The Role of International Trade-Morocco

This week, our subcommittee country is Morocco. And we found some information about Morocco. As we know that Morocco locates on North Africa, territorial area is 710,000 square kilometers and a population is 32 millions. Moroccan GDP was $ 91.7 billion, $ 2,839 per capita in 2010. Economic growth rate was 3.2 %, the inflation rate was 1.4%. And we can say that Morocco is the emerging economic. Even they have ample phosphate ore; they still rely on import and export for their trade in recent years.

Morocco exports and imports most of its goods from the European Union, with France being its largest trade partner, providing one-fifth of total imports and accounting for one-quarter of exports. Spain comes in second place, followed by the United States, Italy, and Saudi Arabia. Moreover, Morocco signed some many FTA with different countries in the world. Also they have good cooperation relationship with China. Because France has dominated Morocco before, France is their biggest foreign direct investor.

In my opinion, Morocco really has many comparative advantages. They have ample nature resources and have many trade partners in the different types, like USA, China, UN, and Arabic, which are really big markets in the world. In addition, I think they not only have geographic location, but also language talents in advance. Most Moroccan can speak more than 3 languages, which is really helps them to have international trade. And I am really surprise that Morocco is a really potential country in the world. 

US-South Korea Trade Agreements’ impact on Taiwan

USA and South Korea sign trade agreement and effective on March 15, 2012. The agreement will promote the further integration of the US and Korea economies and enhance the competitiveness of US businesses in the world’s 12^th large economy. They reduce their trade barrier and create more job opportunities to domestic people. However they also bring some barrier to their neighborhood, like my country, Taiwan.

South Korea is one of the major competitors of Taiwan in the international arena, and the United States is Taiwan's third largest export; therefore, US-South Korea FTA has some impact on Taiwan. According the survey of Taiwan Institute of Economic Research, the real GDP of Taiwan will decrease 0.04%, total export will decrease 0.06%, total import will decrease 0.09%, and trade balance will reduce $ 22 million. All these numbers show the impact to Taiwan’s internal trade.

Export structure to USA of Taiwan is similar with South Korea, 70% concentrate on information and electronic, mechanical products and automotive-related production. While the FTA effective, Taiwan will have to pay higher tariffs, relative to South Korea. Taiwan's textile industry also took a hit with US-South Korea FTA.

Faced with the impact of the US-South Korea trade agreement on Taiwan, the Taiwan government should quickly make a policy response. And the government of Taiwan try to deal with the problem from impact, Including actively promote Taiwan and the United States signed a trade agreement, promote Taiwan to join the TPP, explore other emerging markets, and assist industrial upgrading and transformation.

Helping Developing Countries Policies

In the class, some classmates discussed the Adam Smith’s “The Wealth of Nations”. I have kind of same opinion with it. I think the trade of world should be open and free; then every nation can get their biggest profits by international trade. Moreover, world’s economics is not zero-sum game. I think the world’s economics is no limit; nations can get more profits via free trade.

Why is it so important for developing nations to be involved in trade, and what institutions and policies exist to help developing nations? I think that developing nations have some advantage, such as labors and raw material, is developed nation don’t have. In these reasons, that developed nations help developing nations to trade widely without barriers is very important. So the WTO has special program to help developing nations, such as IMF, World Bank, and GSP. All these organization’s goal is helping developing nations. They help developing members to improve their skill of produce and build schools and hospitals. They believe stable economics is the first factor for developing nations to trade widely.

Some critics mention that free trade is not all-win things. Trade liberalization not only affects the allocation of resources of the world, but also affected the rapid development of international trade, the rapid development of international trade; promote the development and deepening of international division of labor and exchange. Although the benefits of free trade, many development economists from the reality of the country's economic development, but that free trade does not necessarily conducive to the economic development of developing countries. The imbalance and inequality of the development process, lead to the development countries facing deteriorating terms of trade, trade preference erosion and other issues; coupled with the long-term decline and short-term fluctuations caused by the impact of the international raw material prices. Also tariff protection and subsidy policies of developed nations are dependent on primary commodities in developing countries occurrence of the phenomenon of international payments imbalances. This complex issue makes the developing countries in the long-term disadvantaged position due to the process of trade liberalization.

However, in my opinion, I think that decrease the barriers of trade and nations can focus on the comparative advantage products that can help all nations to be globalization.

