The Role of Foreign Trade and Economic Conditions in India

Foreign trade has got an important place in the economic development of India and the importance of those trades for economic development are:

Ø    First, foreign trade helps a developing country like India in its economic development. Iron and steel industry, has been established due to stored iron-ore and coal. But for the establishment of this type industry, we have to import technical knowledge from foreign countries. Had there been no foreign trade, then it would not have been only difficult but also too expensive.

Ø    Secondly, foreign trade increases the scope of market because of domestic demand and foreign demand for the product. So there is mass production. If the production of goods increases, average cost declines and price of goods declines.

Ø    Thirdly, foreign trade helps the people to get different varieties of goods both in quantities terms and qualitative terms.

Ø     Fourthly, foreign trade helps to produce those commodities which have a comparative cheaper cost than others. It results in less cost of producing a commodity. If all the countries adopt the procedure to produce these goods which they have less comparative cost, it will lead to availability of goods at a lower price.

India benefit greatly from FDI to generate employment and productivity enhancement that encourages the transfer of management skill, intellectual property and technology, increase in tax revenue and increase in exports.

India has been the home to a number of multinational companies since the financial liberalization in 1991, and the number of multinational companies in India has increased noticeably. These multinational companies in India represent a diversified portfolio of companies from different countries. Though the American companies - the majority of the MNC in India, account for about 37% of the turnover of the top 20 firms operating in India, but the scenario has changed a lot off late. More enterprises from European Union like Britain, France, Netherlands, Italy, Germany, Belgium and Finland have moved or outsourced their works to India.

Without foreign trade, it is not possible to fulfill the demand for petroleum products and it will retard the economic development of India. There is also scarcity of consumer goods due to natural calamities or due to any other reason. During the time of scarcity in consumer goods, the governments imports these goods from foreign countries and keep prices stable which help people to get their commodities.

Due to all these above reasons, foreign trade has got an important place in every country.

Sources:

http://business.mapsofindia.com/india-company/multinational.html

http://www.globaljurix.com/foreign-direct-investment-india-fdi.php

http://www.preservearticles.com/201106228393/importance-of-foreign-trade.html

Moran Shipping Agencies, Inc.

Moran Shipping Agencies, Inc. was founded by James F. Moran and began its operations in Providence, Rhode Island since 1937, and can proudly celebrate 75 years of steamship agency excellence in 2012. Today, Moran Shipping Agencies has become the largest independent steamship agency in North America, and could not have achieved this without the support of their loyal and valued clients, superb vendors and dedicated employees who continually strive to give their best each and every day.

Port of Providence

Moran has proven experience in the area of Hub Management, marine expertise, international vessel finance and accounting, and innovative information technology solutions. The company strength is their people...Moran boasts extremely low employee turnover as Managers average over 20 years agency experience with the Company. Moran Shipping Agencies dedicated team represents a diverse and committed skill base, which includes Captains, Mariners, former and active Coast Guard, ship operators, charterers, brokers, inspectors, as well as vetting and maritime security experts.

Moran acquired ownership of Boston based Patterson & Wilde Steamship Agency and full ownership of Kurz-Moran Agencies in New York/New Jersey and Philadelphia. Over the ensuing years and into the 21st century, Moran has continued to opened offices in strategic markets to meet clients’ needs.  With additional locations in Texas, Louisiana, and Florida, and the establishment of Moran-Pacific on the West Coast, the company now has 20 full service offices directly serving over 100 ports in North America.

Corporate Building in Providence

James A. Black (AKA Jim), continues to guide the company as President/CEO through the dramatic industry changes that have occurred this past decade.  These changes in Moran have resulted in significant advances in IT/Communications, Voyage Accounting, and Port Security, offering further advantages and benefits to customers.  Over the past 3 years, Moran have both renovated and built state-of-the-art facilities in Providence and Houston, allowing the flexibility to manage long-term growth and further develop the infrastructure to meet industry’s ever-changing requirements.  Most importantly throughout the 75 years, however, is the partnership formed with each principal during each vessel call and Moran Shipping Agencies’ unwavering commitment to providing the highest standard of agency service and care.

 Source: http://www.moranshipping.com/

The European Union (EU) and its Relationship with developing countries; what are the impacts on trade agreements?

