Topic Category: Trade & Finance

Shifts in the value of the U.S. dollar can be felt in a variety of ways. Old assumptions regarding the impact of a rising or falling currency may not necessary hold true. In this era of globalization and infinite supply chain strategies, new realities are increasingly painting a different picture.

Currency Assumptions Fade

A weakening dollar traditionally has been assumed to result in less expensive American exports, making them more competitive abroad. A weakened dollar also is expected to cause the price of U.S. imports to rise. Increasingly, however, both U.S. and foreign manufacturers rely on imported components and materials, making the impact of exchange rate fluctuations more nuanced.

Topic: Trade & Finance
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The title of this article is the headline of a June 7, 2006 piece in The Straits Times, a Singaporean newspaper. According to a recent survey by the American Chamber of Commerce in Singapore, senior U.S. executives within the six-nation Asean bloc are reported to be “positively exuberant” about operating within southeast Asia, they are “optimistic about their growth and profit prospects this year and in 2007,” and three-quarters of them indicate that their “company’s business will grow in the next two years. No one expects a reduction in business.”

Topic: Trade & Finance
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The U.S.-Central American-Dominican Republic Free Trade Agreement, referred to as DR-CAFTA or simply CAFTA, includes Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. The agreement is anticipated to spur North-South trade and investment while promoting stability and the rule of law in the region.

Leveling the Playing Field

Prior to the establishment of the accord, the U.S. weighted average tariff rate on CAFTA countries was 2.6 percent, according to the World Bank. This reflected the fact that approximately 80 percent of CAFTA imports already entered the U.S. duty free. On the other hand, the weighted average tariff rate on U.S. goods was 10.1. percent in the Dominican Republic, 5.8 percent in Costa Rica, 6.1 percent in El Salvador, 5.8 percent in Guatemala, 7.3 percent in Honduras, and 2.3 percent in Nicaragua.

Topic: Trade & Finance
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In May, the U.S. Department of the Treasury issued its much anticipated, semiannual Report to the Congress on International Economic and Exchange Rate Policies. The report’s key conclusion, that China is not a currency manipulator, was met with incredulity on the part of a number of members of Congress, some who suggested that the Treasury’s inaction would move them closer to enacting provocative legislation to compel China to allow the yuan to rise.

To them, it’s simple. China’s currency is purposely undervalued to encourage Chinese exports and discourage imports. Such “manipulation” explains much of the bilateral trade deficit, which is costing U.S. jobs. Thus, appreciation of the yuan is a matter of such urgency that any adverse consequences of compelling that outcome would be trivial by comparison.

Topic: Trade & Finance
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Question: Globalization is affecting manufacturing. What’s the good and the bad?


The integration of traditional manufacturing, new technologies, national markets, and improved supply chain management— all spawned by globalization—is transforming American manufacturing. In the process, resources have shifted to sectors with competitive advantages.

As a result, productivity has climbed to new highs and due to the American ability to change and improve, innovation is flourishing. Brawn power—the use of muscle on the factory floor—is quickly being replaced by brainpower.

Topic: Trade & Finance
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Buried beneath the daily stories about car bombs and insurgents is an underappreciated but comforting fact: The world has somehow become a more peaceful place.

War Is Declining

As one little-noticed headline on an Associated Press story recently reported, “War declining worldwide, studies say.” According to the Stockholm International Peace Research Institute, the number of armed conflicts around the world has been in decline for the past half century. In just the past 15 years, ongoing conflicts have dropped from 33 to 18, with all of them now civil conflicts within countries. As 2005 draws to an end, no two nations in the world are at war with each other.

Topic: Trade & Finance
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In today's extremely competitive business environment, securing foreign marketshare is essential for many companies to succeed well into the future. But to achieve this, it is imperative to first identify, assess and choose the right markets to pursue. Although market selection may seem obvious to some, selecting the wrong ones can be disastrous.

By establishing a set of guidelines and performing a thorough analysis, you will reduce the risks. To make the job easier, consider some of our guidelines below.

Topic: Trade & Finance
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Are the U.S. government’s new antiterrorism policies and regulations for cross-border commerce serving, in effect, as non-tariff barriers? If so, are they trumping the long-standing objective of maintaining a relatively open and easily crossed international border between the U.S. and Canada?

What are the principal costs involved in complying with the new security mandates? And, what are the likely strategic responses of American and Canadian companies to these new security regulations when it comes to decisions related to supply line logistics, direct investments, and the location of production?

Topic: Trade & Finance
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People who live in countries open to the global economy enjoy a higher standard of living, on average, than those trapped behind high-tariff barriers. They eat better and live longer. Their children are more likely to attend school than work in the fields. They can speak, assemble and worship more freely and elect their rulers democratically. And because economically open countries are more likely to be democracies, they are less likely to fight wars with each other.

Topic: Trade & Finance
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FAQ: What is the impact of the U.S.-Chilean Free Trade Agreement?

Talking Points:

On September 3, 2003, after years of intense negotiations, President George W. Bush signed the U.S.-Chile and U.S.-Singapore Free Trade Agreements. As a result, Chile and Singapore joined Israel, Canada, Mexico, and Jordan to become the United States’ fifth and sixth free trade partners.

As the first comprehensive trade agreement between the United States and a South American country, the U.S.-Chile Free Trade Agreement is anticipated to boost bilateral trade and investment. Largely modeled after NAFTA, the Chilean accord encourages progress on the Free Trade Agreement of the Americas, which is anticipated to be completed in the near future.

Topic: Trade & Finance
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