Taiwan Trade with USA

After reading the articles about Chinese Tire tariff and Chinese Chicken Feet, I am thinking that international trade is very complicated. Every country wants to get the biggest profits in the trade, so countries usually do some in the tariffs. Moreover, China and USA are the important country in the world. Both of them have many consumers in the market. So many countries want to trade with them, for example, my hometown, Taiwan. China is the major country that Taiwan trade with. Taiwan is a small country, and relies on export to maintain domestic economics. And Taiwan wants to sign FTA contract with USA that can help Taiwan more openness and trade with more places.

However, Taiwan has the big problem with USA now. It is about American beef. USA wants to export American beef into Taiwan, but Taiwan government found that American beef have Ractopamine in the meat. And it is not legal in Taiwan. So the Congress of Taiwan fights a lot of this issue. President Ma said that customers have option; they can choose what they want and what they don’t want. The major issue is that Taiwan has to solve this problem and sign the FTA with more countries. Expending the trade places in the world is very important for Taiwan, because 70% GDP of Taiwan relies on export. And after this, Taiwan needs to sign TPP with Asian countries. Have to say, Taiwan lagged behind South Korea many now.

Trade Barrier in Taiwan

This week is talk about what kind of unintentional barrier affect international trade. And I want to talk about my country, Taiwan; we have some unintentional barrier in trade. There are natural disasters and political problems.

Taiwan which is in the tropical area has lots typhoons every year especially in summer. And also Taiwan has lots earthquake due to it is located the plate between the Pacific Ocean and the Indian Ocean. However, Taiwan is a island and locate in good position, I think it’s easy to trade with global. But compare with the near countries, Hong-Kong and South Korea, they have more trade than Taiwan. Why? I think it’s all because the weather. Typhoons and earthquakes affect the companies don’t want to trade with Taiwan.

Moreover, it is political problems. Because Taiwanese care political too much, people usually got fight in this issue. When the election is coming, the society is not stable. This is not government’s problem. Of course, president wants the economics in Taiwan is growing. It is all because people are emotional. And we have too many elections. In 2003, USA mentioned this problem before in a trade survey. With unstable society, international companies won’t trade with it. To sum up, compare with Hong-Kong and South Korea, they don’t have kind of problems. So they grow up in economics so fast.

Comparative Advantage in International Trade

According to the article of US auto in Carbaugh text, it shows the healthcare benefits really negatively affect comparative advantage. In this case, the big three companies in US was competed by Japanese companies. It all because that the big three cost much money to treat their active employees and retirees. Even the US government supply them solve this problem, GM Company still bankrupt. Relatively, Japanese automakers cost healthcare less than. In my opinion, in comparative advantage, Japanese automakers should produce more cars in the world, and US automakers can focus on different product.

And I want to talk about my country, Taiwan, which provides healthcare by nation. Taiwan is famous about producing semiconductor. Compare other counties which produce semiconductor, Taiwan has comparative advantage of it. It is that unit product price is lower than other counties; due to Taiwan provides national health insurance, companies can pay healthcare not so much.

Moreover, I want to talk about an agreement between Taiwan and China called ECFA (Economic Cooperation Framework Agreement) in June 29, 2010. This agreement protects Taiwan and China can trade more free and make Taiwan export to China more. But it makes that Taiwan decrease export to other countries, for example Japan, Euro and US. Meanwhile, Taiwan has significant comparative advantages of Electrical and Electronic anti see the retreat of global exports, even industry comparative advantage reversal phenomenon. Taiwan excessively focus on the China that makes some future problem.

How important about Taiwan’s openness

I want to talk about my country. I come from Taiwan. Taiwan is a small country which is little bigger than Rhode Island and next to China. According to Taiwan has special political problem in the world, which Taiwan has to be openness is very important. Taiwan is a small scale economy in the world. Due to the amount of investment is not really huge.

However, in my opinion, I think openness for Taiwan is very important. As I said Taiwan has special political problem, if Taiwan were not an openness country, that Taiwan will face some threaten from China. And then Taiwan maybe not exists anymore. So Taiwan has to be openness, find foreigner country’s help to become stronger state in the world.

Taiwan is a fairly successful example of economic development in the international community, and it plays a crucial role in the global division of labor and shared global markets. Being an openness economy in the world, interdependence is a big point for countries. Taiwan develops their country is successful, due to Taiwan is a democracy country. Moreover, our president Mr. Ma Ying-jeou wants to Taiwan joins a lot of conferences in the world positively, for example FTA (Free Trade Area). And make another contract with China; make sure that Taiwan can free trade with all countries to earn the biggest profit.