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Global Trade

  • The Impact of the Wood Industry on Global Trade

    Veneers, plywood, timber. Look around your home and office and you will find much of what surrounds you is made of wood. From the desk that takes up your workspace to the framework supporting your walls, the wood products used provide an important element to your existence. Around the world, many economies rely on the timber industry to maintain strong supply chains - the companies who cut and refine the timber for distribution, the manufacturers who build the product, and the retailers who sell the finished work.

    The state of the wood industry may vary according to the economy. In the United States, for example, the National Wood Flooring Association indicated that their branch suffered in conjunction with a decline in housing and construction. An economic rebound, naturally, should bring improvement. Sales of wood are often dependent upon other facets of a country's economic health, specifically real estate and commercial growth. When both are strong, consumers are more likely to spend money for new products.

    Quick Facts About the Wood/Timber Industry

    According to the Food and Agriculture Organization of the United Nations:

    • The forestry industry grossed approximately $160 billion internationally. That number is expected to double by the end of the decade.
    • Illegal logging is a major concern. It is estimated that countries lose several hundred billions of dollars a year as a result.
    • Over 13 million people work in the timber industry globally, and produce over 120 million cubic feet of wood for commercial use.

    Major Exporters of Timber/Wood Products

    Top global wood exporters vary according to product and type of wood. They include:

    • China - A leader in manufacturing, China imports raw wood primarily from Russia and exports finished product around the world, over a trillion dollars annually combined with other exports.
    • Canada - Known for its lush forests, Canada relies heavily on the timber industry but also practices sustainability in order to keep the trees growing. Where the United States was once a primary trade partner, China recently surpassed the US as top importer and helped the country create more jobs.
    • Russia - Russia exports close to a billion dollars' worth of softwood annually to Europe and China.

    Major Importers of Timber/Wood Products

    Many importers take raw wood in order to manufacture and sell domestically or abroad. They include:

    • The United States - The US imports timber from Canada, mainly softwood, and products from China.
    • Japan - With reconstruction still underway in the country following recent disasters, Japan continues to import wood for construction. Canada is one major exporter to the country.
    • Mexico - Mexico brings in more than half of its timber exports from Chile.

    The Future of the Industry

    Naturally, a major concern in the timber industry is the supply of natural resources. Trees, unfortunately, do not grow as quickly as they are cut, therefore companies continue to look into sustainability programs to take the industry into the future. In the United States, for example, companies look to softwood from younger trees as a means of meeting demand. In developing nations like Ghana, companies have met with opposition from farmers who object to growing timber and in turn depleting other resources. One must also factor natural obstacles like weather and disease to determine the future of this industry.

    As global economy improves, so will the demand for wood materials. How well the individual businesses tied to the industry do depend on solid product.

  • The Trade and Investment Framework Agreement – Creating Important Free Trade Pacts for the US

    Where the standard Free Trade Agreement, or FTA, creates a trade bloc within multiple countries that eliminates tariffs and import quotas between borders, preliminary measures like the TIFA work to expand that bloc's trade activity to include outside nations. Connections with larger economies like the United States can prove beneficial for specific FTA countries that rely on export income to boost low GDPs, and over the past few decades the US has come to agreement with various countries and groups.

    The TIFA, or Trade and Investment Framework Agreement, is exactly what the name implies - it sets the groundwork for the involved countries to come to terms that allow all parties to trade with ease. A TIFA may also serve as sort of a peace treaty in that disputes over import/export issues are resolved, which promotes an ongoing civil relationship. Presently, the United States has such agreements in place with four trade blocs in South America, Africa, and Asia:

    • ASEAN - The ASEAN treaty connects many of the lesser economies in Southeast Asia, including Laos and Myanmar, Indonesia, Cambodia, and Vietnam. While this FTA has been in effect for nearly half a century, it wasn't until recently that the United States took an active involvement in forging solid trade ties. Together, the ten ASEAN nations comprise one of the largest markets importing American goods.
    • CARICOM - This bloc comprises nearly the entire population of the Caribbean, including member nations Jamaica and Haiti, Antigua and Barbuda, Barbados, and Trinidad and Tobago. As recent as early 2012, the United States and the fifteen CARICOM have enjoyed a profitable relationship, with a forty percent increase in bilateral trade. This current TIFA is said to serve as a precursor to the CARICOM nations joining NAFTA, though no plans are solidified.
    • COMESA - The Common Market for Eastern and Southern Africa unifies much of the continent through low to zero tariffs and political stability. Though the majority of America goods traded to this bloc go to Egypt, the United States does deal with several countries for crude oil, textiles and apparel, and coffee and tea.
    • EAC - The United States presently exports an average of $1 billion in goods to the East African Community - comprised of Burundi, Kenya, Rwanda, Tanzania, and Uganda). This current trade relationship is designed to forge better relations in East Africa and improve American standing in their regional businesses.

    In addition to these arrangements with larger blocs, agreements between the United States and individual nations have helped decrease trade deficits throughout the world. Current TIFAs recognized by the US include:

    • Africa - Angola, Ghana, Liberia, Mauritius, Mozambique, Nigeria, Rwanda, South Africa, and the West African Economic and Monetary Union (WAEMU)
    • The Americas - Uruguay
    • Europe and the Middle East - Algeria, Bahrain, Egypt, Georgia, Iceland, Iraq, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, Switzerland, Tunisia, Turkey, Ukraine, United Arab Emirates, Yemen
    • South and Central Asia - Afghanistan, Nepal, Pakistan, Sri Lanka, and the Central Asian TIFA (Kazakhstan, Kyrgyzstan, Tajikstan, Turkmenistan, Uzbekistan)
    • Southeast Asia and the Pacific - Brunei, Cambodia, Indonesia, Malaysia, New Zealand, Philippines, Thailand, Taiwan, and Vietnam

    As the United States continues to forge trade relations with other parts of the world for mutual economic benefit, the country stands to gain more importance on the global stage. Foreign investment in American interests present our country with opportunities to strengthen our economy and civil political relations around the world.

