports/

The old adage of not “putting all your eggs in one basket” applies to individual investors in the financial markets as well as countries depending on a one-commodity-export such as the Middle Eastern countries. The issue for these countries is not only bad economics but also political suicide to depend on an exhaustible resource without parallel non-oil financial and economic trade markets whether domestic or international. Japan’s deflationary economy arisen from an export oriented GDP would be like a walk in the park compared with the disastrous consequences of current Middle Eastern politics and economic policies.

Below is a partial executive summary of the Annual Meeting of Arab Ministers of Finance April 2016 Manama, Bahrain

Prepared by Staff of the International Monetary Fund

EXECUTIVE SUMMARY FROM THE INTERNATIONAL MONETAR FUND (IMF)

“Despite their diversity in size, demographics and wealth, most oil-exporting Arab countries face similar challenges to create jobs and foster more inclusive growth. The current environment of likely durable low oil prices has exacerbated these challenges.

The non-oil private sector remains relatively small and, consequently, has been only a limited source of growth and employment. While some countries have made more headway than others in diversifying their economies, the energy sector, typically highly capital intensive remains dominant in many economies. However, it creates few jobs directly, while oil revenue is often used to finance an oversized public sector. Still, the employment situation varies greatly across countries: some GCC economies rely on foreign labor to fill private-sector jobs while other Arab oil exporters need to meet the needs of a fast-growing domestic labor force.

Because oil is an exhaustible resource, new sectors need to be developed so they can take over as the oil and gas industry dwindles. While some countries have ample reserves, hydrocarbon resources in a number of Arab countries could be depleted in the foreseeable future. However, even non-oil activities in many oil-exporting Arab countries are to some extent dependent on funding from oil revenues. The challenge therefore is to grow truly self-sufficient non-oil sectors that will provide a sustainable source of growth and employment even when oil resources are depleted. Moreover, even countries with large proven reserves need to save a larger share of their current oil income to promote greater intergenerational equity.

Over-reliance on oil also exacerbates macroeconomic volatility. When oil prices drop, as is presently the case, the related decline in fiscal revenue often requires cuts in public spending, which dampen growth in the non-oil sector and strain the sustainability of public employment.

Greater economic diversification would unlock job-creating growth, increase resilience to oil price volatility and improve prospects for future generations. It would also broaden the base for government revenue thereby reducing the reliance on oil and making the economy more resilient to oil price shocks”.

What are the implications of EU and NAFTA trading for international businesses? How may they affect a firm's investment decisions?

Regional economic integration has enabled countries to spend resources on issues that are relevant to their stage of development and also encourage trade with other countries.

Four main types of regional economic integration are in use today:

Free trade area

The most basic form of economic cooperation where member countries remove barriers to trade among themselves but are free to determine trade policies with nonmember nations. The North American Free Trade Agreement (NAFTA) is an example of this economic cooperation.

Customs union

This type of association provides economic cooperation like a free-trade zone. Barriers to trade are removed between member countries. The primary difference from the free trade area is that members agree to treat trade with nonmember countries in a similar manner as is The Gulf Cooperation Council for example.

Common market

This type of trade organization allows for the creation of economically integrated markets between member countries. Not only trade barriers are removed, but also any restrictions on the movement of labor and capital between member countries. Like customs unions, there is a common trade policy for trade with nonmember nations. The primary advantage is the free movement of workers who no longer need a visa or work-permit to work in another member country of a common market. An example is the Common Market for Eastern and Southern Africa (COMESA).

Economic union

This trade organizing principle is the most complete for it not only integrates the member’s markets but also adopt common economic policies. An example is the European Union (EU) where not only economic standardization is achieved but free movement of goods, services, people and capital have access to the entire union.

Globalization has been the trend in the past decade as it has been an increase in trading blocs which at present are more than one hundred agreements in place and more in discussion. Trade blocs are basically a free-trade zone, or close to one, formed by one or more tax, tariff, and trade agreements between two or more countries. Some trading blocs have been more substantive than others in creating economic cooperation but there are pros and cons in the creation of regional agreements.

