THE U.S. CUSTOMS CONTAINER SECURITY INITIATIVE (CSI):

The Container Security Initiative, or CSI, was officially kicked-off in January of 2002.  The CSI program represents an aggressive attempt by U.S. Customs to greatly improve detection of sea-bound weapons of mass destruction.  CSI involves the posting of Customs officials at foreign ports around the Western Hemisphere and the world in order to allow for the screening of high-risk U.S. bound cargo containers before they even leave their foreign ports of origin. 

So-called “mega ports” handle a great proportion of the world's trade and are the foreign embarkation points for the vast majority of goods shipped to the United States and the world.  Customs initial objective was to implement the CSI program at the world's 20 largest mega ports.  However, due to the high level of interest in the program, Customs officials are now preparing an extended list of CSI-targeted ports.  This new list will add an extra 21 ports in addition to the current 20.  The CSI program's stated goal is "to facilitate detection of potential security concerns at their earliest possible opportunity." In order to achieve this goal, the program consists of four core elements:

 1-     Using automated information to identify and target high-risk containers;

2-     Pre-screening those containers identified as high-risk before they arrive at U.S. ports;

3-     Using detection technology to quickly pre-screen high-risk containers; and

4-     Using smarter, tamper proof containers.

            The CSI program would help to increase security to the U.S. port but also, the transportation may take more time to pass all of the security check process according to new policy. However, safety is priority concerned and the goods in the vessel considered timing. I strongly recommend to continue this policy even transportation have to be delay.  

Taxation of U.S. multinational companies

            

Most of the American corporations were criticized keeping their profits overseas in order to avoid U.S taxes. According to the recent debate about increasing taxes on U.S multinationals, this decision will help creating jobs in U.S. as well as protecting the industry.

            We do not think that this idea has a good shape for American economy. Because it discourage multinationals and companies to invest at home and response to the demand of foreign market, which I think is another protectionist practice made by Obama’s administration (Jay H., 2010).

            Based on a report discussion how U.S. multinational companies strengthen the U.S. economy, it is proven that the expansion of US companies does not reduce a multinational firm’s domestic activities instead it does increase it. In my opinion, U.S. government should not increase taxation of multinational companies.

            To demonstrate, here is an example of case study that was conducted by. It illustrates how porter & Gamble (U.S. multinational) generating over $25 million from its operation throughout the world especially in developing countries. Its global engagement contributes in creation jobs in the U.S. one in five P&G U.S. jobs and two in five Ohio based P&G jobs depends directly on its global business (Matthew J.S., 2009).

            However, if we think about all those U.S. multinationals operating globally, their global engagement will certainly have great benefits for U.S. economy as well as on creation new job opportunity. For this particular reason, It is not appropriate to raise tax on U.S. multinational companies because as republican argue, it will decrease jobs in U.S. private sector. We have to think about the global market and what is good for United State within the next coming years.

           

             In addition, US companies can operate from USA and export its products to other countries. However, US corporations compete against companies from around the world in an increasingly global marketplace, in addition to some demand and cost factors.

            Therefore, US Corporation may often choose to access local markets rather than exporting their products from the United States. By doing so, US operations and workers become more competitive in which they support local jobs and wages, while increasing the profitability for the shareholders in the US.

WTO APPLICATION IN THAILAND

In 1997, the Thai’s government faced with financial crash resulting the severe recession. In order to improve the economic the World Trade Organization (WTO) step over to promote free trade by minimizing trade barriers as follow the objectives below.

-          To assure greater trade liberalization of Thailand’s trading partners with the aim to reduce or eliminate tariff and non tariff measures;

-          To improve the effectiveness of the rules governing international trade to bring about fairness and transparency in the world market’

-          To prevent any new trade barrier that could obstruct Thailand’s international trade.

The main obligations of Thailand under the WTO which have affected Thai legislation can be as follow:

Market Access

        Thailand has obligated to reduce the tariff rates for all 740 items by equal rate reduction each year within ten years. Beginning from 1995, the domestic subsidy for the agricultural sector has been subject to decrease equally each year from Baht 22,126.18 million to no more than Baht 19,028.48 million by the year of 2004. This would attract foreigner investor come to invest in Thailand. In contrast, Thai’s government will lose income from tariff but if we look deep to the economic after we open the market, the price of the product that they import will lead to price competition to the local market. However, the consumer will get benefit of this competition, because consumers have more choices and the price will decrease.

        In my opinion, the WTO step over to assist Thailand to overcome problems of trade against more powerful trading partners is effective and I would like to support Thai’s government to continue WTO policies.

The North American Free Trade Agreement (NAFTA)

    

    

NAFTA, The North American Free Trade Agreement, was signed in 1994. NAFTA is basically a free-trade agreement between: Canada, Mexico, and the United States. The idea behind it is to promote the North American economy and to protect the intellectual property rights of the businesses. Under the NAFTA, all non-barriers to agricultural trade between United States and Mexico were eliminated. In 1998, all tariffs related to agricultural trade between United States and Canada was removed. Between Mexico and Canada, most of the tariffs were eliminated within 15 years from the beginning of the NAFTA application.

