On August 22, 2012, after 18 years of negotiations, Russia became the 156th formal member of the World Trade Organization (WTO). With the world’s ninth largest market, a $1.9 trillion economy, and—with a population of 140 million—Europe’s number one consumer market, Russia was the largest economy in the world that was not a member of that august international trade governing body. As part of its accession package, Russia agreed to implement a host of economic reforms that will further open the country’s markets to the goods and services of its WTO trading partners, ensure greater respect for the rule of law, better protect intellectual property rights, and safeguard foreign investors.
The housing sector has been the poster child for the part of the economy that has lagged during the economic recovery. The housing bubble that existed prior to 2007 was characterized by buyers with no or a low down payment and teaser interest rate mortgages who bet on price appreciation as well as speculative investors hoping to “flip” their purchases amid rapidly rising prices. Low interest rates, falling lending standards, and creative financial engineering of collateralized mortgage instruments helped finance housing purchases. Further, government policy aided and abetted the housing mania. The result was a period in which additions to the housing stock exceeded what population demographics would dictate.
Manufacturers can help policymakers better understand their needs: first, by helping lawmakers gain a true appreciation for manufacturing's importance to economic growth; and second, by alerting them to the very real challenges that American manufacturers face, many of which stem from negligence on the part of policymakers. To this end, MAPI has done the research for NAM's 9th edition of The Facts About Modern Manufacturing, a snapshot of how American manufacturing is faring in this evolving global marketplace.
Global Economy, Competitiveness, Government Policy, Operations, Supply Chain
With its Plan Nord, the Quebec government has committed to generating CAD 80 billion in investment over 25 years in the north of the province, including several billion public dollars to build core infrastructure and improve local socioeconomic conditions. The area’s resources include 75,000 square miles of commercial forest; vast hydroelectric, wind, and solar power potential; unspoiled landscapes and wildlife to sustain tourism; and important mineral resources—including rare earth elements.
A few years ago, many (if not most) energy analysts expected that U.S. oil production would continue its secular decline as older oil fields played out and as finding and developing new production capacity became increasingly difficult and expensive. At the same time, long-run projections showed U.S. oil consumption expanding over time as both the economy and population grew. Both projections have been stood on their head; the trends in production and consumption over the last five years dramatically illustrate how quickly the U.S. oil situation has reversed course.
China produces some 95% of rare earths but controls less than half of the global resource base. The country achieved this dominant position by lowering prices. Attractive pricing and the ability to avoid environmental consequences associated with mining and processing rare earths essentially prompted other countries to cede such operations to China.
The relationship between the two economic juggernauts cannot exactly be characterized as free trade nirvana, and there is a growing sentiment in the United States that China has not fully lived up to the commitments it made when joining the WTO. This is fueled in no small part by concern over the massive trade surplus China has built up with the United States, its largest trading partner. By deliberately undervaluing its currency, critics charge, China has propped up its export-dependent growth model.
In the aftermath of the September 11, 2001 terrorist attacks, one of the victims of increasing security concerns in the United States was Canada-U.S. trade. "Security trumps trade" became the new U.S. policy principle as myriad additional verifications of freight and individuals crossing the Canada-U.S. border were put in place to protect against potential terrorist threats.
Global Economy, Competitiveness, Foreign Trade, Imports & Exports
Intense discussion of the eurozone financial crisis has centered on fiscal accounts and the banking sector. Little attention has been paid to the impact on trade beyond the obvious fact that if there is slower eurozone growth, import growth will also be down. The adverse trade impact of the eurozone on third countries, however, and on U.S. exports of manufactures in particular, is significant and growing, and faces uncertain prospects ahead.