  • The EEA and EUCZ - Connecting Europe in Trade

    When one reads news of the European Union, it is important that note that not all European countries are part of the EU. Norway, Iceland, and Switzerland are three notable examples of countries without membership, though this doesn't necessarily mean that these nations are not involved in trade relations with EU members. Changes in the European landscape have brought new nations into the EU over the years, and negotiations with members and non-members work to ensure fair trade agreements for all involved.

    The European Economic Area agreement that connects three members of the European Free Trade Association (EFTA) to the European Union was established in 1994 for the purpose of allowing all countries involved to freely trade products and services. The EFTA states are treated as a single market, or "Internal Market," and while they work with the rest of Europe to promote continental tourism and environmental issues they do not utilize the Euro or observe certain policies involving agricultural trade.


    The EFTA member states affected by the tenets of the EEA include:

    Iceland: Given the nation's geographical location and isolation from the continent, Icelanders rely heavily on the export of fish and fish products.  While more than half of overall exports come from the fisheries, Iceland also produces manufactured aluminum to ship to major trade partners. Less than five percent of their output is traded beyond Europe.

    Liechtenstein: While a geographically small country, Liechtenstein exports approximately $3 billion in goods annually, apart from their economic alliance with Switzerland. Machinery and audio/video components are major exports.

    Norway: Like its Scandinavian neighbors, Norway's export industry centers primarily on maritime products and natural resources - shipbuilding, seafood, and petroleum. Like Iceland, a small percentage of trade is exported outside of Europe.

    While Switzerland is also a member of the EFTA, the country is not part of the European Economic Area agreement. This country has an agreement with EU nations unique to the EEA.

    Involvement of the EUCZ

    Independent of activities with the EFTA, the European Union Customs Union holds that tariffs on goods traded across EU borders - and specific nations signed to the agreement - are levied. During international trade negotiations , this union allows the EU to act as a single entity.

    The European Union Customs Union is comprised of all EU members and the following nations:

    Andorra: Andorra relies more upon tourism than trade to maintain a stable economy. What they do offer to export - tobacco, for one - is traded almost exclusively to France and Spain.

    San Marino: San Marino has perhaps one of the most unusual but sought-after exports - commemorative stamps and coins, which contribute to their booming tourism.

    Monaco:  Known more as a luxurious tourist destination on the French Riviera, this principality relies solely on tourism and its status as a tax haven to generate income.

    Turkey: Turkish textiles and apparel are coveted globally, as are exotic foodstuffs. The largest economy of the four non-EU members in this agreement, Turkey trades exports primarily with Western Europe nations.

    As non-member nations join the EU, they will also apply to join the EEA agreement and in turn fall under the policies of the customs union. With only a handful of countries left - the majority of them located in Eastern Europe - time will tell how new members benefit from inclusion.

  • The Central European Free Trade Agreement – Does It Remain Relevant?

    To look at a series of maps highlighting of the history of the Central European Free Trade Agreement, one will be amazed to see how the landscape has drastically changed in the last decade. Founding members of the FTA have long since left the union, while lesser Balkan states comprise the bulk of the trade zone. Economical changes in Europe have had a great effect on CEFTA and how it operates, which may led some to speculate if this agreement will remain valid in the near future, or else become absorbed into the European Union.


    CEFTA has its roots in an agreement finalized in 1992 that created a free trade area between Poland, Hungary, and what was then known as Czechoslovakia, which split into the Czech Republic and Slovokia by the time CEFTA went into effect two years later. The original intent of CEFTA served to assist these countries in not only taking advantage of tariff-free trade with each other, but to become better integrated with markets in Western Europe and eventually operate with them as equals. One can say that CEFTA served as a base to prepare these economies for inclusion in the European Union.

    While CEFTA admitted new member nations over the years - namely Slovenia, Romania, Bulgaria, Croatia, and Macedonia - others took their leave over time to join the European Union. In 2004, the founding nations left the treaty for the EU, and others have since followed suit. Presently, CEFTA is comprised of the following:

    • Albania - Albania is a prime exporter of textiles and footwear in Eastern Europe. More than half their output is traded to Italy, which is also their main import partner.
    • Bosnia and Herzegovina - Aluminum, wool, and steel comprise the bulk of this area's export trade. CEFTA member Croatia counts among the area's more frequent trade partners.
    • Croatia - While Croatia is perhaps the most advanced nation to come out of Yugoslavia, a good amount of their export product is agrarian - lumber, grains, and other foods.
    • Kosovo - Kosovo is primarily a mining economy, and as such exports metals to trade partners, of whom Macedonia is the most frequent.
    • Macedonia - Once the poorest province of Yugoslavia, Macedonia has enjoyed a steady increase in GDP in recent years. The nation relies upon machinery and industrial imports from European trade partners and exports a variety of foodstuff to CEFTA neighbors.
    • Moldova -While one of the poorer nations in CEFTA, Moldova maintains their GDP with help from their active wine production. As one of the top thirty wine producers in the world, Moldova exports the bulk of their output throughout Europe.
    • Montenegro - Agricultural output - foodstuffs and raw materials - make up the bulk of this nation's export product. Switzerland is a prime trade partner.
    • Serbia - The bulk of Serbian exports - which consist of iron and metals - are traded exclusively throughout Europe, with nearly a third going to CEFTA members.

    In 2013, Crotia will join the European Union and likely withdraw from CEFTA. Other nations within this agreement have also begun preparations for EU candidacy, which may lead some to believe that CEFTA may go the way of another agreement, the Baltic Free Trade Area (BAFTA) as members defect. In truth, these secessions are not likely to threaten the future of CEFTA, as the agreement may still welcome other nations in Eastern Europe. As of 2012, Belarus and Ukraine, for example, are members of neither union, and that could change.

