Brazil

The economy of Brazil is the world's sixth largest by nominal GDP. Brazil has moderately free markets and an inward-oriented economy. Its economy is the largest in Latin American nations and the second largest in the western hemisphere. Brazil is one of the fastest-growing major economies in the world with an average annual GDP growth rate of over 5 percent. In Brazilian reals, its GDP was estimated at R$3.143 trillion in 2009. The Brzailian economy has been predicted to become one of the five largest economies in the world in the decades to come. Brazil is a member of diverse economic organizations, such as Mercosur, Unasul, G8+5, G 20, WTO, and the Gairns Group. Its trade partners number in the hundreds, with 60 percent of exports mostly of munufactured or semimanufactured goods. Brazil's main trade partners in 2008 were: Mercosul and Latin America(25.9 percent of trade), EU(23.4 percent), Aisa(18.9 percent), the United States(14.0 percent), and other (17.8 percent).


The currency in Brazil is Brazil Real. Its sign is R$ and its ISO code is BRL. In 1994, it was meant to have approximately fixed 1:1 exchange rate with the United States dollar. It suffered a sundden devaluation to a rate of about 2:1 in 1999, reached almost 4:1 in 2002, then partly recovered and has been approximately 2:1 since 2006. The exchange rate as of June 15, 2012 is BRL 2.05 to USD 1.00.


According to the World Economic Forum, Brazil was the top country in upward evolution of competitiveness in 2009, gaining eight positions among other countries, overcoming Russia for the first time, and partially closing the competitiveness gap with India and China among the BRIC economies. Important steps taken since the 1990s toward fiscal sustainability, as well as measures taken to liberalize and open the economy, have significantly boosted the country's competitiveness fundamentals, providing a better environment for private-sector development. The owner of a sophisticated technological sector, Brazil develops projects that range from submarines to aircraft and is in volved in space research: the country possesses a satellite launching center and was the only country in the Southern Hemisphere to integrate the team responsible for the construction of the International Space Station(ISS). It is also a pioneer in many fields, including ethanol production.


The high-speed economic development of Brazil is not only closely related to its abundant natural resources but also related to its openness trading policy. Brazil is the member of : MERCOSUR,  CAN, ALADI, UNASUR, SELA, ECLAC, IDB, FEALAC, ASPA, OEA, United Nations, World Bank, International Monetary Fund, WTO, UNCTAD, OAS, CSN, CPLP, OEI, G8+5, Rio Group, BRIC..... 


From the organization above, Brazil gets a lot of benefits to its economy. It also can describe as "Brazil gets a lot of benefits from its openness trading policy."

US Morocco Free Trade Agreement

The United States and Morocco sign a Free Trade Agreement on June 15, 2004. The agreement entered into force on January 1, 2006. The United States-Morocco FTA is a comprehensive agreement that supports the significant economic and political reforms that are underway in Morocco and provides for improved commercial opportunities for U.S exports to Morocco by reducing and eliminating more than 95 percent of all goods and services. In addition to key U.S export sectors gaining immediate duty-free access to Morocco for increased regulatory transparency and the protection of intellectual property rights.



In addition, for agricutural, banking and insurance industry, Morocco took the protection period policy. It also refers that the materials of  textile exported from morocoo which must be used by U.S or Morocco produced. The issued relating to the definition of direct shipment and Morocco's application of tariff-rate quotas for wheat imports from the United States have arisen since the FTA's implementation. U.S.concerns with respect to these issues were raised at the first meeting of  the bilateral Joint Committee( the FTA's governing body) in March 2008, and at a number of other meetings, as well as in written exchanges before and after the Joint Committee meeting, including with respect to wheat, at the June 2008 meeting of subcommittee on Agricultural Trade.


Since the U.S.-Morocco FTA entered into force, there have been significant increases in bilateral trade- overall trade in goods between the Uniterd States and Morocco increased 148 percent between 2005 and 2008 from $927 million in 2005 to $2.3 billion in 2008. While bilateral trade has declined during 2009 due to golbal economic conditions, but it also has risen to $1.8 billion in 2011. U.S. goods exports in 2011 were $2.8 billion, up to 45 percent from the previous year.  Corresponding U.S. imports from Morocco were $996 million. Morocco is now the 55th largest export market for U.S. goods.

It's no doubt that this agreement spurs both U.S. and Morocco 's trading.

Zoning Issuse discussion

The City of Providence is considering zoning changes. As laid out in Providence 2020 Plan and in draft changes to the city's Comprehensive Plan, the working  waterfront area along the Allens Avenue Corridor - north of Thurbers Avenue and south of the relocated I-195 -- would be rezoned for mixed uses such as residential condominiums, marinas, hotels, retail shops, and restaurants. Artist renderings in these planning document portray an idyllic waterfront filled with glitzy new condos, hotel, and boats moving about the port.

                                                     picture from google map


"This kind of changes have a great impact on the traditional local working waterfront industry. They are incompatible with the normal functioning of a vibrant working waterfront. "---Working Waterfront Alliance


Providence is a gifted coastal city. It's no doubt to use its gifted to improve city construction and income. No matter tourist industry or shipping and waterfront industry is the good choice to enhance the city's economy, but that change the working waterfront zone to the tourist zone will restain the working waterfront industry. At the mean time it will lead the government to pay more, because for this area government have to pay the fees for the rebuild to make it good looking and also pay fees for the working waterfront industry for the land.


Actually,  south main st area is a good choice instead of the this area. There is more nearby downcity and will contribute to consum. Meanwhile, there are a lot of plain land in this area which will reduce the government's cost.