Opportunities for work and Investment

Trade agreements create more opportunities for countries to trade with one another without any border barriers to commerce and investment. Reduction or removal of tariffs, results in lower consumer prices in the bloc countries. Many studies have concluded that regional economic integration contributes in an important way to the relatively high growth rates in the less-developed countries. Removing restrictions on labor movement, economic integration can help expand job opportunities. Free trade also promotes regional understanding and economic parity can also facilitate closer political cooperation.

Inward Trade

A negative issue with a trade bloc might come from members trading almost exclusively with each other which might result in a less efficient or more expensive producer because it is in a member country. In this scenario less efficient companies can be protected within the bloc agreement acting as a trade barrier with countries outside of the trading bloc. In the labor market, sudden shifts in employment can tax the resources of member countries.

Diminished Sovereignty

With each new round of discussions and agreements within a regional bloc, nations may find that they have to give up more of their political and economic rights. This issue prompted Brexit which is turning out to be a nightmare for the British Government with no one knowing how it will all end up.

Regional Economic Integration and Cooperation

The expansion of the World Trade Organization (WTO) has caused smaller regional agreements to become obsolete. Some of the regional blocs have also created side agreements with other regional groups leading to a inter-web of trade agreements and economic understandings.

North America: NAFTA

The North American Free Trade Agreement (NAFTA) came into being during a period when free trade and trading blocs were popular and positively perceived. The goal of NAFTA has been to encourage trade between Canada, the United States, and Mexico. By reducing tariffs and trade barriers, the countries have created an atmosphere where companies are befitting from the transfer of goods. Over the first decade of the agreement, almost all tariffs between Mexico, Canada, and the United States have been phased out.

Current Challenges and Opportunities under NAFTA

Canadian and US consumers have benefited from the lower-cost Mexican agricultural products. Similarly, Canadian and US companies have sought to enter the expanding Mexican domestic market. Many Canadian and U.S. companies have chosen to locate their manufacturing or production facilities in Mexico rather than Asia, which was geographically far from their North American bases.

Forward Looking

NAFTA has added to the already-strong U.S. influence on Mexico’s corporate and business practices. In particular, competitiveness and efficiency have become higher priorities, although company owners and managers still like to surround themselves with people they know and to prepare their sons and sometimes their daughters to be their successors. U.S. influence is also pervasive in the products and services offered throughout Mexico.

Even before NAFTA production facilities known as maquiladoras have been a regular feature of Mexican border towns, especially along the Texas and New Mexico borders. U.S. multinational companies, such as John Deere, Zenith, Mattel, and Xerox, are among the more than 3,600 “maquiladoras” in northern Mexico. Billions of dollars’ worth of products—from televisions to clothes to auto parts—are assembled in “maquiladoras” and either sold domestically or then shipped back, tax free, to the United States for sale to U.S. consumers.

China Seeks to Create a Trading Bloc in the Pacific

After the U.S. failing to approve The Trans-Pacific Partnership, the largest regional trade accord in record, China might now fill the space. On June 29, 2010, China and Taiwan signed the Economic Cooperation Framework Agreement (ECFA), a preferential trade agreement between the two governments and it’s the most significant agreement since the two countries split at the end of the Chinese Civil War in 1949. It is estimated to grow beyond the current $110 billion bilateral trade between both sides. China already absorbed Hong Kong in 1999, after the hundred-year lease to Britain ended.

The Taiwanese Government declared that“An economically stronger Taiwan would not only gain clout with the mainland but also have more money to entice allies other than the 23 nations around the globe that currently recognize the island as an independent state. Beijing is hoping closer economic ties will draw Taiwan further into its orbit.”

The Final Impact of Trade Agreements for Business an Investment

Overall, globalization have benefited businesses by having more consistent criteria for investment and trade as well as reduced barriers to entry. Companies that choose to manufacture in a trade bloc find it more efficient and profitable to ship goods between member countries in the bloc without incurring tariffs or additional regulations.