    CEFTA serves as a valuable springboard for lesser Eastern economies seeking union and trade benefits with Western nations in Europe. So long as these countries require preparation, CEFTA will remain relevant.

  • The African Free Trade Zone Agreement – Uniting the Continent Through Trade

    Within the African Union of fifty-four sovereign states exists a free trade zone that encompasses nearly half of the countries, one designed to improve individual economies and give support to eradicated tariffs and common currency. Plans for an African Free Trade Zone (AFTZ) began as early as 2008, yet progression toward goals set forth in the agreement have are recently coming to fruition. According to the Christian Science Monitor, this trade zone is expected to affect more than half a billion people and generate a trillion dollars in economic output.


    Taking a cue from similar agreements incorporated in the European Union and North America, the primary goal of AFTZ is to create flexible borders within Africa. Because many of the countries involved in this agreement maintain low economies - a recent editorial in Forbes points out that some countries' GDPs are lower than those of some cities in Europe - the abolition of customs fees and a proposed common currency like the Euro stands to benefit everyone involved. While installation of a common franc is not expected for another decade, the twenty-six countries in the AFTZ may still take advantage of improved trade relations.

    The AFTZ is presently comprised of nations from the following trade blocs:


    The Common Market for Eastern and Southern Africa has worked in various incarnations for nearly fifty years to promote political and economic stability among member nations. Of the three blocs comprising AFTZ, COMESA is the largest with nineteen members: Burundi, The Comoros, Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe.


    The East African Community has endured a tumultuous history, having been dissolved thirty years ago and revived in 2000. The EAC has since worked to evolve its five members (Burundi, Kenya, Rwanda, Tanzania, and Uganda) into a single state which would allow residents a common passport and currency. More recently, the EAC is preparing to admit South Sudan into membership.


    The Southern African Development Community was formally established more than thirty years ago and has worked to maintain good relations between neighboring nations in the southern region of the continent. While challenges such as livestock disease and civil war have threatened the overall economy of the area, the union has worked to overcome obstacles. Members of SADC include Angola, Botswana, Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, the Seychelles, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe.

    Economic critics have praised the formation of the AFTZ as a means of improving individual economies and perhaps forging new relationships outside the zone. Presently, less than ten percent of trade occurs between AFTZ nations. If the trade blocs expect to achieve their trade liberalization goals, these nations must focus more on communication and trade with each other. Given the low GDPs of various member nations, the relief from tariffs is one way to preserve income and invest toward a brighter future.

  • The EFTA-SACU Agreement – Connecting Countries Through Trade

    Free trade agreements are typically established between countries that share various demographics in common - most notably proximity. Countries that enter into treaties with neighboring countries demonstrate their willingness to remove tariffs on goods that cross borders, and in turn the respective governments attempt to reconcile political and other differences through cooperative trade. When countries firmly established in one FTA work toward expanding the agreement to include other nations, the opportunity for improvement in economy increases.


    The European Free Trade Association (EFTA), founded in 1960, consists of four small countries that nonetheless have proven important in various trade sectors, in particular banking and finance.  Their association with the Southern African Customs Union (SACU) in a treaty finalized in 2008 signifies an agreement designed to benefit both regions as customs are eliminated on imports to Europe and Africa. SACU countries receive ample supplies of medicine and machinery to aid improvement in their industrial sectors, while the EFTA nations may import needed precious metals and natural resources more commonly found in Africa.

    The EFTA is comprised of:

    • Iceland - Iceland's small economy does exceed that of some SACU nations. Their somewhat isolated location in Northern Europe makes trade practically a necessity, and for their part Iceland exports fish and byproducts and select minerals.
    • Liechtenstein - Liechtenstein's prosperous economy may stem from low taxes and ease of incorporation. The nation's primary exports include machinery, audio and video components, and electronics.
    • Norway - Foreigners may associate Norway mainly with the fishing industry. While fish is a prime export, the country also trades out petroleum and machinery.
    • Switzerland - The world is familiar with Swiss chocolate and precision Swiss watches and clocks, but this only scratches the surface of their main exports, which also include pharmaceuticals and electronics.

    SACU is comprised of:

    • Botswana - Botswana has enjoyed progressive economic growth in the last three decades, well before the EFTA-SACU agreement. Precious gems and metals - diamonds, coppers, and nickel - represent the bulk of the country's exports.
    • Lesotho - Since finalization of the joint agreement, about one fifth of all the country's exports - textiles and diamonds - are sent to EFTA nations while the rest are exported to SACU partners and the United States.
    • Namibia - Namibia is a nation rich in precious gems and metals, including diamonds, copper, gold and zinc. Despite these major exports, mining represents a very small fraction of overall employment.
    • South Africa - Perhaps the largest economy among SACU nations, South Africa is the world's largest producer of platinum and gold.
    • Swaziland - Mining plays an important role in this nation's economy, though resources have depleted over time. Swaziland relies mainly on wood and sugar to export.

    Since coming to an agreement in 2008, the nations of EFTA and SACU have noted an increase in value of their respective trade merchandise. In 2010, nearly $3 billion worth of goods traded between member nations, and future endeavors hope for steady growth.  Recent meetings between EFTA and outside nations, including India and Indonesia, may also bode well for SACU nations if there is an opportunity to expand on trade through their association with Europe.

  • The South Asian Free Trade Area and Development of Trade in the Third World

    The purpose of the South Asian Free Trade Area (SAFTA) agreement is not only to encourage economic development of many poor countries in this region, but to help eliminate tariffs among member nations and create a free-trade bloc. With the signing of SAFTA in 2004 and a gradual formation of the current membership over the next eight years, the goal for reduced customs all around is set for 2016.


