China and Russia are major trading partners specifically in areas like capital, resources, technology and manpower.They are aiming to increase bilateral trade between them; however with the economic downturn they might face some challenges in doing so.
b) Chile and Argentina
Argentina is one of the top vegetable oil producers in the world-due to low domestic consumption and high productivity- with Chile as a main buyer. After a tariff reclassification in 1999, the Chilean price band system (PBS) resulted in higher customs duties of up to 64.41%, thus violating the limit set at 31.5%. As a result, this issue was submitted to the WTO .
c) U.S and Europe ...view middle of the document...
I also had an opportunity to work with a shipping company called “ECU Line” that had a branch in Jebel Ali, Dubai as my father-who also works in the same line of business-had got me a placement there. This allowed to me get an insight into the trading business. I discovered that business in that particular industry was moving slowly due the global recession.
With the first case, there has been a lack of financing for Russia’s banks-due to the economic downturn- which has prevented them from investing in China. China mainly demands natural resources like oil, gas and timber whereas Russia demands industrial products and labor. However, Russia’s economy is no longer orientated in the secondary sector; therefore they are demanding less industrial products than before.
In the second case, it was the changes in demand and supply of soy and sunflower seeds that lead to a decrease in price. South-east Asia and Russia were undergoing deep economic crises and thus making decreased purchases. This combined with the production of genetically modified soy and a record harvest of sunflower and soy contributed to increased production of seeds. Low prices meant higher sales to Chile and in order to curb excessive imports, the government raised the tariff limit.
Finally, with the 3rd case, the main reason why Europe is seeking a free trade agreement with the U.S is to increase the prospects of economic growth. If there is a free-trade agreement, the Europe’s cost incurred for importing goods would decrease which could lead to economic growth.
Concerning the first case, China has implemented strategies to allow increase in trade between the two countries. Newly elected president of China, Mr. Xi, had visited Russia in March 2013, in order to assign priority to their ties in their agendas and foreign policies.
Concerning the second case, Argentina has taken the dispute to the WTO. It was deliberated that the maximum tariff limit was set to 31.5%, In addition, vegetable oil was excluded from the PBS, and there were guidelines in place that were to be followed strictly. Unfortunately, several factories in Argentina had to close down due to the collapse of prices.
Concerning the third case,numerous food and agricultural groups in the U.S were concerned that a free-trade agreement would not include their industry . Moreover, a free trade agreement would reduce/eliminate already low tariffs and synchronize regulations governing industries like pharmaceuticals and auto parts.
The main cause for a decrease in trade, a hike in prices for imported goods like rice and pulses (due to shortages) and for Dubai increasing air transport availability to other countries like Texas is due to the Great Recession that hit the world in 2008. Although Dubai wasn’t part of the crisis directly, we were affected by the repercussions of the international economic system as U.A.E plays an active...