Brief history on the formation of the European Union …The recommendation to form the European Union was made by the then Foreign Minister of France, Robert Schuman in a speech made on May 9, 1950. And since then, May 9 is celebrated as the EU’s birthday.

Presently there are 27 EU member countries and their motto is “United in diversity”.

EU Member Countries and Candidates for Membership

This posting is focused on one of EU member countries, Germany and its involvement with developing countries with regards to Corporate Social Responsibility and developed countries support on free trade policies.  Germany has few raw materials of its own but owes much of its present prosperity to trade. About third of Germany’s GDP is dependent on exports and on average; one job in every four depends on trade.

Over the past five decades the increase in trade flows from Germany has been disproportionately high, and world trade has increased by a factor of seventeen. The current volume of trade in goods and services amounts to over US$ 1 billion per hour. Nevertheless, Germany has a particular interest in changing this situation and enabling developing countries to play a greater part in international trade.  As the second largest trading nation in the world, Germany feels she has a responsibility in this area.  At the same time she realizes that substantial concessions will be required on the part of the industrialized countries.  Presently, there are still far too many trade barriers, either confronting developing countries or in the developing countries themselves, and these barriers need to be removed. Germany managed to ensure that the “Everything but Arms” initiative was successfully adopted as part of EU policy in February 2001. It gives the poorest developing countries completely free market access in the EU for all but a few sensitive products, for which there are interim regulations. As part of the trade round it is also necessary to introduce measures to facilitate trade for the other developing countries, notably trade in textiles and agricultural produce, in which developing countries are particularly competitive. 

http://europa.eu/about-eu/facts-figures/index_en.htm

 Map

Developing countries faced greatest threat of marginalization but not globalization. With such obstacle, developing countries are in urgent need of a trade round that will enable them to further their interests and benefit from the multilateral system.  Associated with a comprehensive development strategy, free trade is an indispensable precondition for prosperity. In addition to the negotiations over agriculture and services, already underway, the traditional trade themes belong on the agenda, particularly the lowering of customs tariffs, the elimination of quotas, the removal of non-tariff obstacles to trade, and anti-dumping.  The successful conclusion of the Doha negotiations confirmed the central role of multilateral liberalizations and rule-making WTO as a powerful shield against protectionist backsliding.

The importance of developing Countries Policies on Trade

Trade is an exchange of goods and services between buyers and sellers, while policy is typically described as a principle or rules to guide decisions and achieved rational outcomes.   So when you combine the two (Trade & Policy) together it describes setting clear standards and goals which can be understood by potential trading nations allowing them to run their businesses smoothly.  But many developing countries have not been able to utilize these concepts because of the deficiencies in their economic stability and structures, societal institutions and infrastructure.  But while these developing countries envelopment remains the principal focus of trade policy, they have become increasingly involved in regional and multilateral trade negotiations among themselves.  Because the multilateral system initiation, there have been substantial adjustments to the increased importance of developing country members’ response on reforms in governance and a shriller distinction between positive and negative approaches to integration seem likely to be needed.

Developed countries have the social responsibility to help developing countries achieve these goals, reason being, their liberalization of trade in services and the mobility of labor which are very important comparative advantage.  With developed countries flexing their regulations, it provides very substantial reductions in the trade policy and other barriers inhibiting developing country participation in world trade.   Developing countries have made dramatic shift in the pattern by shifting away from dependence on commodity exports to much greater reliance on manufactures and services, and greatly increased the importance of exports to other developing countries.  Also, there has been rapid globalization movement in the world in recent decades and the process appeared to hold broad support, but started to receive some resistance and sustained attack in recent years.

It is clear that the task to continue this process have become very much a policy question, and one with enormously important implications.  But one of the important features of the globalization process has been a major shift in the nature of the trading relations between developed and developing countries. This shift from dependence on exports of commodities to much greater reliance on exports of manufactures and services is sufficiently noticeable as to require reconsidering of old approaches to viewing trade and development as in export-led growth. It has also placed major pressures for change on the multilateral trading system as developing countries have become much more active participants.  Developing countries have to seriously get in the practice of the “Flying Geese” pattern of growth by gradually moving up in technological growth and emulating countries that are ahead of them in this process.