    Member nations of SAFTA include:

    • Afghanistan - Afghanistan is the most recent member nation in this trade agreement, having officially entered SAFTA in 2011 following approval a few years prior. Among SAFTA nations, Pakistan and India rank among their most common trade partners, with natural gas and dried fruit serving as their primary exports.
    • Bangladesh - Seeing the need to unite lesser South Asian economies for mutual benefit, Bangladesh spearheaded the establishment of the South Asian Association for Regional Cooperation (SAARC) in 1985. From this organization came the roots of SAFTA, which allows Bangladesh to export apparel and jute fibers to partner nations at low tariff costs.
    • Bhutan - Bhutan has enjoyed a long history of trade with India, and since its inclusion in SAFTA the country has seen imports and exports elsewhere steadily increase. Bhutan primarily exports hydroelectricity, timber, and coal.
    • India -Prior to inclusion in SAFTA with Pakistan, India has engaged in several wars and conflicts with the largely Islamic nation. Presently, India continues to experience roadblocks with Pakistan, only on an economic level, as the latter nation allegedly has stifled trade. Nonetheless, India remains arguably one of the greater economies in SAFTA and is ranked among top nations overall.
    • Maldives - Primary exports from the Maldives include food and livestock, various machinery, and crude materials. Association with SAFTA hopes to improve exports to member nations and build Maldivian economy.
    • Nepal - As one of the poorer global economies, Nepal may stand to benefit from a free trade agreement. However, Nepalese businessmen have opined that the country may benefit more from focused trade with India rather than other member nations. Presently, the country imports more goods from India than anywhere else, but exports mainly to non-SAFTA countries.
    • Pakistan - As recently as 2011, Pakistan has made an effort to reduce the number of sensitive goods for which there remain tariffs. Pakistan's main exports include textiles, carpets, and rice.
    • Sri Lanka - Sri Lankan business experts have also had doubts about SAFTA, citing concerns about businesses moving to other countries due to various issues with inflation and proper business development. Nonetheless, the country continues to grow economically and is a prime exports in South Asia of textiles, tea, and spices.

    A significant reduction in tariffs with treaty partners typically seeks to benefit all nations involved in an FTA, though internal conflicts and concerns have left business experts in certain countries somewhat skeptical of SAFTA. Time will tell if a full reduction in customs duties can stimulate growth for this region of South Asia, and if other countries take notice.

  • ASEAN and Economic Progress in Southeast Asia

    Similar to the structure and practice of the European Union, the organization known as ASEAN (the Association of Southeast Asian Nations) has worked for decades to encourage cultural and economic development among the lesser nations in this region, as well as forge fair free trade agreements with neighboring countries. Moreover, a commitment to international peace and prosperity remains a goal as emphasized by recent statements from ASEAN, as the countries look toward improvement in the next decade.


    About the ASEAN Nations

    Membership in ASEAN has expanded since its inception in 1967 to include ten Southeast Asian countries:

    • Brunei - As one of the more oil-rich nations in the regions, Brunei has grown economically in the last decade. Despite periodic dips in the GDP over the last years, Brunei remains one of the top oil producers in Asia.
    • Cambodia - While one of the poorer nations of ASEAN, Cambodia benefits from strong agricultural production, especially rice, and growth in labor industries like construction.
    • Indonesia - In the last few years, Indonesia has enjoyed a steady decrease in inflation coupled with growth in their GDP. The majority of their exports come from oil and byproducts.
    • Laos - The only totally landlocked nation among ASEAN members, Laos also has one of the poorest economies. As such, they are very dependent on foreign aid.
    • Malaysia - Malaysia is one of the larger nations in ASEAN in terms of economy and GDP. A long standing status as a prime trade nation continues to this day.
    • Mynamar - Also known as Burma, this nation is challenged by economic sanctions and various financial problems. Nonetheless, they have shown slight growth in the last few years.
    • Philippines - This island nation is primarily a service industry, known for assembly of products shipped throughout the world.  GDP growth has been steady but slowing in recent years.
    • Singapore - In 2010, Singapore claimed the fastest growing economy, due in part to their status as a banking power in Asia and prominent trade hub.
    • Thailand - Natural disasters, in particular the recent flooding of the area, have challenged the Thai economy, but growth is nonetheless projected for the industrial sector at a rate of 4-5%.
    • Vietnam - Recent plans for economic reform in Vietnam  designed to combat challenges brought on by decreased foreign exchange reserves and dependency on foreign aid.


    ASEAN +3

    It is significant to note that while the prominent trade powers of Asia - namely China, Japan, and South Korea - are not ASEAN members, each is involved in a free trade agreement with ASEAN and are known as the Plus Three.  These treaties have proven beneficial to the lesser economies in that billions of dollars in direct investment (almost $15 billion US in 2010) is invested here by the Plus Three countries.

    The union of ASEAN +3 has also proven to improve political relations between nations in the region, particularly those with concerns of becoming marginalized. China's presence in ASEAN, for example, and subsequent positive inroads with member nations is believed to have helped improved relations elsewhere. China's 2010 trade agreement with Taiwan, the Economic Cooperation Framework Agreement (ECFA) is arguably one result of participation in ASEAN.

    China, Japan, and South Korea in turn benefit by using the ASEAN nations as a collective conduit of trade with each other . These three countries presently do not have trade agreements with one or two of the other three, so the relationships with ASEAN may help forge inroads in trade.

    The Future of ASEAN

    ASEAN Vision 2020, as established by the organization around 1997, set goals to improve peaceful relations not only between member nations but outside countries. The commitment to allow member nations to handle internal affairs without the threat of outside force or other interference will hopefully permit economic and cultural growth. Associations with other nations in free trade agreements, notably the AANZFTA treaty with Australia and New Zealand, seek to benefit those members with lesser GDPs.

    With recent problems related to the weather and natural disasters, ASEAN has in recent years also sought to place environmental concerns at the forefront of discussion. Attempts to control haze pollution, for one, may hopefully transfer to additional economic health, especially when the ASEAN nations collectively bid on a future FIFA World Cup. What success comes of this endeavor will surely demonstrate the influence and power ASEAN possesses as an organization.

