I totally support both The American Jobs and Closing Tax Loopholes Act of 2010. Even though I am not American, I realize that this program might significantly help create jobs in America, help small businesses and this way better the economy of the country. At the same time I support the debate of the House of Representatives, which stated that it is not wise to make U.S. multinational companies pay double taxes. “More than half of all manufacturing employees work for the U.S. multinationals”. “You cannot expect to increase jobs in this country when you are increasing taxes”. I need the third party opinion to draw the conclusion.
Check out the links: http://thehill.com/blogs/on-the-money/international-taxes/111737-house-approves-tax-increases-on-us-multinationals and http://www.speaker.gov/newsroom/legislation?id=0374
Monday, August 9, 2010
NEGATIVE EFFECTS OF NAFTA
NAFTA has produced negative effects in all three countries (U.S., Canada, Mexico), including contributing to wage inequality in the United States (led to middle class shrinkage).
NAFTA did not do enough to protect the environment or to improve working conditions in Mexico. The government had not done enough to improve economic and political conditions in Mexico. This trade agreement has produced disappointingly small net gains in employment in the countries of North America.
The negative situation currently faced by Mexico also demonstrates that developing country must use transition time aggressively to prepare the rural population for the wrenching adjustment it will face. Policies should be adopted to shift farmers to competitive crops, to develop alternative sources of employment in rural areas, and to invest heavily in education to prepare the population for the modern occupation.
US policy on agricultural subsidies changed significantly in ways that were not foreseen during the NAFTA negotiations, most notably in the passage of the farm bill in 2002 that increased subsidies. Successful competition will be imposable for the developing country under those circumstances.
Net impact of NAFTA on US employment is small, the impact on overall wages is also likely to be small. Compared to the period before NAFTA, the top 10 percent of household have increased their share of national income, while the other 90 percent have lost their income share or seen no change. Regional inequality within Mexico has also increased.
In a trend that predates NAFTA, income inequality in the US has been increasing for most of the last two decades. The growing wage gap between high-skilled and low-skilled workers is one of the causes.
In Mexico, rural farmers are still struggling to adapt to NAFTA-induced changes. Trade adjustment assistance should provide income support to workers and small farmers during transitional periods, as well as funds for training for new occupation. Developing countries negotiating with wealthier trading partners will likely need financial assistance from those countries, as part of the trade package, for transitional adjustment programs.
NAFTA did not do enough to protect the environment or to improve working conditions in Mexico. The government had not done enough to improve economic and political conditions in Mexico. This trade agreement has produced disappointingly small net gains in employment in the countries of North America.
The negative situation currently faced by Mexico also demonstrates that developing country must use transition time aggressively to prepare the rural population for the wrenching adjustment it will face. Policies should be adopted to shift farmers to competitive crops, to develop alternative sources of employment in rural areas, and to invest heavily in education to prepare the population for the modern occupation.
US policy on agricultural subsidies changed significantly in ways that were not foreseen during the NAFTA negotiations, most notably in the passage of the farm bill in 2002 that increased subsidies. Successful competition will be imposable for the developing country under those circumstances.
Net impact of NAFTA on US employment is small, the impact on overall wages is also likely to be small. Compared to the period before NAFTA, the top 10 percent of household have increased their share of national income, while the other 90 percent have lost their income share or seen no change. Regional inequality within Mexico has also increased.
In a trend that predates NAFTA, income inequality in the US has been increasing for most of the last two decades. The growing wage gap between high-skilled and low-skilled workers is one of the causes.
In Mexico, rural farmers are still struggling to adapt to NAFTA-induced changes. Trade adjustment assistance should provide income support to workers and small farmers during transitional periods, as well as funds for training for new occupation. Developing countries negotiating with wealthier trading partners will likely need financial assistance from those countries, as part of the trade package, for transitional adjustment programs.
WTO AND DEVELOPING NATIONS
For more than fifty years WTO was classified as a part of a temporary trade agreement. In 1995, 76 countries have helped the WTO to be born; and President Bush had described it as the “new world order”.
The new organization was considered to encourage the former Communist countries of Europe and the developing countries of Latin America, Asia, and Africa to adopt business-friendly policies. The United States and other developed countries were sending a message: Adopt economic reform, and we will be there to bail you out if your economy gets into trouble. Promoters of these reforms hoped the changes would make developing countries more attractive to foreign investment and would integrate those countries even further into a competitive global economic network. Thus, the developing countries were more than happy to oblige. By August 2000 the number of WTO members had nearly doubled to 139.
George Bush’s Administration didn’t take into consideration that many developing nations were not ready for a business like that, and it has led to a big chaos and crisis in those countries. “It sounded too good to be true, and so it proved”. Here is what has to be implemented: “Negotiating this new environment will require companies to more rigorously evaluate political events and their contexts… and more carefully assess the links between the political, economic, and financial factors of risk".
Check out the article from Harvard Business Review: http://hbr.org/2003/08/the-new-world-disorder/ar/1
The new organization was considered to encourage the former Communist countries of Europe and the developing countries of Latin America, Asia, and Africa to adopt business-friendly policies. The United States and other developed countries were sending a message: Adopt economic reform, and we will be there to bail you out if your economy gets into trouble. Promoters of these reforms hoped the changes would make developing countries more attractive to foreign investment and would integrate those countries even further into a competitive global economic network. Thus, the developing countries were more than happy to oblige. By August 2000 the number of WTO members had nearly doubled to 139.
