Providence Working Waterfront Alliance

Since 2007, the Providence Working Alliance ( PWWA ) has worked diligently to educate Providence city officials and the public about the critical role of water dependent and industrial business located along allens Avenue's historic working waterfront. Collectively, these business generate hundreds of millions of dollars in GDP for Rhode Island's economy, it supplies critical energy resources to the region, it provide hundreds of good paying job to the local community, and it also provides thousands of related jobs. Providence Waterfront is considered one of the top 50 ports in the United states and plays a key role in bringing hundred and millions of dollars to this economy of New England reason. Over 9 million tons of cargo are moved through this port every year.
The Providence Planning Department's Waterfront plan continues to portraya construed vision of mixed-use residential and hotel business next to marina and industrial business but this goes against the agreement reached during the June 2008 Waterfront Charrette. The agreement reached by experts, business in the area, and the public was that residential living and hotel use use would not work together in harmony with existing heavy industrial businesses.
PWWA members remain opposed to mixed-use zoning to which would allow for the construction of residential building or hotels in which would be located next to existing heavy marinas and industrial operations. Local business are concerned that future resident owners and hotel guests will complain them out of business. The current strategy outlined in the Waterfront plan does not guaranty that future resident owners and hotel guests will force business out of the area.

At last, The Providence Working Waterfront Alliance is trying to protect Allen avenue water dependents and industrial business that already exist in the area. PWWA has been trying to convince the city of Providence officials and increase awareness so that the city and citizens will see the importance of Allens Avenue waterfront is to them. Protecting Providence working Waterfront means saving good blue collar job which is has a great economy impact. PWWA is allowing mixed use zoning with the support of city officials, having residential and hotels next to heavy marina and industrial businesses, which would crush existing businesses in the area and cause more job in a difficult economical time.

India’s International Migration of Labor, Currency Valuation, Foreign Direct Investment and the Role of Multinational Enterprises

   

International migration labor 

Increasing internationalization of production, trade and finance, globalization of economic networks, liberalization of the movement of capital and technology, rapid population growth in the South, high economic growth and low fertility in the newly industrializing countries are all factors that may exert additional pressure both in the migrant-sending and migrant-receiving countries for larger international flow of skilled and unskilled labor in the immediate decades to follow.

In India, the migration of its labor force within and across its national boundaries is nothing new. Two distinct types of labor migration have been taking place from India.  The first is characterized by a movement of persons with technical skills and professional expertise to the industrialized countries like the United States, Britain and Canada, which began to proliferate in the early 1950s. The second type of migration pertains to the flow of labor to the oil exporting countries of the Middle East, which acquired substantial dimensions after the dramatic oil price increases of 1973-74 and 1979. The nature of this recent wave of migration is strikingly different, as an overwhelming proportion of these migrants are in the category of unskilled workers and semi-skilled workers skilled in manual or clerical occupations.

Currency Valuation

 The value of a currency depends on factors that affect the economy such as imports and exports, inflation, employment, interest rates, growth rate, trade deficit, political factors, performance of equity markets, foreign exchange reserves, foreign investment inflows, banking capital, and commodity prices.

The Reserve Bank of India controls the issuance of the currency. The currency value of an economy influences the growth rate of GDP in an economy. The valuation of the Indian currency highly depends on reserve bank of India that manages the balance of payment, small modification in which can define the over or the under valuation of Indian currency.

 

  In last few months what we have seen is a weakening Indian Rupee. So it means something is not going right in Indian economy and if economy is not doing well it directly impact our investments. India is a country, which is heavily dependent on Oil Imports, and any change in oil prices directly effects the inflation in the country.The currency value of an economy influences the growth rate of GDP in an economy. Depreciating Rupee levels will increase the cost of Oil for India. Oil is imported by India in US Dollars, so a depreciating Indian Rupee will increase the cash paid for every barrel of oil Imported by India. Weakening currency is directly linked with weakening Indian economic strength and appreciating Rupee means Indian economy is becoming stronger fluctuation of Indian Rupee (currency) affects the decisions of investors while making investments.