  • The AANZFTA Treaty – Development of Trade and Relations Throughout Southeast Asia

    For a number of island nations, the perceived notion of isolation implies that trade with other nations can prove challenging. In Southeast Asia, for example, resident nations have come to rely upon each other for goods, therefore it stands to reason that a trade agreement can benefit all involved. Nearly fifty years ago, the Association of Southeast Asian Nations was formed to improve the overall economic health of the region through joint participation in trade and development. Only recently have the ASEAN nations come together to expand relations with larger economies, namely Australia and New Zealand.


    In early 2010, the ASEAN, Australia, New Zealand Free Trade Agreement was ratified by the following nations:

    • Australia - Australia is perhaps one of the largest countries in the southern hemisphere where mining is a primary industry. This nation exports coal and iron ores, in addition to livestock and beef. Their proximity to China and Japan afford these nations status as important trade partners.

    • Brunei Darussalam - An oil-rich nation, oil and natural gas rank among the country's largest export commodities. Japan, Indonesia, and Australia benefit from Brunei's petroleum production, which is one of the highest in the world.

    • Malaysia - One of Malaysia's top industries, computers and electronics, accounts for a good percentage of exports to the United States. The country also trades a variety of products with treaty partners Singapore and Thailand, including wood and petroleum and rubber.

    • Myanmar - Of the AANZFTA nations, Myanmar (Burma) has one of the smallest economies. The country relies heavily on trade with treaty partners, including Thailand, and exports mainly natural gas and wood products, seafood and rice.

    • New Zealand - New Zealand trades primarily with Australia, imports and exports. Largely agricultural in terms of outgoing commodities, New Zealand exports an average of $26 billion in dairy, meat, and fish.

    • The Philippines - This island nation maintains good trade relations with several countries, including the United States and Japan. Copper, electronics, and textiles are among the products exported.

    • Singapore - Like fellow AANZFTA members, Singapore also exports computers and accessories, and some petroleum products. Most of their trade, with the exception of the United States, is concentrated in Southeast Asia.

    • Vietnam - Vietnam is known for textile production, especially shoes and related athletic clothing. The country also exports some oil, wood products, and rice.

    Subsequent entries into AANZFTA since the initial establishment have included:
    • Cambodia - Following years of internal conflict, Cambodia has worked in the early 21st century to improve trade. Agricultural commodities like timber, rubber, and seafood are popular exports, especially to the United States.

    • Indonesia - Most of Indonesia's outgoing trade is concentrated in Southeast Asia, with trade partners receiving the country's supply of natural gas, rubber, and textiles.

    • Laos - Laos produces timber products, coffee, and textiles to major export partners, which include AANZFTA members Thailand and Vietnam.

    • Thailand - While tourism is a major income generator for Thailand, the country ranks as a top exporter of rice. Other exports include fish and seafood, and textiles.

    Goals of the treaty, aside from improving economies and trade across member borders, include protection of intellectual property and eCommerce interests. As we move deeper into the digital age, such concerns have become important as technology comes to the region. This may prove essential in 2015, when a proposed ASEAN Economic Community is established. This community is designed to unify the ASEAN nations involved in this trade agreement and create a single market and production base to meet the growing needs of member nations. A unified economy is also important in improving relations with outside economic powers.

    With AANZFTA in force, the practice of lower tariffs in trade among member nations should assist those countries with smaller GDPs in obtaining needed goods and improving internal production. Modernization of business practices and the hope of extending relations beyond Southeast Asia may also benefit these smaller economies and eventually reduce the isolation of this region.


  • The APTA Agreement – Economic Development in the Pacific

    While the Asia-Pacific Trade Agreement has existed in this incarnation for less than a decade, the trade agreement has roots in the earlier Bangkok Agreement, finalized in 1975 as a means of increasing intra-regional trade among nations in the region. The APTA treaty emerged from initiatives set by the United Nations Economic and Social Commission for Asia and the Pacific, or ESCAP, and presently seeks to unite all regions of Asia in economic cooperation.


    Presently eight nations comprise the treaty, with plans to engage other Asian countries into dialogue, that they may also accede into the agreement. Current members of APTA include:

    • Bangladesh - Of the nation's major exports, fabric and apparel and jute are among the most popular. Jute, a vegetable fiber used in the making of fabric, rope, and similar items, is one of the country's largest crops and as such Bangladesh is one of the world's top producers of jute.

    • China - China boasts of the largest economies in the world and is also a top exporter of goods. Nearly one-fifth of exported electronics, machinery, and clothing are sent to the United States alone.

    • India - Many these days associate India with the growing industry of outsourced labor. In addition to handling call centers and customer service for various countries, India exports textiles, leather, and medical equipment.

    • Korea - In recent decades, Korea has become known for their automobile exports - namely from Kia and Hyundai. Other popular exports include computer components and electronic equipment.

    • Lao People's Democratic Republic - Also known as Laos, this country has one of the smaller overall GDPs of the treaty nations. Laos relies upon natural resources like coffee and precious metals - gold and copper in particular - to satisfy export income.

    • Sri Lanka - Sri Lanka has enjoyed growth in the agricultural sector in recent years, with tea, rubber, and coconuts among their better known exports.

    • Nepal - On average, Nepal brings in under one billion dollars income annually from exports, making it one of the lesser economies among APTA nations. Carpets and apparel, jute byproducts and herbs comprise their more sought-after exports.

    • The Philippines - Outside of China, the Phillippines are a major trade partner with the United States in this region. Electronics and copper, and tropical fruits and byproducts are some of the top products exported.

    According to UNESCAP, APTA has the distinction of being the only active trade agreement to connect China and India, two of the largest populated countries in Asia, if not the Eastern Hemisphere. Presently APTA seeks to court neighboring countries Mongolia, Malaysia, Indonesia, Pakistan, and Papua New Guinea into the treaty. As trade continues to grow in the Pacific rim, the goal of APTA will hopefully allow for tariff concessions between member nations and assist those with lower GDPs, and in turn improve political relations between countries.

