The International Dream

This article is based on the contributions of Georgetown University’s McDonough Business School graduating class of 2019.

As the largest importer in the world, the United States obtains about 13% of global goods and services from other countries – diverse as China, Canada and Mexico. The United States tends to buy more than it sells. Americans have access to worldwide products and none has to go overseas to get it. But does this mean they have access to everything? And if not, what new inventions and innovations is the United States missing out on?

While everyone talks about exports, we focus on the so often maligned imports.  Exports make imports possible, which enhances selection, competition, and competitiveness. With already a shining city on the hill, how can things get even better?

Our team of hands-on experts, exposed to products from around the globe. They are a group of seniors the McDonough School of Business at Georgetown University. We asked them to give us a closer look into what the US should import more of. Students explore new motivations for US imports to include goods and services from a wide array of industries ranging from fine foods to health and technology.

Technology has effectively become the center of our lives. Students believe that the US should dedicate its import efforts on innovative products that will enhance tech performance and connectivity. The United States currently can only support 4G services to telephones. Korea, on the other hand, has been using 5G recently, which has provided them the opportunity to grow faster and be more flexible than the U.S. There now is a lucrative market for portable chargers. As they are cheaper to import than to produce, the US is more likely better off importing battery pack rentals from China.

The need for tech innovation is not limited to mobile phones, but includes automobiles and health. With rising auto tariffs, the United States will have decreasing access to advanced automotive engineering technologies. Specifically, foreign markets sell sleek pickup trucks, which are not available in the United States and penetrate Asia and Sub-Saharan Africa. Access to such advanced forms of auto engineering will benefit US consumers.

Innovation will also support health sector advances. There was demand for robotic goods. Japan was credited with very advanced medical robotics. The Kibo Experiment Module allowed fixing problems on the International Space Station without having to send a human into space. Similarly, robots are used in Japan right now in order to have a more precise and efficient way of significantly treating cancer patients. There are also bionic arms for upper-limb amputees, customizable for each wearer. Children can update their arms as their bodies grow. Such technologies should be brought to the US, where many individuals have received damage to their limbs.

There also is demand for simple technologies and ideas that effectively improve the wellness and wellbeing of individuals. Asian facemasks mitigate pollution-related health risks. The Water-Leech – a tank that absorbs and retains water runoff from a shower, bath or sink – was found to be a product worth importing from Australia. This tank allows consumers to save water instead of wasting it down the drain.

Other ideas included public spaces where communities can be given the chance to exercise and socialize in order to become more active and engage with others. Colombia’s Ciclovias, where some of the main roads in Bogota are closed off for cars and open to pedestrians who want to bike, walk or simply chill, inspired such leisure spaces well worth importing.

Discussed was leisure time at work: 2 – 3 hours for a mid-day nap, otherwise known as siestas. The Spanish’s rendition of the traditional American lunch break could potentially attract more millennials into the workplace, and add massive value for employees, particularly those who work in innovative, creative industries.

Cultural innovation was not limited to the workplace. In this increasingly globalized world, it was important to understand different cultures. How do different backgrounds and upbringings result in contrasting approaches to the same situation? Students observed a need for educational exchange programs that remove students from their comfort zones in order to truly experience a variety of different cultures. New exchange programs will completely immerse students into the culture. Most relevant is the opportunity to explore underdeveloped and remote areas of the world, which will eventually be part of all’s underbelly.

While the US has access to a range of premium goods and services, imports can be crucial in providing the finer things in life. Students called on the need for luxury, fine foods to task Americans’ taste buds. There was strong appeal of wines from France, Italy and Spain, particularly when paired with refined, imported cheese. Australian marinated goat cheese for $12 per 11oz jar will perhaps be the next luxurious brand of food.

Perceptions of luxury was not limited to goods, but extended also to services. Specifically, in Switzerland, the world-renowned Paracelsus Clinic offers unparalleled medical services that, in a perfect world, would be available in the United States as well. Paracelsus Recovery, founded in 2012, offers a unique “luxury treatment program” for clients struggling with addiction, including substance abuse and mental disorders. Patients live in a luxury residence with a team of international doctors that specialize in their condition. Attention of approximately 15 doctors is solely focused on the patient and their needs. Yet, the cost structure is expensive. At present, the recovery group charges $80,000 Swiss Francs a week, or the equivalent of USD $81,300.80.

Imports are good, but need to be fair. Our students understand and support such restraints, yet know that selection and diverseness is a strong pivot enriching lives.

Professor Czinkota ( teaches international marketing and trade at the University of Kent in Canterbury and Georgetown University. His latest book is “In Search For The Soul of International Business”, ( 2019.