 Conclusively, there are many factors that arise from the economic structure of Indian economy and affect the valuation of the Indian currency that in turn affects the economic growth rate of the economy of a country.

Foreign Direct investment ( FDI )
Foreign Direct Investment (FDI) in India is governed by the FDI Policy announced by the Government of India and the provisions of the Foreign Exchange Management At (FEMA), 1999.
 

Foreign Investment is freely permitted in almost all sectors except those sectors specifically restricted/prohibited. Under Foreign Direct Investment scheme investments can be made by non-residents in the shares/convertible debentures of an Indian company, under two routes; Automatic Route and Government Route. Under the Automatic Route, the foreign investor or the Indian company does  not require any approval from the from the Reserve Bank or Government of India for the investment Under the Government Route, prior approval of Government of India, Ministry of Finance, Foreign Investment Promotion Board (FIPB) is required. Benefit of FDI in India: generation employment and productivity enhancement, encourages the transfer of management skill, intellectual property and technology, increase in tax revenue and increase in exports.

  
Multinational enterprises (MNE)

Multinational enterprises play a vital role in the economic activity of most developing countries. In India MNE affiliates dominate whole sectors of industry - such as plastics and pharmaceuticals - characterized by a high degree of product differentiation, complex technology and high skill intensity. Such advantages, combined with intangible assets, centralized decision making and global outlook lead to a divergence of approach between MNEs and their local counterparts in host developing countries.

European Union- Bulgaria Free Trade Agreement

 
 

European Union (EU):

The process of European integration was launched as early as May 1950, by the proposal of France to establish “the first concrete foundation of a European federation”. On April 8, 1965, the Treaty establishing a single Council of Ministers and a single Commission of the European Communities was signed in Brussels between the 6 original member countries of the three Communities: the European Coal and Steel Community, the European Economic Community, and the European Atomic Energy Community. After four waves of accessions after that (1973: Denmark, Ireland and the United Kingdom; 1981: Greece; 1986: Spain and Portugal; 1995: Austria, Finland and Sweden), the EU now has 15 Member States. It is also preparing for the accession of 13 eastern and southern European countries.

  

 

  

European Association Agreement between the EU and Bulgaria:

  The relations of Bulgaria and the European Union, European Community, now being built through the European Agreement establishing an association between the Republic of Bulgaria.

European Association Agreement with Bulgaria provides for the parties’ cooperation on a wide range of issues, mainly in the field of economy, the central component of the association is to achieve free movement of goods, persons, services and capital. There is no doubt that the priority in cooperation between Bulgaria and the European Union in the long term given to build closer economic relations until the entry of Bulgaria into the EU, as explicitly stated in the preamble of the European Association Agreement.

 European Free Trade Association (EFTA)- Bulgaria Free Trade Agreement:

The EFTA-Bulgaria free trade agreement was signed in Geneva, Switzerland on 29 March 1993. It entered into force on 1 Jul 1993.

Bulgaria underwent a political change in 1991 as the pro-Western Union of Democratic Forces defeated Bulgarian Socialist Party in the election. Since then, Bulgaria began the difficult transformation from a command economy to a market-oriented society. Soviet Union has greatly reduced economic cooperation with Bulgaria. The Bulgarian economy was therefore seriously damaged. The country then started to extend economic relations with other countries, especially European countries

 Bulgaria is an important trading partner for the EFTA states in Eastern Europe and an important market for its exports, with significant growth potential. Substantial benefits can be obtained by enhancing economic cooperation with Bulgaria.

Main objectives of the agreement:

(a) To develop economic relations between two parties via the expansion of reciprocal trade

(b) To provide fair conditions of competition for trade between the contracting parties

(c) To contribute to the development and enlargement of world trade through removing trade barriers

 The agreement consists of a total of 39 Articles, 14 Annexes, 6 Protocols, and 1 Declaration. The agreement contains the establishment of a free trade area between EFTA states and Bulgaria during a transitional period ending on 31 December 2002.

The agreement covers industrial products as well as fish and marine products. Trade in agricultural products is covered in three bilateral agricultural agreements negotiated between the respective EFTA states and Bulgaria.