George Bush’s Administration didn’t take into consideration that many developing nations were not ready for a business like that, and it has led to a big chaos and crisis in those countries. “It sounded too good to be true, and so it proved”. Here is what has to be implemented: “Negotiating this new environment will require companies to more rigorously evaluate political events and their contexts… and more carefully assess the links between the political, economic, and financial factors of risk".
Check out the article from Harvard Business Review: http://hbr.org/2003/08/the-new-world-disorder/ar/1
CHICKEN FEET: A SYMBOL OF U.S. - CHINA TENSION
Comments on the article: http://www.time.com/time/world/article/0,8599,1960825,00.html
United States of America and China have been partners in the "chicken" industry for many years. The business have proved itself to be successful for both countries. However, on February the 5th China’s Ministry of Commerce announced it would begin imposing antidumping tariffs from 43.1% to 105.4% on imports of chicken parts from the US. We highly value political, economical, cultural, and trade relations with people’s Republic of China. We respect the governmental units and the population of this country. This business should benefit both sides: thus, we highly recommend to negotiate the tariffs rates in order to continue our partnership and good relations not only in this industry, but in many others that US and China work within.
United States of America and China have been partners in the "chicken" industry for many years. The business have proved itself to be successful for both countries. However, on February the 5th China’s Ministry of Commerce announced it would begin imposing antidumping tariffs from 43.1% to 105.4% on imports of chicken parts from the US. We highly value political, economical, cultural, and trade relations with people’s Republic of China. We respect the governmental units and the population of this country. This business should benefit both sides: thus, we highly recommend to negotiate the tariffs rates in order to continue our partnership and good relations not only in this industry, but in many others that US and China work within.
WAR ON TERROR - U.S. TRADE BARRIER
After terrorist attack on September 11, 2001 George W. Bush, having been the president of the country took extensive measures to guard and secure the territory of the United States. Seaports, bridges, U.S. harbors and sites such as Empire State Building, were instructed to be under constant guard.
Before the attack the U.S. border security was focused on limiting the inflow of drugs and immigrants into the country. After the attack these measures were adapted to counter terrorism efforts. Random ships, trucks and airplanes were constantly inspected by government officials.
Unfortunately, additional measures led not only to extra costs but also to enormous trade delays with foreign countries. Such tightened security measures added arrival time to every ship, airplane or truck entering the country. People who did not have any link to the terrorist attack had to go through long, tiresome and stressful check. These measures were understandable but had a considerable impact on legitimate travel and trade.
America’s prosperity relies on its ready access to global networks of transport, energy, information, finance, and labor, according to what analysts say. Measures taken by the government can be called “self-defeating”, talking about security measures that isolated the country from these networks. This kind of security has become a trade barrier that the United States created unwillingly. The U.S. response following the terrorist attack in 2001 is compared to the “imposing a trade embargo on itself”. The question is: How much is too much? How could government be so concerned with security of the country that completely forgot about other major industries, like tourism and global trade?
Before the attack the U.S. border security was focused on limiting the inflow of drugs and immigrants into the country. After the attack these measures were adapted to counter terrorism efforts. Random ships, trucks and airplanes were constantly inspected by government officials.
Unfortunately, additional measures led not only to extra costs but also to enormous trade delays with foreign countries. Such tightened security measures added arrival time to every ship, airplane or truck entering the country. People who did not have any link to the terrorist attack had to go through long, tiresome and stressful check. These measures were understandable but had a considerable impact on legitimate travel and trade.
America’s prosperity relies on its ready access to global networks of transport, energy, information, finance, and labor, according to what analysts say. Measures taken by the government can be called “self-defeating”, talking about security measures that isolated the country from these networks. This kind of security has become a trade barrier that the United States created unwillingly. The U.S. response following the terrorist attack in 2001 is compared to the “imposing a trade embargo on itself”. The question is: How much is too much? How could government be so concerned with security of the country that completely forgot about other major industries, like tourism and global trade?
DETROIT’S BIG THREE FACE OBSTACLES IN RESTRUCTURING
What can be said about the current situation of the company? At least one thing is evident, the situation could have been much better. Unfortunately, today the company is obligated to pay off health-care benefit packages and pensions that were negotiated by the United Auto Workers and the Big Three before.
However, everybody makes mistakes. We all have become witnesses of a recent misfortune of the Japanese Automobile Company – Toyota. But I’m pretty sure that all the money they are investing in “forgive us” advertising and traveling around the world campaigns will be paid back later on. Why can’t the Big Three do the same? Yes, they still have extra costs for health-care and pensions, which make them look less competitive abroad. But it can’t be changed. So, they should try to make some efforts and try to remind people about their past success and present quality. They should also invest into some vehicle features. Just make people believe!
There is a saying: “Those who don’t risk don’t drink champagne!” Hopefully, they will learn from their silly mistake.
However, everybody makes mistakes. We all have become witnesses of a recent misfortune of the Japanese Automobile Company – Toyota. But I’m pretty sure that all the money they are investing in “forgive us” advertising and traveling around the world campaigns will be paid back later on. Why can’t the Big Three do the same? Yes, they still have extra costs for health-care and pensions, which make them look less competitive abroad. But it can’t be changed. So, they should try to make some efforts and try to remind people about their past success and present quality. They should also invest into some vehicle features. Just make people believe!
There is a saying: “Those who don’t risk don’t drink champagne!” Hopefully, they will learn from their silly mistake.
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