Dina El-Saharty ( is a second-year Communication, Culture, and Technology (CCT) graduate student at Georgetown University, specializing in visual communication design and persuasive communication. 

Let Us Organize World Trade

There is broad historic agreement that the World Trade Organization (WTO) has been one the most successful international institutions; its membership accounts for more than 98 percent of world trade. However, today’s global economic landscape is changing rapidly, coupled with retrenchment and distancing from multilateral agreements. Combined, these factors impact the discernible value and role of the WTO going forward.

Changed Patterns of Trade and Investment

The expansion and development of IT infrastructure, telecommunications, and computing made the global revolution of the last few decades possible. New technologies, nonexistent when the WTO was established in 1995, have become crucial for growth and development in this decade. The outsourcing revolution has affected the developing world in a major way: global manufacturing and new services have dramatically changed supply chains; corporate espionage and intellectual property infringements supported many corporate changes in developing countries; and WTO negotiations and augmented enforcement procedures have not been able to slow that trend.

Moreover, one of the most critical issues in global trade is the aspect of unprecedented imbalances. Today, China is the new top global merchandise exporter with a total of $2.263 trillion, or 16.25 percent of world exports, according to WTO reports. It is the largest global exporter of goods, 17 percent of world exports, and the third largest importer, 12 percent of global imports.

The United States is the main goods importer with 13.4 percent of the global imports, totaling $2.4 trillion. In 1994, the United States was running an annual merchandise trade deficit of about $120 billion; by 2017, the U.S. annual trade deficit with China alone has ballooned to over $375 billion.

Stalemate at the WTO: Too Big to Be Effective?

The last successful WTO negotiation — the Uruguay Round — was a result of a strengthened, single market in Europe, the creation of NAFTA, and several plurilateral agreements, such as the Information Technology Agreement (ITA).

The Doha Round of negotiations, beginning in November 2001, aimed to achieve major reforms in the international trading system, with an explicit focus on developing nations. Nevertheless, this premise failed; disagreements concerning the agricultural sector, free trade of services, and intellectual property rights have stalled negotiations.

Twenty years ago, the principal WTO concerns were pollution, global warming, disease, and structural unemployment — none of these agenda items, arguably, have been addressed effectively, much less solved.

Size is also an issue. The WTO is comprised of 164 members, with widely diverse perspectives, levels of development, linkages, and ambitions. The WTO system has become unwieldy because of the unanimity requirement of its voting process. The result: progress with new agreements is at a standstill. Case in point is the reduction of trade tariffs, which, at a global 3 percent of Most Favored Nations status, is at the same level as in 2000.

China: A “Rule Shaker” or a “Rule Maker”?

The West’s open invitation for China to join the WTO in 2001 paved the way for its rise to a global economic power. Since then, the balance of power at the WTO has changed dramatically. Chinese outward investment in the global economy has increased thirtyfold, from $7 billion (making up only one percent of the global FDI) to almost $200 billion (13 percent of the global FDI).

China entered the WTO as a “rule taker,” evolved into a “rule shaker,” and now aims to become a “rule maker.”

In fact, economic relations between China, the United States, and the EU define many of the agreements and disputes at the WTO. Xi Jinping’s “China Dream” of national rejuvenation could be seen as a way to reshape the international economic system, putting China at the center.

China has not been an easy partner for the West. Initial optimism that China would turn toward a free market economy has yet to come to fruition. Moreover, with its “capitalism with Chinese characteristics,” the country has taken the main benefits of the open trade system by creating major distortions and causing disputes that the WTO lacked the capacity to handle. Controversial issues include intellectual property rights (IPR), free market revisions through government subsidies and state-owned enterprises (SOEs), unequal conditions for market access with major restrictions to market entry in China, and unfair technology transfer. Foreign firms operating in China struggle against restrictive regulations — the government often requires them to hand over their intellectual property as a condition of market access. Asymmetrical market access and lack of reciprocity are magnified further at political levels.

With the existing WTO rule book, it is difficult to hold China accountable. Implications of Chinese “market distortion” and “unfair competitive conditions” consume global trade relations rhetoric; these opinions, voiced loudly by the current U.S. administration, are also shared broadly by other players, such as the EU and Japan. Due to high trade deficits, the United States is pushing for WTO reforms, increasing tariffs, and blocking the nominations of seats on the WTO’s appellate body (where the U.S. is a major player in the dispute resolution process) as leverage. Desired reforms aim to regulate market distortions caused by government interventions, simplifying the process of gathering information on unfair trade and investment practices, broadening the scope of banned subsidies, and setting boundaries to proportionate retaliations. But, at the end of the day, why would China agree on reforms that jeopardize its state-run economic model?