Over the past recent decades, there has been an increase in bilateral and multilateral trade agreements. These agreements are often called a “spaghetti bowl” of bilateral and multilateral trade agreements, because they are a messy mix of crisscrossing strands, like a bowl of spaghetti of trading alliances. Businesses due diligence is to monitor and navigate these evolving trade agreements to make sure that don’t negatively impact their businesses models.

With regard to Brexit, what would U.K. 'Temporary customs unit' with EU look like?

https://www.gov.uk/government/publications/future-customs-arrangements-a-future-partnership-paper

Brits need respond to questions about their inner motivation for Brexit

· Why is Britain’s hard line Brexiteers asking for privileges with the EU but with none of the responsibilities?

· Do Brits think they are more equal than other EU members?

· UK suggests 'untested' customs system with EU. Borders erected for people but not for goods?

· Britain wants a temporary customs union with EU but Brexit will face a fight from Brussels and Ireland.

· During this period, it would also want to negotiate its own international trade deals - something that cannot be done as an EU customs union member.

Guy Verhofstadt, the European Parliament's chief Brexit negotiator, has tweeted: "To be in & out of the Customs Union & "invisible borders" is a fantasy. First need to secure citizen’s rights & a financial settlement”, and the size of the UK's "divorce bill" - need to be agreed first.

Opposition politicians criticized May’s government for wanting to have "their cake and eat it too", while pro-Brexit campaigners said Britain was taking a "defeatist attitude" by accepting it could not implement new trade deals during the interim period. However, former Labor's PM, Tony Blair has said repeatedly the process of Brexit can and should be stopped. Brexit supporters want to control arrivals of workers, as they accuse migrants of taking jobs, undermining wages and overloading public services – never mind that foreign-born workers have a major participation in running hospitals, doctors' surgeries and other vital services to the overall economy.

Joining The European Free Trade Association (EFTA), which governs free trade between Norway, Iceland, Liechtenstein and Switzerland, would allow the U.K. to apply for membership in the European Economic Area (EEA), that grants free access to the EU’s single market. This option which is often dubbed the “Norway model” would preserve current trade ties with the EU.

Boris Johnson, loud proponent of Brexit has been backpedaling some of his hard-line Brexit stances by saying that “with goodwill and imagination, it could be done” —referring to free movement of EU nationals

But adopting EFTA rules is a toxic idea for many hard-line Brexiteers because it would require the U.K. to accept the four founding EU freedoms of goods, services, people and capital. And these issues were central motivation for many people to vote for Brexit like taking back control of immigration policy. The U.K. would also have to fully implement EU laws and regulations while not having a say in drafting or vetoing them.

Guntram Wolff, director of Bruegel, an influential Brussels-based think tank recently stated that although “EFTA’s members are not directly bound by the European Court of Justice (ECJ), the Luxembourg-based EFTA court, which largely follows the jurisdiction of the ECJ, does have oversight.”

Officials in Brussels think that once the reality of a “hard Brexit” sinks in where British manufacturers and industry associations see it coming closer, the U.K. might look at the Norway option, at least as a temporary solution.

The view has arisen from recent British government backtracking from earlier hard-line stance on Brexit. British Prime Minister Theresa May, has indicated that free movement of EU citizens post-Brexit could be permitted as both sides “implement” their future relationship. When asked about the chances of a transitional Norway-style relationship, a government spokesperson in London did not rule out such a possibility.

Nevertheless, this would be an imperfect solution as the proposal comes with some kinks for the EU. British membership in EFTA would also come with a chair for a British judge within the EFTA court, which would lead to concerns about a conflict of interest. For example the misbehavior of a British bank where London could end up threatening the enforcement of EU law.

Relative to imports and exports to other nations, what is the size of NAFTA?

On November 1, 1993, Maastricht, Netherlands the EU was founded as the largest economy in the world with a GDP per capita of €25 000 for its 500 million consumers. The North American Free Trade Agreement (NAFTA) was entered into by the United States, Canada, and Mexico and went into effect on January 1, 1994 and it became became the largest free market in the world. The combined economies of the three nations at that time were measured at $6 trillion and directly affected more than 365 million people. Both the EU and NAFTA were created to eliminate tariff barriers to agricultural, manufacturing, and services; to remove investment restrictions; and to protect intellectual property rights. One of the premises was that small businesses were among those expected to benefit the most from the lowering of trade barriers since it would make doing business in the trade blocs less expensive and would reduce the red tape needed for trade.

