News from the USTR: TTIP Update from Brussels

Today, the United States Trade Representative Michael Froman addressed the Transatlantic Trade and Investment Partnership during his stay in Brussels.

Highlights:

“Today, the U.S. and the European Union are each other’s largest economic partners, with $2.6 billion dollars’ worth of goods and services flowing between us each day. We invest nearly $4 trillion in each other’s economies, creating the world’s largest investment relationship. And more than 13 million people owe their jobs to the transatlantic economic relationship. The U.S.-EU economic partnership is second to none.

“But we know that we can do more. We can do more for economic growth. We can do more to create jobs. We can do more to strengthen rules-based trade that supports the entire global trading system.

“And that is precisely why we launched the Transatlantic Trade and Investment Partnership, or T-TIP. Together with the Trans-Pacific Partnership, or TPP, and the work being done at the WTO to negotiate a multilateral Trade Facilitation agreement, a plurilateral Trade in Services Agreement (TISA) and an expansion of the Information Technology Agreement (ITA), we see T-TIP as an opportunity to raise the standards, to introduce new disciplines and ultimately to strengthen the multilateral trading system.

Read more here.

Jeopardy!

One of the smallest nations in the world is also the oldest country in Europe and the oldest republic in the world. Most of its citizens earn their living making and selling postage stamps. Which nation is this?

 

Answer in the comment section below. The answer will be revealed at next week’s “Jeopardy!”

Answer to last week’s “Jeopardy!”: Invercargill, New Zealand. 

Japan and Asia: Oceans Apart

It is a common perception that since Japan is in Asia, it should be culturally closer to Asian economies like China and the four tigers (Hong Kong, Singapore, South Korea, and Taiwan) than Western countries in Europe and the USA. However, research in the area of cultural values suggests that this is not the case. In fact, Japan is found to be more culturally dissimilar to Asian countries than are the USA and European countries. Based on the well-known cultural dimensions articulated in Geert Hofstede’s Culture’s Consequences: Comparing Values, Behaviors, Institutions and Organizations Across Nations, the masculinity index of Japan is 95. Singapore and Hong Kong’s masculinity scores are 48 and 57 respectively while those of the UK and the USA are 66 and 62. The masculinity index focuses on the degree to which a society reinforces the traditional masculinity work role model of male achievement, control and power. A high masculinity index for Japan indicates a high degree of gender differentiation. In such a culture, males dominate a significant portion of society and its power structure, with females being controlled by male domination. In Singapore and Hong Kong, this is not the case.

In addition, the uncertainty avoidance scores of the UK and the USA are 35 and 46, once again in between Japan (92) and Singapore (8) and Hong Kong (29). Uncertainty avoidance index focuses on the level of tolerance for uncertainty and ambiguity in a society. A high uncertainty avoidance index indicates that Japan has a low tolerance for uncertainty and ambiguity. This creates a rule-oriented society that institutes laws, rules, regulations and controls in order to reduce the incidence of uncertainty. Thus, Japanese culture encourages less risk-taking while in Singapore and Hong Kong, risk-taking is almost mundane.

While culturally distinctive, Japanese culture and business practices are perceived to be closer to those of South Korea than to China and other Chinese-dominated countries such as Hong Kong, Singapore, and Taiwan. Relationship building is a key element of business transactions in Japan. To be able to join an existing network is especially important for companies trying to conduct businesses in apan or trading with Japanese companies. Reciprocity in relations and saving and maintaining the “face” of Japanese counterparts are priorities fo sustaining relationships. The high uncertainty avoidance index suggests that when dealing with Japanese companies, it is important to show one’s commitment to a plan of joint action.

For more information, refer to Fundamentals of International Business: 1st Asia-Pacific edition by Michael Czinkota et al.