History does not always tell the Future

Historically. increased international trade activities are often linked to the growth of a country. National power in the world was often the result of creating new markets and trade. For example, the Roman Empire achieved immense growth through the linkages of business rather than the marching of legions and warfare. Many economic successes also occurred when previously closed economies embraced international trade like South Korea in 1960s and China in 1980s.

So far, in this century, more than a billion people around the world have been lifted out of poverty by the power of international trade. International competition has greatly stimulated innovation and productivity. 

However, world trade is in flux today. Conflicts have emerged over market instabilities and insecure trade structures which have led to major inequities.  No longer are societies certain that an increase in trade resolves current economic and societal shortcomings. Will a better life result from simply doing more of what was done in the past?  

Globally some policymakers intend to ride inequities to the hilt. They  give preference to the continuity of rules over the adjustment to reality. For them tradition is the overriding decision tool. 

But, what happens when the fundament has changed? When a volcano erupts and sends a stream of glowing lava flowing down the mountain,  the affected villages are no longer fit for shelter. Today, President Trump reflects the need for new actions in a new era. He is positively  willing to disregard the past when its performance distorts the playing field. The consequences have been important. 

In 2017, the U.S. started to renegotiate its trade agreements with Canada,  Mexico, and with South Korea. It questions the World Trade Organization (WTO) and  challenges the whole trade administration system. In addition, a series of import tariffs came into effect. All these steps indicate a better understanding of shortcomings in trade and a quick-footed willingness to precipitate a curative impact. President Reagan already indicated that “all politics are local”. That principle is expanded into a new approach which states “timing matters for change”.

Continuing large trade imbalances and growing foreign investment control are sources of dissatisfaction. Domestic producers fear to be

squeezed  by global rivals. New production technology, such as product printing, makes manufacturing history obsolete. Processes also matter. China has taken full advantage of the trade infrastructure built by the U.S. and the EU only to subsequently challenge the status quo. The United States’ share of world exports has declined precipitously from 25 percent in the 1950s to less than 9 percent in 2017. The U.S. share of world imports now accounts for 13 percent of world imports. When compared to its exports, the United States clearly has an excess import consumption.  

Reshaping a global system is tough work. Since 1945, the United States has been at the center of the global economy. In its competition with the socialist system market orientation has clearly been won by America. Encouraging now other nations to also help guide the world to better lives does not represent an abdication of leadership. The United States’ willingness to let others participate  in the design and implementation of crucial adjustments demonstrates a willingness to permit others to learn, an encouragement of  self determination, and a great spirit of security and comfort with  change 

The debates over international trade might rumble on for years. But we already know that trade policy must become more domestically oriented while domestic policy must become more international in vision. Doing so, must shape the future.

Professor Czinkota (czinkotm@georgetown.edu) teaches international marketing and trade at Georgetown University and the University of Kent in Canterbury. His latest book is ‘In Search for the Soul of International Business’ 2019, Businessexpertpress.com 

Cambridge/Kent/Czinkota Competition for excellence in International Business Case writing

INVITATION TO PARTICIPATE

Cambridge/Kent/Czinkota Competition

for excellence in International Business Case writing

Applying:

Case submitted by faculty and students, can cover the entire spectrum of the International Business sphere, covering, for example, but not limited to, Trade and Investment Policies, the International Business Environment or Strategy and Operations. The deadline for submission of the previously unpublished final case, including instructor’s solution materials, is April 15, 2019.

Length of submission: Less than 3,000 words (the solution material does not count against this limit)

Please submit to Prof. Michael Czinkota M.Czinkota@Kent.ac.uk

Cases will be evaluated and selected by an international Jury whose decisions are final.

Prizes:

Winners receive a Certificate and will be entered in the Kent Business School Book of Honor

Prizes are:

🏆 First Prize: £ 500

Second Prize: £ 250

Third Prize: £ 125

Prizes 4-12: £ 50

Winning cases are also eligible for publication in the forthcoming Cambridge Press book by Prof. Michael Czinkota, Prof. Ilkka Ronkainen and Prof. Suraksha Gupta

If you have any questions, comments, or concerns, please contact M.Czinkota@Kent.ac.uk

Making the World & Ourselves Better

In this video I speak a little bit about my new book.

It’s available now at Amazon. https://www.amazon.com/?fbclid=IwAR0IIHpntZ-p3Q8C9XbkIaW_BaUKv9U7j3cz2MiVgBtMrImI5iarvBfbH3M

A NEW BOOK FOR TEACHING AND RESEARCH AT CHRISTMAS

Contact: Michael Czinkota                                  Direct Phone Number: 202-687-4204

czinkotm@georgetown.edu                                Book Ordering Link:https://bit.ly/2B2LAZS

Why does a Georgetown University professor write about the soul and international business? Because they’re closely interlinked! An analysis of a new world, terrorism, the future of trade, and the search for the soul are what you find in this book.