Highlights of NAFTA include:

Before NAFTA, a tariff of 30 percent or higher on export goods to Mexico was common, as well as long delays caused by red tape. About half of the tariffs were abolished immediately when the agreement took effect, the remaining tariffs were for gradually eliminated. Among the businesses specifically covered by NAFTA are construction, engineering, accounting, advertising, consulting, management, architecture, health-care, commercial education, and tourism.

NAFTA Standards

The three NAFTA countries agreed to toughen health, safety, and industrial standards to the highest level among the three countries. In addition, national standards could no longer be used as a barrier to free trade. Promptness of export-product inspections and certifications was swiftly improved.

Additional Understanding

This addressed the concern that Mexico's lower wages would cause U.S. companies to shift production to that country, and to ensure that Mexico's increasing industrialization would not lead to rampant pollution. The three countries agreed to establish commissions to handle labor and environmental issues by empowering the commissions to impose steep fines against any of the three governments that failed to follow its laws consistently. Environmental and labor groups from both the United States and Canada, however, have repeatedly charged that the regulations and guidelines have not been enforced.

Key Provisions

One of the key provisions of NAFTA was the concept of "national goods" status to products meaning that no state, provincial, or local governments could impose taxes or tariffs on those goods. In addition, customs duties were either eliminated at the time of the agreement or scheduled to be phased out over time.

The U.S. Chamber of Commerce, which represents the interests of small businesses, was one of the most active supporters of NAFTA, organizing the owners and employees of small and mid-size businesses to support the agreement. This support was crucial in countering the efforts of organized labor to stop the agreement.

NAFTA leveled the playing field by allowing small firms export to Mexico at the same cost as the large firms and by also eliminating the requirement that a business needed to establish a physical presence in Mexico in order to do business there. The lifting of these restrictions meant that the new markets were wide open to small businesses that had done business only in the United States. It was regarded particularly important for small businesses that produced goods or services that had matured in U.S. markets.

Criticism of NAFTA

Much organized opposition to NAFTA was the cheaper labor but also strong among environmental groups, who contended that the treaty's anti-pollution fundamentals were inadequate. This criticism has not abated since NAFTA's implementation and both Mexico and Canada have been cited for environmental carelessness. However, North American business interests have sought to weaken a key NAFTA side accord on environmental protections and enforcement. Moreover, NAFTA’s passage, has gained satisfaction and support from American business interests.

Critics of the agreement argue that NAFTA has been at least partially responsible for trade deficits as well as the striking loss of manufacturing jobs experienced in the U.S. over the last decade. Nonetheless, manufacturing jobs began to decline before the NAFTA agreement. NAFTA remains a lightning rod for political opinions to include globalization and free trade in general. However, most experts agree that job losses are mostly due to production automation and competitiveness from new and industrial production of intermediate and finished merchandise.

What is the nature, scope and content of population Geography?

The need for a more detailed account of demographic characteristics resulted in an inclusion of micro details to the macro level studies, which, in turn, facilitated population mapping. Population mapping has a long tradition in geography and early on maps were largely confined to distribution and population density aspects.

Increasing use of quantification, aided by computers helped geographers handle large data sets. The start of demographic transition in Europe, in the middle of the eighteenth century, resulted in population growth at a rate unknown previously in human history. At the turn of the twentieth century, most of the developed countries had completed the transition while the world population continued to grow at increasing pace

Population Geography as Defined by its Subject Matter

According to the existing literature on the subject, population geography has become an independent sub-field of human geography and it is a comparatively recent phenomenon. The discipline can be interpreted as the study of population in a spatial perspective that also implies the investigation into human covering of the earth and its various occupations with reference to physical and cultural environmental issues. Since most of the world humanity lives in the less developed parts of the world, a significantly larger proportion of the net addition in world population during the first half of the twentieth century came from this part.