  • GAFTA – Improving Trade Relations Among Arab Nations

    The American perception of Arab nations as a whole may be colored by media reports of unrest of conflicts. We turn on the news to watch revolutions unfold and troops trade fire, nonetheless the Greater Arab Free Trade Area remains intact. Recent summits held for the discussion of economies in the Arab regions, however, suggest that this trade zone has become irrelevant. The UAE Daily News reported in 2008 that the belief that Arab countries should unify as a bloc in dealing with the rest of the world. By learning from the examples set forth by the European Union, it is believed such a move could better boost trade among Arab nations.

    Members of GAFTA, fourteen of which have been involved in the agreement since its inception in 1998, include:

    • Algeria - A recent addition to the treaty (Algeria was admitted in 2009), this country exports mainly petroleum and natural gas and their byproducts to the US and Europe.
    • Bahrain - After oil, aluminum and banking concerns make up the majority of Bahrain's exports. Recent internal conflicts have put the country's status as a financial power in the Gulf at risk.
    • Egypt - Egyptian cotton and cotton apparel are coveted around the world. Outside of the free trade zone, the country exports goods to the United States, Italy, and France.
    • Iraq - Like other nations in this region, oil is the primary export, which is traded to the United States, India, and Italy among other nations in exchange for food and medicine.
    • Jordan - One of the larger economies in the region, Jordan maintains FTAs with countries throughout the world. Phosphates and pharmaceuticals are prime exports to India and Iraq, while they tend to rely on neighboring countries for oil.
    • Kuwait - The majority of Kuwait's oil exports are transported to Asia, with Japan and South Korea taking nearly a quarter of all goods. Kuwait is also known for their production of fertilizers and construction materials.
    • Lebanon - Lebanon claims one of the less economies among this group, and relies heavily on imports from Syria, France, the United States and others. What precious metals and chemicals they can export go mainly to Syria and UAE.
    • Libya - Italy is one of Libya's major markets for crude oil and related products. Though Libya maintains agricultural resources, they import the majority of foodstuffs from Europe and Asia.
    • Morocco - Moroccan textiles and phosphates are popular in Europe, particularly Spain and France. The country also relies upon their fishing industry and electronics.
    • Oman - This oil rich nation relies upon their natural resources to export crude to the UAE, Saudi Arabia, and Iran.
    • Palestine - Palestine relies on their agricultural sector - citrus fruits, olives, and vegetables for exports to their trade partners.
    • Qatar - Natural gas and petroleum products make up the majority of their export commodities, more than a quarter of which are sent to Japan.
    • Saudi Arabia - The Saudi oil-based economy accounts for nearly $250 billion in export revenue, which comes from trade partners the United States, Japan, and South Korea.
    • Sudan - Sudan's recent issues with tariff barriers have caused a number of problems with trade. Crude oil is a primary export, though Economy Watch has reported the nation suffers a trade deficit close to $6 billion.
    • Syria - Crude oil and petroleum comprise the majority of the country's exports, which are sent to Iraq (more than a quarter of all goods) and Lebanon.
    • Tunis - Tunisian textiles and apparel and agricultural goods are popular in Europe, where France, Germany, and Italy receive the majority of exports.
    • United Arab Emirates - Much of the UAE's oil exports are shipped to Japan and India. Thanks to their rich resources, the UAE is ranked third among Middle Eastern nations for GDP.
    • Yemen - Depletion of oil fields has threatened Yemen's export income. Until a solution is found, the country also relies on their fishing industry to trade with Asia.
    In 2009, the Gulf Daily News reported that member nations took the first steps toward creating a common market, which is expected to see fruition in the next decade. Whether or not GAFTA will remain relevant by then remains to be seen, but those countries that rely upon the Arab nations for oil and other commodities will definitely want to monitor their progress.
  • CISFTA – Free Trade Within the Russian Union

    The early 1990s saw drastic changes in global politics, trade, and geography in Europe and parts of Asia. With the dissolution of the Soviet Union, numerous independent states became recognized, and many would form an association of sorts to promote trade and financial support with each other and outside nations. The Commonwealth of Independent States, formed for the purpose of maintaining friendly relations among former Soviet territories, sought to create free trade boundaries with member nations, though this agreement was never officially ratified. Only recently have CIS nations consented to a formal trade agreement which will impact all members involved, in particular the Ukraine, which also seeks a relationship with the European Union.


    CISFTA Member Nations

    Officially, only eight nations within the Commonwealth of Independent States are involved in the current free trade agreement:

    • Russia - Within the CIS, the Ukraine and Belarus are Russia's major trade partners. Known for its mining and agricultural industries, Russia exports iron ore and precious metals, as well as various machinery.

    • Ukraine - Ukraine is a major producer of coke and coal, and exports a good percentage of their petroleum and chemical output to Russia, the United States, and Germany.

    • Belarus - Largely industrial, Belarus relies on trade relations with Russia and the Netherlands as they export vehicles and machinery.

    • Kazakhstan - A smaller economy within the CIS, Kazakhstan produces on average 65-70 million tons of oil and gas condensate annually.

    • Kyrgyzstan - Kyrgyzstan encountered difficulties economically following the dissolution of the Soviet Union, but continue to grow slowly. Main exports include precious metals and hydropower.

    • Tajikistan - Turkey and Russia are major exports partners and benefit from Tajikstan's production of aluminum and cotton, among other agricultural crops.

    • Moldova - Moldova has struggled post-dissolution to establish a foothold in global trade beyond Russian borders, but has managed to export food and textiles to Turkey, Romania, and Germany.

    • Armenia - Metals and mineral mining are prime industries in Armenia. Russia, Bulgaria, and Germany are among their top trading partners.