The WTO as a Reflection of a “New World”

The WTO does not operate in isolation from changes and new developments impacting trade. In the last two decades, the world’s macroeconomic environment was shaken by at least two significant events: the spread of terrorism, and the financial crisis of 2008. Terrorism has enhanced the inward focus of the political and economic aspects of national security; the global recession has caused an inward retraction of production and services. International economic issues were largely ignored as attention shifted to domestic job creation, the security and protection of domestic credit markets, and enhancing liquidity. Further, financial and political conflicts seem to foster greater polarization among legislators in many countries around the world.

As a result of continued stalemates and disagreements at the WTO, external actors are adopting a new “do-it-yourself” approach defined by preferential plurilateral trade negotiations — handmade for and benefitting only a limited number of players.

In addition, there is the issue of China’s growth in influence. In September 2018, the United States together with  the EU and Japan signed a brief statement voicing shared concerns regarding the future of the WTO, questioning its validity as a primary platform for multilateral trade. As an immediate result of difficult trade relations between the United States and China, and tremendous  pressure applied by the current U.S. administration, China afforded European companies access to some sectors, while pledging to cooperate with the EU on WTO reforms — a decision taken in July 2018 during the EU-China Summit.

Since the appearance of President Xi Jinping at the World Economic Forum two years ago, Beijing has been signaling that it is willing and prepared to assume the role of a new custodian of globalization. However, it seems obvious that China would not accept any reforms at the WTO, or any level, that would jeopardize its own economic model and welfare. At the same time, China wants to preserve the existing global trade order, as the outside world is more crucial than ever for its economic development.

Today’s global economic realities are not only introducing a new set of concerns and means of doing business, they are also challenging the very effectiveness of the WTO’s historical role as an arbiter of world trade.

Valbona Zeneli is the Chair of the Strategic Initiatives Department at the George C. Marshall European Center for Security Studies. The views presented are those of the author(s) and do not necessarily represent views and opinions of the Department of Defense or the George C. Marshall European Center for Security Studies. 

Michael R. Czinkota is a professor at the University of Kent in Canterbury and at the McDonough School of Business at Georgetown University, He is a former Deputy Assistant Secretary of Commerce in the United States Department of Commerce. 

The Ignorant Wise Man

American companies were assured that because of its size and the diversity of its resources, the American economy could satisfy consumer wants and national needs with a minimal reliance on foreign trade. The availability of a large U.S. domestic consumption power and the relative distance to foreign markets resulted in many U.S. manufacturers simply not feeling a compelling need to seek business beyond national borders. Subsequently, the perception emerged within the private sector that exporting and international marketing were simply too risky, complicated, and not worth it. 
This perception also resulted in increasing gaps in international marketing knowledge between managers in the U.S. and those abroad. This gap shaped different incentives to innovation. The Late-developing Advantage Theory can illustrate those differences, not only at a national, but also at a firm specific level. A less favorable position can always be an opportunity and motivation. While business executives who deal with small market sizes are willing to learn about cultural sensitivity and market differences, many U.S. managers remain blissfully ignorant of the global economy. Given such lack of global interest, inadequacy of information, ignorance of where and how to market internationally, unfamiliarity with foreign market conditions, and complicated trade regulations, the U.S. private sector became uninterested and fearful of conducting international business activities. 
However, conditions have changed. Traditional education institutions are becoming more attuned to the international dimension. Universities and particularly business programs are emphasizing responsibilities and obligations at the international level both in theory and in practice. Meanwhile, some government agencies are paying closer attention to the international needs of the U.S. business community. The U.S. Department of State offers training and instruction in business-government relations to domestic firms.
Newly emerging economies also accelerate the process of rising public attention. For instance, electronic commerce has made it more feasible to reach out to the global business community, whether a firm is large or small. International events can lend a new focus to business. In 2018, Alibaba generated US$30.69 billion in sales on Double Eleven or November 11th, which is known as a day of special promotions, and now includes a large share of international sales. Related industries and supply chains, such as transportation and logistics, are prospering with the growing volume of international trade as well.
In effect, U.S. corporate interests given to international markets both as an opportunity find both customers and suppliers to be growing. How can the U.S. maintain a sustainable competitive position? How can the managers further learn from what used to be former students? The need and demand for international marketing expertise can be expected to rise substantially. Overall, avoiding ignorance is the first step to becoming wiser.
Professor Czinkota ( teaches international marketing and trade at the University of Kent in Canterbury and Georgetown University. His latest book is “In Search For The Soul of International Business”, ( 2019 Shiying Wang ( of McCourt School of Public Policy, Georgetown University contributed to this commentary.

