US FOREIGN TRADE

PARTICULARITIES

ByABY PHILIPOSEUMA1V22MBA

FOREIGN TRADE Foreign trade is exchange of capital, goods, and services across

international borders or territories. In most countries, it represents a significant share of gross domestic product (GDP).

Generally no country is self-sufficient. It has to depend upon other countries for importing the goods which are either non-available with it or are available in insufficient quantities. Similarly, it can export goods, which are in excess quantity with it and are in high demand outside.

Foreign Trade involves different currencies of different countries and is regulated by laws, rules and regulations of the concerned countries.

INTRODUCTION Foreign trade of the United States comprises the international

imports and  exports of the United States, one of the world's most significant economic markets. The country is among the top three global importers and exporters.

The regulation of trade is constitutionally vested in the United States Congress.

After the Great Depression, the country emerged as among the most significant global trade policy-makers, and it is now a partner to a number of international trade agreements, including the General Agreement on Tariffs and Trade (GATT) and the International Trade Organization (ITO)

Gross U.S. assets held by foreigners were $16.3 trillion as of the end of 2006 (over 100% of GDP).

HISTORY U.S. was the dominant supplier of worldwide demand for

technology and industrial goods during 1950’s, 60’s and early 70’s.

This resulted in technological & cultural arrogance complacency (US: manufacturing nation, trading was for inferior nations like Japan) - unprepared for competition first from Europe, then Japan, then Korea, Taiwan, Singapore etc. & now from China and India.

Lost large shares of US markets for textiles, garments, shoes, toys, steel, electronics, small appliances, autos, and much more during the 1970’s, 80’s, and 90’s. Now: worries about “outsourcing”.

FOREIGN TRADE OF US

The U.S. is the largest exporter in the world for commercial services and the second largest for merchandise.

Total trade (exports and imports) accounted for 30% of U.S. GDP in 2013.

U.S. exports totaled a record $2.3 trillion in 2013, up 2.9% from 2012 and 44.0% from 2009 when the global crisis caused a worldwide drop in exports.

In 2013, exports were up $63.7 billion from 2012, with goods exports increasing by $31.1 billion and services exports increasing by $32.6 billion.

The U.S. trade balance improved by $61.2 billion from 2012 to 2013, driven by the increase in both goods and services exports and a drop in goods imports.

Trade in goods drives the majority of both exporting and importing activity. Exports of goods and services supported 11.3 million jobs in 2013, an

increase of 1.6 million jobs since 2009. In 2013, every billion dollars of U.S. exports supported nearly 5,600 jobs.

TRADE AGREEMENTS The United States is Member of the World Trade Organization

(WTO), and the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement) sets out rules governing trade among the WTO's 154 members.

The United States has free trade agreements (FTAs) in effect with 20 countries.

Another important type of trade agreement is the Trade and Investment Framework Agreement. TIFAs provide frameworks for governments to discuss and resolve trade and investment issues at an early stage.

The United States also has a series of Bilateral Investment Treaties (BITs) help protect private investment, develop market-oriented policies in partner countries, and promote U.S. exports.

INTERNATIONAL TRADE AGREEMENTS

COMPOSITION OF TRADE Composition of trade shows the mix of goods imported

and exported by a particular country. By looking at the composition of trade, we get an idea of

the structure and level of development of a country. If a country mostly imports manufactured goods and

exports primary goods, we say that such a country is an under-developed country.

On the contrary, If a country imports primary goods and exports manufactured goods, we say that such a country is a developed country.

BALANCE OF TRADE

Balance of trade refers to as the difference between a country’s import of merchandise and its exports thereof

Balance of trade may be positive, surplus or negative deficit depending on situation of net position.

The positive , surplus occur when export exceeds import and when import exceeds export the balance trade is said to be deficit or negative.

The US international trade deficit in goods and services increased to $43.4 billion in December from $42.2 billion in November (revised), as exports decreased and imports increased.

CORRECTIVE MEASURES FOR TRADE DEFICIT. Export Promotion- By keeping quality and price

competitive. Import Restriction- By imposing heavy tax and duty in

import. Monetary Measures- By putting restriction on bank’s

credit. Fiscal Measures- By curtailing public expenditure. Devaluation- By devaluating country’s official rate of

exchange.

THANKS