    Current Issues Within CISFTA

    Foremost in the media regarding the CISFTA agreement is Ukraine's role and the effect, if any, it will have on relations with the European Union. While Ukraine's involvement in CISFTA should not negatively impact the deep and comprehensive free trade agreement with the EU, it should be noted that both treaties are important to the country. According to OdessaTalk, the bulk of Ukraine's trade, little over forty percent, is concentrated within the CIS borders. Trade with European Union members holds just under thirty percent, but could have the potential to grow. Should this potential be realized, one may find other member nations of CISFTA taking advantage of such a relationship.

    Compatibility of CIS nations with the procedures of non-member nations is key in forging successful trade relationships beyond the old Soviet borders. It is worth watching Ukraine closely to see if others in CISFTA follow suit.

  • CEMAC - Promoting the Resources of Central Africa

    The continent of Africa is perhaps the most diverse landscape on the planet in terms of natural resources and inhabitants. The Western perspective of Africa is likely so colored by media reports of internal unrest, drought, and poverty that one might be surprised to learn that some countries import and export billions of dollars' worth of goods annually. Indeed, among the nations that comprise the Economic and Monetary Community of Central Africa, there thrive a number of economies working together toward common goals to improve the region.


    CEMAC has its roots in the Brazzaville Treaty ratified in 1966, which established the free trade area and eventually formed a common currency, the Central African Franc (French is one of the primary languages in the region). A little over a decade ago, the tenets of the CEMAC agreements took over the original treaty.

    The six member nations of the CEMAC trade agreement include:

    • Cameroon - Since gaining independence over fifty years ago, Cameroon has seen a steady increase in its GDP. While fishing is a large industry, the nation's exports are mainly comprised of petroleum and lumber and select crops.

    • Central African Republic - This landlocked nation relies primarily on agricultural industries to maintain its GDP. Main export crops include tobacco, coffee, and cotton, with nearly half of the goods traded to Japan.

    • Congo - The Republic of the Congo is comprised mainly of rain forests that support their timber industry, though petroleum exports play a sizable role in their export output.

    • Gabon - Rich in oil fields, Gabon exports several billion dollars' worth of petroleum product to main trade partners Russia, the United States, and China annually.

    • Equatorial Guinea - This nation is somewhat new to oil mining, with reserves discovered in the last fifteen years. Oil production has helped raise Equatorial Guinea's profile and GDP, though forestry and agricultural industries are also important to the economy.

    • Chad - Another oil-rich nation, the bulk of Chad's exports are traded to the United States, which has a large presence in the Republic via Exxon Mobil.

    Within this Central African community, goals include the establishment and growth of a common market to benefit member nations, continued stability of the CFA Franc, and harmonic political and social relations. Other goals set at the establishment of CEMAC, such as the elimination of tariffs within member nations' borders, however, have yet to be realized. Possible reasons for the delay may include unstable political conditions or external issues that downplay the CEMAC nations' merits and promotional endeavors. It is possible with the establishment of ECCAS (the Economic Community of Central African States), which will succeed the CEMAC treaty, these countries will see long-term goals come to fruition.

    At present, the region's overall GDP experiences a growth rate around four percent that may increase as demands on prized resources increases. Growth projection for 2012 sets the region at six percent, dismissing rumors of a devalued currency. One can hope this fortune is felt beyond this region's borders.

  • The SPARTECA Trade Agreement – Unrestricted Trade Access to the Pacific Islands

    People in the Western Hemisphere may consider Australia and New Zealand more as tourist destinations than viable, exporting trade partners. While it's true Australia alone enjoyed an increase in foreign visitors in the last year, one cannot rule out their contribution to the global economy. This isolated country/continent is ranked among the top twenty national economies and has entered numerous free trade agreements with countries close to home and on the other side of the world. Australia's involvement in the South Pacific Regional Trade and Economic Co-Operation Agreement, or SPARTECA, serves to bring Australian influence to lesser island nations in the Southern Hemisphere and improve trade relations among members.


    SPARTECA has its roots in a treaty signed in July, of 1980 at a meeting of a group known as the Forum Island Countries, or FIC. The purpose of the treaty initially was to encourage trade among the smaller, lesser developed island nations of South Pacific with New Zealand and Australia. SPARTECA nations may trade amongst themselves without duty taxes and other restrictions.

    Current members of SPARTECA include:

    • Australia - Australia holds the largest economy among the current SPARTECA roster. The Australian dollar is standard among several other island nation members, who trade with Australia for goods like beef, grains, and coal.

    • Cook Islands - This chain of small islands is technically part of New Zealand, and relies heavily upon tourism for their economy. Their geographical location allows for limited trade opportunities, though fruits and fish are exported regularly to Australia and Japan.

    • Fiji - While a popular tourist destination in the Pacific, Fiji has not existed without political controversy. A military coup in the late 2000s resulted in a governmental flux, and citizens continue to await the opportunity for fair elections. Prime exports of Fiji include timber, seafood, and various precious metals.

    • Kiribati - Once known as the Gilbert Islands, Kiribati is a former British colony with one of the lowest GDPs on record. Fish is a prime export, though Kiribati relies upon aid often from more developed neighbors like Australia and Japan.

    • Marshall Islands - A pivotal area during World War II with regards to nuclear testing, these Micronesian islands rely more upon imported goods from the United States, Japan, and Australia than they are able to export. Like other member nations in SPARTECA, seafood is a major industry.

    • Nauru - Nauru has the distinction of being one of the least populated independent nations in the world, and having a rather large unemployment rate. Strip mining is the major industry on the island.

    • New Zealand - New Zealand remains a constitutional monarchy under Queen Elizabeth II and is a highly developed island nation within SPARTECA, though trade is crucial to their economic status. Wool is perhaps their best known export, along with dairy and livestock to major partners Australia and China.

    • Niue - New Zealand is this island's largest benefactor, and the New Zealand "Kiwi" dollar is their standard currency. Nearly everything exported from here - honey, coconuts, and passion fruit - is distributed among SPARTECA nations.