Helping developing nations:Duty Free Tariff Preference Scheme for LDC’s

There are some characteristics of developing nations, relatively low per capital GDP, relatively short life respectancy, lower rates of adults literacy, export tend to focus on primary products, manufactured goods, majority of exports go to advanced nations, most imports originate in advanced nations and trading among developing nations is minor. In order to help developing nations trade,  there are some institutions and policies exsiting. "Duty Free Tariff Preference Scheme for LDC's"(by India) is one of them.


India's duty free scheme for LDC's came into effect on 13 August 2008. Under the scheme, import duties are being removed for 85 percent of all tariff lines. Implementation of scheme is gradual: tariffs are removed over a period of 5 years, with a 20 percent reduction in the level of applied tariff per year. for additional 9 percent of tariff lines, LDC's are granted preferential rates, with margins of preferences ranging from 10 to 100 percents. The remaining 6 percents of tariff lines are excluded from the scheme.①


All LDCs are eligible to participate in the scheme. In order to be a beneficiary, LDCs have to submit a letter of intent and must provide information on signatories of rules of origin certificates.①


India also accords perferential market access to LDC bangladesh, Bhutan and Nepal under the South Asia Free Trade Arrangement. In addition, Lao PDR and Bangladesh receive LDC benefits under the Asia Pacific Trade Agreement.①


It's no doubt that, India succeeded in this policy. It is not only helps the developing nations for export but also helps India himself to get the cheap natural resources for its gem and jewelry industry. In addition, it also gets the crude oil and raw materials for industrial use from  many African countries.


①：The specific information from :http://esango.un.org/ldcportal/web/10447/-/preferential-market-access-india%E2%80%99s-duty-free-tariff-preference-scheme-for-ldcs?groupId=19799&redirect=http%3A%2F%2Fesango.un.org%2Fldcportal%2Ftrade%2Fism%3Bjsessionid%3DF52AAA4AF63A3B17E2660F5C489EDEBA%3Fp_p_id%3D175_INSTANCE_8WhpzgaCD1zM%26p_p_lifecycle%3D0%26p_p_state%3Dnormal%26p_p_mode%3Dview%26p_p_col_id%3Dcolumn-6%26p_p_col_count%3D1

Higher import tarriff could do less help than harm

After reading the essay, we can get an answer about this question. For extremely high tariff, if the import doesn’t decline, tariff also isn’t enough for annual deficit. In fact, there are several causes which will happen except the import decline if we raise the tariff.

When we raise the tariff, first we will find that our tariff income increased and we can use this money to fill our deficit, Medicare and social security. “What a smart idea!” In contrast, some other counties will also raise their tariff for us soon and our export will decline. Meanwhile, some export industries will close; others will reduce their comparative advantage , raise their price and loss a lot of customers in other countries. The government has to use their tariff which we raised to pay for the increasing deficit and to help export industries. For domestic industries, when competitors have to raise their price, they will get more customers first. However, they will find their import resource price increased, so they raise their price. Some of them will think that why don’t raise their price to their foreign competitors level to earn more money. Therefore, all things price will go up and Government costs will go up. In the meantime, domestic industries loss their competitive power in competition of foreign industries. It's just a beginning.

In conclusion, if we raise our tariff to pay Medicare and social security, we will find the amount which also increased a lot. However, our industries and economy will get hurt.

 

“In one word, a non-starter.”

 

Hurricane Sandy: trade barrier unintentionally

Disater happens unintentionally. When it make loss, it also creat trade barrier unawares. As we all know tariff protect national bussiness from the foreign competitors. To some degrees, disaters and other uninterntionally events act the same role.

When Hurricane Sandy came,  lots of foreign bussiness were influenced by transporting goods or dilivering late. When the Fuel Prices have been going up and up, the transportation costs increased. When Somalian Pirates appeared, goods on shiping decreased.

This kind of event shrinks the export but less import even when countries have more comparative advantage. Obviously, this kind of event reduce the countries' comparative advantage.For instance, Somalian Pirates reduce the transportation costs of foreign goods.

Three Big problem

According to the fact about Three Big (GM, Ford and Chrysler) which on pages 78-79, we know that year 2008 and year 2009 are hard year for the U.S auto industry. In this blog, I am going to focus on
some causes and how to aid.

The book told us that the cost of GM to health care per vehicle is about $1500 in 2008. In contrast, Toyota cost around $200 per vehicle. Definitely, it made the labor cost  a lot of differences. That made Three Big has less comparative advantage on their labor cost and on their goods.
According to  Stolper-Samuelson theorem(on page 78), their goods costs more foreign competitors.
So we have to say, the cost of health care take a port of responsibility to the thing which affects comparative advantage.

However, the experience of Ford also told us the U.S business can compete with countries who offer national healthcare. "As for Ford, its market share increased and the firm returned to profitability at the end of  2009."(Globalization Drives Changes for U.S. Automakers) In 2009, Ford put its new product, New Fiesta, into the market. The new Fiesta has a very low mpg and a low price but a high level of safety factor and a good looking. It changed the profile of U.S. vehicles which all cost fuel too much. That means innovation, technology and other comparative advantages also can make U.S. business compete with foreign business which got national policy advantage.

In addition, loan to auto resource business, increasing the tariffs of auto industry, reducing the tax of auto industry, encouraging the auto innovation and developing new auto technology and encouraging create new manufactory in low labor cost countries (encouraging means rewarding ) can also make U.S. auto industry more competitive.