 “In Search for the Soul of International Business”, by Michael Czinkota hits the shelves just when needed most, given new environments, new approaches, new emotions and new commitments.

 “I consider the soul the center of our aspirations and inspirations. Loss of soul typically connotes death. Maintaining a soul offers a reference point and stability. For one’s progress in thinking I aim to supply both content and context.”

Author Bio: Professor Michael R. Czinkota teaches international marketing and business at the McDonough School of Business of Georgetown University and the University of Kent in Canterbury. He served in the U.S. government as the Deputy Assistant Secretary of Commerce, as head of the U.S. Delegation to the OECD Industry Committee in Paris and as senior trade advisor for Export Controls.

Over the past 30 years he is consistently listed in every international marketing and business ranking as a top 20 author. He is a distinguished fellow of the Academy of Marketing Science and of the Chartered Institute of Marketing. He received the AMA Lifetime Achievement Award in 2007. The Universidad Ricardo Palma of Lima. Peru named its new International Marketing School after Czinkota.

Book Info:Trade and globalization inundate us with constant information, new concepts, and endless data. Individuals are caught in the whirl-wind of a fast-paced world, often without the ability to stop and think, particularly when it comes to issues of the soul.

With a foreword by Ambassador Dr. László Szabó ,a preface by the Rev. Horkan, and the humorous yet pensive illustrations by award-winning cartoonist David Clark, this book jumpstarts the reader’s ability for a comprehensive understanding of pressing international business and trade issues and their linkage to the soul.

Contact Info: FIX Book Website:Authors Website: http://www.michaelczinkota.com, email: czinkotm@georgetown.edu, Phone: 202-687-4204, Social Media: https://www.facebook.com/czinkotm

Sheri E. Dean, Marketing Director, Business Expert Press and Momentum Press 919-612-6706

Get the inside scoop on the story behind this book by contacting Michael Czinkota at czinkotm@georgetown.edu

Buy this book at https://bit.ly/2B2LAZSor at Amazon.com

Package from China: Who pays the freight?

Michael R. Czinkota


Running a small business which ships low weight merchandise, say 10 T-shirts or small hardware from China to the United States, made logistics cost easy. The U.S. provided for a large shipping discount of 40% to 70%.


Such generosity came from U.S. membership in the Universal Postal Union (UPU). Founded in 1874, the UPU is the international postal organization in Switzerland, committed to a smoothly running international postal system.

In 1969, the UPU’s developed country members implemented discounts for poor nations when shipping small parcels. China then was isolated with few outward shipments. In consequence, consumers in Washington, the shipping cost of a face cream was more affordable from China than from Los Angeles. Today, however, China delivers more than one billion small packages a year to the U.S. and the special discount treatment continued.

Then there came change. The Trump administration announced U.S. withdrawal from the UPU as of October 17, 2018. The objective was to arrive at competitive and fair global shipping rates. This move showed the Trump Administration’s willingness to leave quit multilateral agreements judged unfavorable to U.S. interests. Although the UPU withdrawal process takes one year, U.S. deep discounts for Chinese packages ended immediately.
Now China Post has introduced a new Express Mail Service. It raised the price of packages to the U.S. from $ 30 to $34 for the first 0.5kilogram shipped. Who pays, who benefits?
The United States Postal Service (USPS) can use higher payments from China. But transshipments through other nations and competition will lead to reduced shipping volume.

The price advantage of many Chinese e-commerce vendors declines. Higher cost of shipping reduces this advantage even further. Most endangered are eBay type international vendors. Sellers who compete on price alone face higher cost and more competition. To survive it will become new practice to find alternatives for product and service delivery both for processes as well as markets.

Adjusting the rules for new conditions makes sense. Few parameters conditions have remained static for 144 years. The UPU should get ready for a significant restructuring. What applies to China, the U.S., and other relationships, applies to other nations as well. One should expect further exploration of antiquated subsidies which have been bypassed by new market conditions. Such tracking can identify new opportunities for change and innovation.

De-subsidization will create market alternatives based on new forms of delivery. Such adjustments will be cost analyzed and competitively compared to achieve higher efficiency. Legislators and internationally active framers of distance trade, such as the World Bank and the World Trade Organization can use this opportunity to pinpoint, develop and scale up models which reflect transport cost sensitive sectors and practices. In addition to greater accuracy and fairness, the President’s initiative for higher prices can lead to higher capabilities, more efficiencies and better services. A good start!

Professor Czinkota teaches international business and trade at Georgetown University and the University of Kent. His latest book is ‘In Search For The Soul Of International Business (Businessexpertpress.com) 2018