    • Papua New Guinea - This British commonwealth nation is one of the least developed and explored in the world, yet is rich in natural resources like palm oil and precious metals which are traded to Australia.

    • Samoa - Samoa represents one of the larger islands in Polynesia, and like other SPARTECA nations relies upon crops of coconuts and indigenous fruits for their exports.

    • Solomon Islands - This Melanesian nation subsists on fishing industries and exports nearly half of their goods - coconut products, cocoa, and other crops - to Japan.

    • Tonga - Tonga presently seeks to grow as a tourism destination in the South Pacific, but for now they rely on cash crops such as root vegetables, coconuts, and bananas to trade.

    • Tuvalu - As one of the smallest nations in the world, Tuvalu has experienced little to no economic growth in recent years. Interestingly enough, the nation derives some income through sales of their desirable national Internet domain suffix (.tv).

    • Vanuatu - Vanuatu is dependent on their agriculture and tourism to maintain their economy. Television viewers may be familiar with the island nation through reality shows as Survivor , which has filmed on location.

    One of the major challenges to SPARTECA is the obvious underdevelopment of the lesser member nations and their dependence on the larger economies of Australia and New Zealand for aid. The islands of Polynesia and Micronesia may see branching out trade to Europe and the Americas as a challenge if there are not enough goods to produce to meet a demand. To this end, a focus on tourism may help boost these minor economies, though their isolation in terms of geography presents issues for travelers outside of Australia and New Zealand.

    Nonetheless, while SPARTECA plays a small role in trade on the global scale, one may become aware of the contributions these island nations make to the world economy through their involvement with Australia.


  • The ECOWAS Trade Agreement – Promoting Economic Health in West Africa



    The Western mindset of Africa is likely filled with visions of poverty, primitive resources, and political unrest. Indeed, much of what we see in the news on Africa tends to perpetuate these general opinions, though it is unfair to place all African countries in the same category. While not the wealthiest region in the world in terms of GDP and trade, certain blocs of Africa have worked to improve trade relations with their neighbors and promote growing industries in energy, telecommunications, and commerce. The countries of West Africa, through nearly forty years of alliance, are such an example of progress within the continent.

    The Economic Community of West African States, or ECOWAS, has beginnings in the Treaty of Lagos, ratified in 1975 for the purpose of promoting economic development in West Africa. In addition to maintaining strong trade relations between member nations, ECOWAS assists in matters involving civil peacekeeping. Policies are put forth by the ECOWAS Secretariat and the ECOWAS Bank for Investment and Development, or EBID, which recently appointed Bashir M. Ifo their newest president. Over the last decade, EBID has entered into loan agreements with various companies and international banks in order to improve industry in West Africa. A significant agreement finalized in 2010, for one, has allowed for the financing of a pharmaceutical factory in the region and consequent production and research of resources designed to improve health conditions in the area.




    The lineup has changed little over the last thirty-seven years. Of the fifteen nations currently in ECOWAS, the members include:

    • Benin - A largely agricultural country, Benin produces one major crop (cotton) that accounts for the majority of their export trade. Primary trade partners include China, India, and Niger.

    • Burkina Faso - This nation represents one of the lowest gross domestic product percentages in Africa, if not the world. Like other countries in the region, Burkina Faso is agricultural - growing corn and sorghum among other crops - but also employs natives for copper and iron mining.

    • Cape Verde - The only islandic member nation of ECOWAS imports nearly all of its food, except for seafood. Once a colony of Portugal, Cape Verde maintains strong trade ties to the country as well as Spain.

    • Ivory Coast - As one of the top exporting African nations, Côte d'Ivoire is a top exporter of cocoa and coffee, bananas and pineapples, and other agricultural goods.

    • Gambia - Gambia is known for their peanut production and fishing industries, and is also one of the more popular tourist destinations in West Africa.

    • Ghana - Ghana is one of the continents more developed nations, with a healthy GDP that keeps the country economically above water. Gold and cocoa are among two of their more popular exports, traded to the Netherlands, the United States, and the Ukraine.

    • Guinea - Guinea maintains active mining and agricultural industries, with major exports like gold and minerals, and coffee traded to South Korea, Russia, and Spain.

    • Guinea-Bissau - One of the least developed nations in Africa, Guinea-Bissau averages around $50 million in export goods. They are known for ground nut crops and export more than half of their goods to India.

    • Liberia - Historically known as a nation founded by freed slaves, Liberia boasts a timber industry that partly contributes to their annual average export totals of $2 billion.

    • Mali - One of Africa's underdeveloped nations, Mali relies heavily on foreign aid but does manage to export cotton and gold to their main trade partners in Asia.

    • Niger - Niger is known for export of raw minerals - in particular uranium - to foreign markets. Japan receives the majority of their output.

    • Nigeria - One of the Next Eleven economies, Nigeria's growth is evident in rising exports to the United States and Europe - petroleum, cocoa and rubber among other products.

    • Senegal - Like many neighboring countries in ECOWAS, Senegal maintains agricultural and seafood industries that produce ground nuts and fish to trade partners.

    • Sierra Leone - Mining is one of the more profitable industries in this underdeveloped nation.

    • Togo - Togo is unique within ECOWAS in that it serves as a commerce hub for neighboring nations. Goods that come into Togo are often re-exported throughout West Africa, though the country also produces coffee and cocoa to trade.

    Of the above, Guinea, Guinea-Bissau, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo are founding members of UEMOA (West African Economic and Monetary Union), a pro-trade agreement signed to complement ECOWAS.  

    Future projects for ECOWAS include a better streamlined method for trade relations within the borders of member nations - improved transport by rail and a common currency dubbed Eco are among the proposals the ECOWAS nations hope to see in the next decade. With recent loan agreements in place through relations with India and companies like DO PHARMA, one can see the potential in raising the overall GDP for the region once such improvements are in place.


    Posted Jan 05 2012, 06:29 PM by admin with 1 comment(s)
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