The field is concerned with a set of investigation subjects:

• A historical perspective of pre-historic and post-historic account of population
• Dynamics of number, size, distribution and growth patterns
• Qualities of population and their regional distribution
• Size and distribution, between rural and urban groupings of population and its interactions
• Dynamics, past and present trends in growth and its components of population change such as fertility, mortality and migration.
• Composition and structure, of demographic characteristics classification by age, sex-distribution and marital status.
• Social characteristics like of caste, racial, ethnic, religious and linguistic composition.
• Literacy levels of educational attainment and economic characteristics of the workforce participation rate and workforce structure.

The link between population growth and environmental degradation, coupled with economic development varies a great deal from one part of the planet to another and it depends on a variety of socio-economic parameters. These are the areas of concern for a population geographer.

What is a trading fund? Can a company donate a trading fund to any NGO or trust?

Over millennia human societies across the globe established progressively closer contacts to the recent pace of global integration. Unparalleled changes in communications, transportation, and computer technology have made the world more interdependent than ever. Multinational corporations manufacture products in many countries and sell to consumers the world over. Money, technology and commodities move swiftly across national borders. Beside products and finances, ideas and cultures circulate freely which has resulted, in laws, economies, and social movements being formed at the international level. The great financial crisis of 2008-09 has revealed the dangers of an unstable, deregulated, global economy but it has also given rise to important global initiatives for change.

NGOs depend on money from a variety of sources, including individual donors, foundations, corporations, and governments. An NGO is bounded to what it can and cannot do to where the money comes from affecting the effectiveness and neutrality of NGOs. Funding Issues have become particularly challenging, following the economic crisis.

NGOs are the representatives of independent citizen organizations that are increasingly active in policy making at the United Nations. These organizations are often the most effective voices for the concerns of ordinary people in the international arena. NGOs include the most outspoken advocates of human rights, the environment, social programs, women's rights and many more issues.

Where is the best state in the USA to start an export/import business?

Any new export business whether of merchandise or services must start with the basics of market research and surveys of the departing and receiving locations for availability of facilities, transport, warehousing etc.

· Market Research for the product or service

· Mass-market consumer, heavy industry, light industry, medical or hospital use, government, business or professional.

· List of countries of origin and destination targeted for sale of merchandise/services.

· The trade channel such as direct sales, representative, distributor or commission representative.

· Surveying Export Manufactures

A small percentage of domestic producers export their manufactures. So, one marketing goal is to convince these corporations that they can increase profits by exporting to specific target countries.

Once the Target Market has been defined other housekeeping items need to be address:

· Startup Costs

· Invoicing

· Operations

· Marketing

· Resources

Incorporation needs to be defined:

· Export trading company

· Export management company

· Manufacturer's representative

· Manufacturer wholesale distributor

· Manufacturer Broker

· Retailer

Recommendations and Resources

· Import search mission abroad

· Trade shows attendance

· Contact foreign embassies' trade development offices.

· Contact the U.S. Department of Commerce's International Trade Association.

· Track down leads on the Internet and in trade publications.

· The American Association of Exporters and Importers

· The Federation of International Trade Associations

· International Chamber of Commerce

· The International Federation of Customs Brokers Associations

· International Organization for Standardization

· International Small Business Consortium

· World Trade Center’s Association

· Bureau of Industry and Security

· Business Information Service for the Newly Independent States (BISNIS)

· Commercial Service. Canada

· Commercial Service. Mexico

· Country Commercial Guides

· The Export Legal Assistance Network

· Foreign Agricultural Service

· International Trade Administration

· Overseas Private Investment Corporation (OPIC)

· Showcase Europe

· Ex-Im Bank, Small-Business Programs

· U.S. Census Bureau, Foreign Trade Division

· U.S. Customs and Border Protection

· U.S. Department of Commerce

· U.S. Commercial Service (The Commercial Service)

· Magazines and Publications

· The Journal of Commerce

· Trade show Week