“For Latin America and the Caribbean, an Age of Anxiety” by Jerry Haar

Published in the Miami Herald (January 18th, 2019), “For Latin America and the Carribean, an Age of Anxiety” discusses the economic outlook for the Americas.

For Latin American and the Caribbean, an Age of Anxiety
by Jerry Haar
January 18th, 2019

In 1947, the famous British poet W.H. Auden penned “The Age of Anxiety”. This moniker is an apt description of the economic (not to mention psychosocial) environment in which we find ourselves today. The stock market tanks 600 points in one day then recovers by the same amount the next. Populist politicians make bizarre and absurd pronouncements that freak out the investment community, and consumers try to grapple with a merry go round of mixed signals and conflicting economic statistics.

The global economic outlook, in general, is not rosy, to say the least. Anemic growth in the U.S., Europe and Japan will be exacerbated by worsening trade terms, declining capital flows, illiberal protectionist policies and an appreciating dollar. The economic environment for Latin America and the Caribbean region in 2019 will be characterized by increasing uncertainty, medium-term risks, and a recovery characterized by ebbs and flows. Excluding Venezuela, GDP is projected at 2.3% vs. 3.7% for the world.

Four trends or factors will impact both the local and multinational business communities in the region in the new year:

  1. Interest rates and economic performance in industrialized nations. Taking a queue from the U.S. Federal Reserve, the European Central Bank, and other central banks, are expected to raise rates, although the percentage hikes and timing are uncertain. Such moves will increase business and consumer borrowing rates in an environment where trade and investment flows to the region from the U.S., Canada and Europe, in particular, have been slowing for the last few years.
  2. Falling demand from Asia for the region’s commodities. Despite healthy projected growth rates of China (6.2%) and India (7.3%), there will be declines in commodity purchases such as soybeans, corn, sugar, iron ore, and mineral fuels, as a result in slowing growth in the Asian region. Brazil, Argentina, Chile, Peru, Ecuador and Colombia will be impacted by this contraction.
  3. Domestic demand from lower/middle classes. The proliferation of credit, relatively low inflation rates, and major gains in poverty reduction in the region have catalyzed consumer purchasing at all income levels, especially the lower and lower-middle classes. Credit cards, e-commerce, and online lending by non-bank institutions have significantly fueled domestic demand for goods and services.
  4. Technology proliferation. Businesses of all sizes, national and multinational, will continue to harness technology—by necessity as much as choice—to improve efficiency and productivity, gather market information, enhance customer service, and expand their business. Artificial intelligence, blockchain, and a myriad of customized software are key features of this continuing technology wave where not only large providers such as Microsoft, Hewlett-Packard, and SAP service a wide range of industries, but small and medium-size firms and start-ups proliferate, as well.

Given this environment, the challenges that businesses will face in 2019 are numerous. These include greater competition from China, possible recessions in Europe and the U.S., and issues of intellectual property protection and data privacy, witness the recent Facebook debacle. For smaller firms and consumers, wider access to financing (especially for suppliers) is still daunting despite market improvements in financial access in recent years. Firms that are commodity producers will find the global business environment especially challenging. Finally, for firms of all sizes workforce availability and readiness are significant daunting hindrances. Latin America underperforms vis-à-vis nations with similar levels of GDP and education spending. The region spends more per capita than Asia but with poor results. Talent attraction and retention are no easy feats to say the least.

Despite the challenges elucidates above, microeconomics will trump macroeconomics in the new year. As previously mentioned, the growing demand in internal markets by both business and consumers, across a range of socioeconomic classes, means that a slow-down is not anywhere near a shutdown. Goods and services with that are heavily technology-based have a bright future, as technology is harnessed to boost productivity and accountability to both shareholders and customers. And with few exceptions (Venezuela, in particular) pro-market environments characterized by neoliberal economic policies will ensure a favorable playing field.

The current global environment may be described as one of volatile stability or stable volatility (witness the roller coaster performance of equity markets in recent weeks). This new age of anxiety we have entered will be with us through 2019. Astute investors, well-managed and agile firms, and savvy consumers should be able to successfully negotiate through the challenging times before us.

Jerry Haar is a professor in the College of Business at Florida International University as well as a Global Fellow of the Woodrow Wilson Center in Washington, D.C.

Wake Up the Smartest

In this newest video, Professor.Czinkota speaks about how the book was written in short chapters with witty illustrations enabling the reader to digest a little information at a time and wake up the smartest person in the room.