According to the agreement, all customs duties charged on trade between EFTA states and Bulgaria in industrial goods and fish and other marine products should be progressively eliminated. Custom duties actually have been fully abolished as of 1 January 2002. Quantitative restrictions charged on trade between the two parties should also be eliminated on the date of entry into force of the agreement.

Besides the removal of trade barriers, the agreement includes provisions regarding trade-related disciplines such as rules of competition, protection of intellectual property, public procurement, state monopolies, state aid, and payments and transfers.

Bulgaria plays an important role on the EFTA’s trade in Eastern Europe. In particular, Bulgaria is the major export market for EFTA countries. Trade agreements are one way to encourage trade and international relations between countries. Free trade agreement promotes the innovation, competition and generates economic growth.

 

Trade policies for developing nations: Import Substitution Policies (consider BRIC'S)

Trade policy is very important for developing nation to be involved in trade because trade helps to open up economy, trade and investment with the rest of the world for sustainable economic growth. No county in a decade has gained economic success without being open to the rest of the world. Opening up the economies to the global trade has enabled many developing countries to develop competitive advantage in manufacturing certain product.

Import substitution Policies was most successful in countries with large populations and income levels which allowed for the consumption of locally produced products. Latin American countries such as Brazil, Mexico, Chile, Uruguay and Venezuela, had the most success with import substitution policies. This is so because while the investment to produce cheap consumer products may have paid as automobiles and heavy machinery, which depended on larger consumer markets to survive. 

  In the past few years,  BRIC: Brazil, Russia, India and China  has been given to the growth prospects pay close attention to different reasons. With each of these nations having different strategies for growth, they also have different backgrounds, areas of advantage and growth , and challenges for each of their countries as their economies have gathered momentum in the global economy. 

Brazil during the 1960’s and 1970’s. Brazil successfully implemented import substitution policies, which increased economic growth and allowed its industries to develop and diversify. This strategy also helped the country to reduce its reliance on coffee as the country’s main export, so it succeeded on moving from an agricultural economy to a manufacturing one. In 1990 Brazil opened its doors to international trade to allow for further economic growth and this decision has made it a global economic competitor. 
Russia holds a wealth of natural resources: the country holds 13 percent of the world's oil reserves and 33 percent of the natural gas reserves. After communism fell in 1989, Russia wanted to encourage capitalism quickly, and privatized state-owned industries all at once. Most prices were released from government control one night in 1992. Inflation followed shortly after, so monetary policy was raising interest rates in the face of inflation, it made it more expensive for households to borrow money. The financial institutions were not stable enough to handle the sudden privatization, and few had enough capital to provide consumers with the amounts they wanted. This considerably delayed the ability of ordinary citizens to participate in the market economy.

India during the 1960’s and 1970’s, they applied import substitution policies that included tight controls on imports and exports. This strategy allowed the country to be self-sufficient. In 1980 India began a liberalization strategy where tariffs and import and export controls were relaxed. This reduced the costs to import, which reduced the costs of some consumer goods. The result of the 1980’s strategies saw growth for the GDP, export growth and productivity increases. India has been growing in terms of real GDP, and productivity is also quite strong. However, there is still much poverty in the country along with a gender gap and caste system.   

China began it reforms in 1979 and gradually transitioned from a centrally planned economy to open markets. Their rising household incomes have increased consumer demand for goods and services, causing expanding retail sales.

Brazil, Russia, India and China have tried to open their economies to global trade and investment,with varying degrees of success. These four countries have varied economic histories and strategies for stimulating economic growth.  Today, much attention has been placed on the growth potential of the BRICs, but there is no consensus about whether these countries will be significant economies in the coming decades. These countries have quite different economic histories, but all have seen high growth rates and have the potential to continue. However, the BRICs are growing from a lower level of economic activity, since they are all developing countries, and can sustain higher growth rates more so than developed countries. In my opinion import substitution policies are helping the domestic industries because it will let the domestic products has compete skills. It doesn't effect the cost product.