            Certainly, one sector of the U.S. economy that has been affected the most by the NAFTA is the labor union. Almost all of the labor unions in the U.S. have opposed NAFTA because they fear that they would lose their jobs to the Mexicans because of lower wage rates there. Also, there is a trade deficit especially between United States and Mexico. Since 1994, there are many jobs destructed than jobs created in all 50 states. An increase in wages of the workers producing exports, but growing trade deficits have meant that the number of workers hurts by imports has exceed the number who have benefited through increased exports.
    
            In contrast of that, the agricultural sector of U.S.A has seen an overall positive effect with 22% growth of agricultural exportation to Canada and Mexico. It is also important when we look at the national GDP and how United States is a big player under NAFTA. U.S. GDP is 20 times larger than Mexico’s GDP and 10 times larger than Canada’s GDP.
           

However, Mexican economy benefited from NAFTA more than U.S.A and Canada.  First, Mexico growth into richer countries by the way the per-capita income increased. Second, the unemployment rate decreased progressively because American and Canadian industries moved and continue moving to Mexico. In addition, it increases foreign investment and exportation to Mexico. As it had some benefits, there are some inconvenient of NAFTA on Mexican economy. Mexico will probably lose much of its small businesses, because the trade barriers come down.

U.S. should continue to use tariffs as a method of controlling trade

           The U.S. should continue to use tariffs as a method of controlling trade. I agree if their purpose use tariffs as a method to help and protect or reserve American job, also protects American companies from unfair competition. However, real reason that the government prohibits some imports and taxes is to rewards the industries with the most political influence.

                                            "Phoenix Talons"

           

            The article “Chicken Feet”

The result of investigation of the China Animal Agriculture Association found that “the import of American chicken parts made the competition in the domestic market very severe”. China’s Ministry of Commerce announced imposing antidumping tariffs ranging from 43.1%-105.4% on imports of chicken parts from the U.S.  Also, President Obama fights back by announced tariffs of up to 35% on tire imports from China. Plus Obama signaled that the U.S. would also take a tougher stand on Chinese currency, which economists say is undervalued by as much as 40% driving down the price of Chinese exports.

            In my perspective, China and The U.S. though we are punishing a foreign government for hurting us by imposing tariff to each other. But the foreign politicians don't care very much that we restrict imports from their country. In fact, they may like it. They are politicians, not producers. They don't export anything expect speeches. Our import barriers just give them an excuse to subsidize their favorite exporters or otherwise increase their power.The real victims of our government's retaliation are you and the foreign workers. The foreign workers don't get to sell to you, and you don't get to buy what you want at the lowest price.

War on terrorism as an unintened barrier to trade?

          I agree that terrorist attack as a cause of unintened barrier to trade. After September 11, 2001 or called Nine Eleven, As the article state that President George W. Bush instructed the U.S. Coast Guard to take additional measures to guard bridge in U.S. harbors and sites such as the Statue of Liberty. American government launch a new security policy, therefore to secure their people and their important facilities.

However, more tightten security at air and seaports as well as land border crossing. Some disruption of trade flos during the immediate afterthe attack seemed almost inevitable, additional frictiona trading costs due to tightten sccurity have effect trade not only in North America but also world wide.

Detroit's Big Three!

According to the article discussing the Detroit’s Big Three obstacles, it is shown that General Motors, Ford and Chrysler are losing thousands of dollars on cars produced. Because of the retiree healthcare from which workers are  benefiting from social advantages which conducted Detroit Big Three losing up to $ 1,500 per vehicle.
In my opinion, to be competitive, General Motors, Ford and Chrysler should respond to the market demand by offering diverse products, but it is a hard task to execute when the total dept is still increasing especially the retiree healthcare payments which were for about $ 7.5 billion for GM and $ 6.3 billion for Ford.
I also think that today’s situation is favorable for Detroit Big Three to gain an important increase in both sales and customer trust. Toyota’s last communication problem could help GM, Ford and Chrysler to change its customer perception especially the quality of domestic products by the way to increase national sales.
David Wech has published an article  in Business Week Journal May 31, 2007  discussing the profitability and productivity of Detroit vs Toyota and Honda. When General Motors spent about 32.4 hours to build a car as well Honda, Chrysler was close enough by spending 33 hours in the same circumstances. However, domestic cars produced were as productive as Japanese cars. The difference is that Japanese are using more than 100% of their production capacity to build a car and have low expenses in comparison to Detroit’s Big Three. According to the same General Motors use 93% as well as Honda but Chrysler use only 88%, Ford 77% of its total production capacity.
This situation gives Japanese cars a comparative advantage and let U.S imports from Japan more frequently while domestic cars still in dump, suffering from federal depts and retiree healthcare expenses.