Greece: Time to Invest Again?

By Marcus Bensasson

The country’s long-term local currency debt was upgraded to Caa1 from Caa3, New York-based Moody’s said in a statement yesterday. The nation’s short-term debt rating is unaffected and remains not prime, or NP.

The significant improvement in fiscal position over the past year and the view that the government remains committed to fiscal consolidation underpin a forecast of a gradual decline in public debt, Moody’s said. The credit-rating company also cited gains in Greece’s economic outlook, based on both a cyclical recovery and the progress made in implementing structural reforms and rebalancing the economy, further supporting the downward trajectory of the public debt ratio.

Greece’s economy will grow this year for the first time in seven years, the European Commission predicts. The country received two rescue packages with pledges totaling 240 billion euros ($322 billion) from the euro area and the International Monetary Fund and underwent the biggest sovereign debt restructuring in history in 2012.

Read the whole piece at Businessweek

HOST COUNTRY POLITICAL CLIMATE /International Marketing 10th/

The rapidly changing nature of the international political scene is evident to anyone who regularly reads, listens to, or watches the various news media. Political upheavals and changes in government policy occur daily and can have an enormous impact on international business. For the executive, this means constant adjustments to exploit new opportunities and minimize losses.

Besides the international company, the principal players in the political arena are the host country governments and the home country governments. Sometimes transnational bodies or agencies such as the European Union (EU) or the World Trade Organization (WTO) can be involved. Within a national market, the interactions of all these groups result in a political climate that may positively or negatively affect the operations of an international business. The difficulty for the global company stems from the firm being subject to all these forces at the same time. The situation is further complicated by the fact that companies maintain operations in many countries and hence must simultaneously manage many sets of political relationships.

Host country a country that contains an operational unit (marketing, sales, manufacturing, finance, or R&D) of an international company. Any country that contains an operational unit (marketing, sales, manufacturing, finance, or research and development) of an international company can be defined as a host country. International companies deal with many different host countries, each with its own political climate. These political climates are largely determined by the motivations and actions of host country governments and local interest groups.

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EU, U.S. to Commit to Remove All Duties on Transatlantic Trade

U.S. President Barack Obama and European Union leaders will promise to remove all tariffs on bilateral trade at a summit on March 26, an ambitious step towards the world’s largest free-trade deal, according to a draft statement seen by Reuters.

The joint declaration, if delivered as laid out in the draft, seeks to overcome tensions following Washington’s offer to cut its duties by less than the Europeans had hoped for and after Brussels pledged to remove almost all of its own tariffs.

“The EU and the United States are firmly committed to concluding a comprehensive and ambitious Transatlantic Trade and Investment Partnership,” the draft statement reads, referring to U.S.-EU free-trade talks by their official name.

“Those goals include eliminating all duties on bilateral goods trade,” says the statement, which will be delivered at the end of the day-long summit in Brussels.

By Barbara Lewis and Robin Emmott, Reuters

Read Full Article on Reuters »

No More Silos! (Part 5)

The New Transatlantic Trade and Investment Partnership (TTIP).

Andreas Pinkwart, former minister of science, technology, research and innovation, and now president of Handelshochschule Leipzig in Germany, said that if innovation and free trade are maintained, they will stimulate open borders. He sees negotiations on agriculture as a key impediment to progress in a transatlantic partnership but expects its success.

The TTIP, a newly inaugurated trade negotiation between the United States and the European Union may lead to further open export markets, expand the U.S. and E.U.’s investment partnership, address non-tariff barriers, and increase cooperation on issues including combatting discriminatory localization trade barriers and promoting SMEs’ global competitiveness.

The three key challenges that the partnership must address are climate problems, terrorism and economic imbalances. Also, the TTIP collaboration will serve well as a political and economic counterweight to China, even though the European Union and the U.S. combined are likely to soon have a lower GDP than China.

Speaking on behalf of the German government, Peter Fischer, head of economic affairs at the embassy of the Federal Republic of Germany, suggested strong encouragement of a TTIP. Since the E.U. and the U.S. are the largest economies in the world, their collaboration could only strengthen world trade, in particular with a convergence of regulatory approaches. Results would be achieved within 18 to 24 months, he said.

Howard Fogt, a partner at Washington, D.C.-based law firm Foley & Lardner LLP who specializes in international trade regulation, took issue with such a time frame. He believes that the implementation of an agreement would be long, slow and expensive. Politically, he sees the leadership for a TTIP as emerging from the bottom, if major movements are to be achieved. He also stated repeatedly that culture matters and economics cannot be negotiated by itself, particularly when fundamental issues such as food are to be discussed. (For example, the acceptance or rejection of hormone-injected beef demonstrates national differences.)

This article is a part of a series written by Michael Czinkota and Charles Skuba who report on the March 2013 meeting on trade policy and international marketing, a collaboration between the American Marketing Association, Georgetown University and the U.S. International Trade Administration. View part 4 hereGuest writer Charles Skuba teaches international business and marketing at Georgetown University. He served in the George W. Bush Administration in trade policy positions in the U.S. Department of Commerce.