Trade War - Chicken Feet and Tires

The two articles,"U.S. Adds Tariffs on Chinese Tires" and "Chicken Feet: A Symbol Of U.S.- China Tension," which indicates the trade war between the two nations. In this article, President Obama announced a 35% tariff on automobile and light-truck tires imported from China in September, 2009 to preserve jobs in the Unites States. China had major market share in the U.S. tire industry, a $1.7 billion dollar market. American imports of Chines tires tripled by 215% between 2004 and 2008, and China's share of the American market grew to 16.7% from 4.7%. Four American tires factories closed and about 4,500 tire production jobs were lost. Therefore, as a protectionist measure, the U.S. government imposed a 35% tariff rate on Chinese tire imports.




Chinese government announced imposing tariffs ranging from 43% to 105% on imports of chicken parts from the U.S. The United states is the major exporter of chicken feet to China. In 2008 the U.S. exported $677 million worth of chicken to China. It is very important for a government to be very careful while taking consideration in imposing those tariffs on specific product. Imposing a tariff while importing a product may have a vice versa effect while exporting them.

 

This trade war between both the U.S. and China will directly impact the consumers and the business in both countries. Tariff rates will create inefficiency in the economy for both countries. U.S. and China are great trading partners. In my opinion, both countries should have to renegotiate the trade policy and find the better solution to solve the problem. Avoiding the trade war is the best way to keep good relation between two countries and no one will suffer or lose from the trade war.

Are all trade barriers on intentional?

In our trade global economy almost anything can be to the cause for trade barriers. The most common barriers to trades are tariffs, quotas, and non-tariffs barriers.Trade barriers are government restrictions on international trade and it can be created unintentionally. Unintentional trade barriers could be terrorism, piracy, natural disasters, law and regulations and political issues.

On September 11th 2001, the twin towers of the New York's World Trade Center collapsed during a terrorist attack. It created new kind of trade barrier which is U.S. border security that makes it hard to trade between U.S. and the other countries.

 This attack on the U.S. had a very negative impact on the country's economy, imported goods and a lot of which we are still dealing today. After 9/11, industries like tourism and travel and immigration were areas that have been negatively affected by this. The increase in security at the ports, delay in the delivery of goods and parts to U.S. manufactures created an unintentional trade barrier.

Another unintentional barrier was created by the nature, like Japanese Earthquake and Tsunami of 2011. During that time, economy of Japan, world trade and financial market had negative impact from the Japanese Earthquake.

 The U.S. Food and Drug Administration had banned import of vegetable, fruit and milk products. The European Union, Australia, Hong Kong, Philippines, Singapore, India and Canada had required increased surveillance of food products from Japan. Big factories like Honda, Nissan and Toyota were shut down and were unable to supply the product to the world wide. US $235-310 billion worth of damage to the world's  third-largest economy.


 Unintentional trade barriers affect  a nation's openness to trade. They decrease productivity, complicate trade and slow down the movement of good and service between countries . So, no country wants to face unintentional trade barriers.

"Detroit's Big Three Face Obstacles in Restructuring"

During 1900s American automakers had a large market share, due to increase competition from foreign automakers it started sliding down. The Detroit's big three: General Motors, Ford and Chrysler are all suffering because of foreign competitive pressure. There are Various factors like health care, pension and different benefit programs that American auto makers provide to their employees in regards to their foreign competitors.


The Detroit's big three are burdened with the obligations to provide health care benefits for employees.In addition, foreign auto companies are not burdened with the same cost, because nearly all competitive countries have national health care systems. Foreign competitors are more focused in better products developments. The American companies are more focus on giving benefit on employee than focusing on making competitive products.

I think U.S. auto companies need to figure out how to reduce the health care cost and should more focus on making better product than foreign competitors to attract more potential consumers. It might improve the comparative advantage and bring a huge benefit for auto companies in the United states in the future. If it is hard for the U.S. automakers then they should import automobiles from Asia instead of manufacturing here. In Asia, labor is cheap and they have national health care system. I  think  U.S. auto should think about comparative advantage or outsource the companies where they can focus into their product and compete with foreign competitors.