The shifting World of U.S. Trade Policies

January 13, 2009 at 1:13 pm

The New Year begins with a dynamic and complex trade environment that could have implications on the United States. Starting this month, the European Union will allow 16 developing countries (Armenia, Azerbaijan, Bolivia, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mongolia, Nicaragua, Paraguay, Sri Lanka and Venezuela) duty-free access to the EU market and will let Switzerland to become the 25th State to join the barrier-free Schengen Area. In the Pacific region, the Asia-Pacific Economic Cooperation (APEC) will reduce trade transaction costs by 5 percent by 2010, while China expands its market reach signing a Free Trade Agreement with New Zealand and planning the longest railway system that will link the country to Germany by Mongolia, Russia, Belarus and Poland. Middle East and Africa explore the opportunity of reciprocal Free Trade agreements; while in South America Mercosur strengthen its relationship with the European Union.

For the United States, these changes will impact how the new presidential administration supports the passage of three pending Free Trade Agreements (FTAs) with Colombia, Panama and South Korea. If approved, these FTAs will enable U.S. businesses to competition an equal paying field with other foreign enterprises. Currently, the only contract with Panama has a slight chance to be approved and if it is, th Panama FTA will allow U.S. construction companies to take advantage of the contracts related to the expansion of the Panama Canal. According to the U.S. Department of Commerce, 35 percent of U.S. exports go to Canada and Mexico, a figure that has nearly tripled since 1994, when NAFTA came into force.

The NAFTA market is especially important for U.S. manufacturers since a total of 13.9 million Americans are employed in manufacturing, according to the Bureau of Labor Statistics. These workers produced $870 billion worth of exports in 2007. Canadians and Mexicans bought approximately $330 billion of U.S. manufacturing output every year. Exports from the United States support an estimated 12 million jobs while an additional 10 million jobs are supported by imports, most of which are not just for large businesses. International trade impacts everyone from online fashion companies exporting their goods using web 2.0 technologies, the small business that imports parts to produce and export innovative goods, the small retailer who imports/exports merchandise overseas and the fashion designer selling online. Learn more about international trade by visiting http://www.nkychamber.com or contact Daniele Longo, (859) 578-6385 (D. Longo, Business Journal, Northern Kentucky Chamber of Commerce, January 1, 2008).

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Entry filed under: Free Trade Agreements, Monthly Column, Trade.

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