When were talking about trade, you’ll probably hear the words “investments”, “portfolios”, “capital”, “debit and credit”, and BOP (thats balance of payments). These words to global trade advisors and financial aficionados are like second nature, but to those just breaking into the world of International Business, they can be daunting words. Let’s use an example that will give you a visual picture of just how everything comes together to understand how countries measure international business activity, balance payments, and look at exchange rates and altered trade prices.
In business, trade is a big word. Not in the sense of how you spell it, but rather how we use it, as there are many compartments to trading with different countries. From exports, to labor, to production and prices, trade isn’t just the exchanging of goods. Lets break it down and use the example of clothing.
When it comes to business, there is more than one important facet to creating a successful and productive company. Most importantly, is the part culture plays. Think about it. Culture, defined, is an integrated system of learned behavior patterns that are characteristic of the members of any given society, and culture is thus shared through various groups of shared interests. Essentially, it’s the things people share together; language, social cues, behaviors, religions, and even various attitudes and manners that are accepted. In order to produce a successful business globally, you must learn these special aspects of culture, otherwise, you risk not only embarrassing yourself, but loosing an important deal.
President Trump signed an executive order that will withdraw the United States from the Trans-Pacific Partnership (TPP). The TPP is the largest planned regional trade accord in history, and was designed for the United States and 11 other nations in Asia and the Pacific to build a free trade zone. Its purpose was to lower tariffs, resolve trade disputes, and make patents safe, all while enhancing U.S. power in Asia.
The new administration has fulfilled Trump’s campaign promise, by changing America’s trade ties with other countries, and abandoning the TPP brokered by his predecessor. The withdrawal from multinational trade agreements stems from his belief that they “erode American jobs and opportunities”, and has had large geopolitical implications in Asia, and throughout the world.
The Trump Administration will seek modest changes to the North American Free Trade Agreement renegotiation process. According to a draft of a letter sent to Congress last week, the Administration is seeking a more conventional approach to trade negotiation.
NAFTA, which was established in 1994 between Canada, the U.S., and Mexico, aims to reduce trading costs, increase multilateral investment, while helping North America become more competitive.However, during the 2016 presidential campaign, President Trump made the debate over free trade one of the central topics of his campaign.