Import andexport trade affects almost every person in the world.
It enables all countriesto make the best use of its most abundant resources. By exporting its surplus,a country earns the money to import another nation’s surplus. According to theU.S. Chamber of Commerce, Import and export industry secures about 38 millionjobs, or one-fifth of persons in private employment, are engaged in activitiesrelated to import or export,. Every type of import or export arrangement necessitatesnumerous jobs to organize, maintain, and develop the deal. The total dollar value of all the goods and services that Americaimports outweighs the value of what it exports .In 2015 the United Statesimported over 2 billion dollars’ worth of goods from around the world.
29% incapital goods, and 26% consumer goods. The US trade deficit has been above $100billion since 1996. In earlier eras, theUS policy was to reduce imports by setting quotas and imposing tariffs, butthat policy has been replaced by the free trade principle, which allows goodsand services to flow freely between nations.Even if the free trade policy opens opportunities in theimport-export industry it does not guarantee security for professions in thisfield. The industry is sensitive to fluctuations in the economies of importingand exporting trade partners, and to changes in government trade policy. TheUnited States and Morocco made the Free Trade Agreement on January 1, 2006; thisagreement eliminates duties on more than 95% of all goods and services.
Inaddition to key U.S. export sectors gaining immediate duty-free access to theMoroccan market, the Agreement includes commitments by Morocco for increasedregulatory transparency and the protection of intellectual property rights.Morocco is currently the 69th largest goods trading partner of the USA with$3.3 billion in total (two way) goods trade during 2013. The US goods tradesurplus with Morocco was $1.3 billion in 2013.
Goods exports totaled $2.3billion; Goods imports totaled $977 million. In2013, Morocco was classified the 80th largest supplier of goods imports to theUSA. Goods imports from Morocco totaled $977 million in 2013, a 4.8% increase($45 million) from 2012, and up 154% from 2003. U.S. imports from Morocco areup 119% from 2005.
The U.S. goods trade surplus with Morocco was $1.3 billionin 2013, a 6.8% increase ($85 million) over 2012. Accordingto statista.
com, the top trading partners of the United States for trade goodsin 2016, by import value are: China with a value of $462.8 billion, Canada$278.1 billion, Mexico $29.2 billion, Japan $132.2 billion, Germany $114.2billion, Korea south $69.9 billion, United Kingdom $54.3 billion, France $46.
8billion, India $46 billion, Taiwan $39.3 billion, Italy $45.2 billion, andBrazil $26.2 billion. Those partners are considered as competitors of Moroccoin its trade with the USA. TheUnited States imports clothing, electronics, and machinery from China. A lot ofU.
S manufacturers send raw materials to China for low-cost assembly. Onceshipped back to the U.S, they are considered imports. Most economists approvethat the lower standard of living in China is the cause of its competitivepricing, which allows companies in China to pay lower wages to workers. Chinamust buy so many U.S.
Treasury notes that it is the largest lender to the U.S. government.As of October 2017, the U.S. debt to China was $1.2 trillion. It is 19% of thetotal public debt owned by foreign countries.
Many are worried about what wouldhappen if it threatened to call in its loan. U.S.companies that can’t compete with cheap Chinese goods must either lower theircosts which means give low wages to their workers (which is impossible inAmerica), or leave the business field. So, businesses thought to reduce theircosts by outsourcing jobs to China or India, which increased the U.
S.unemployment. 1. Key Success Factors:Accordingto a U.S.
Department of Commerce report, over 185,000 U.S. companies importedforeign goods in 2012, an increase of more than 10% from 2009. The majority of these businesses were smallor medium-sized companies that may, in fact, lack the necessary resources to bea successful importer. But they worked smart, and they knew their key successfactors. Before launching a business, we have to analyze the market, and wehave to know the needs of our customers.
Highquality and low price is the main keysuccess factor that an importer should consider. More and more, costumers areaware that inexpensive does not mean poor quality. Providing cheap goods with agood quality is the key to dominate a market place. And it is the first step tobe known in the market.ReasonableRegulations: before startinga business, people should learn the regulations for importing goods,researching both the country from which they are exporting and the country intowhich they are importing their goods. People should learn the regulations coveringproduct requirements, inspections, licenses, shipping methods, and any otherrequirements needed to be followed.
ProperMarket Research: after creating alist of potential import markets, importers have to research those markets morethoroughly, they might have a competitor with a very strong brand presence andcustomer loyalty base. They might have limited distribution opportunities,based on the fact that a competitor has already negotiated exclusive agreementswith many retailers and wholesalers. People have to look for places whereconsumers are willing to buy their imported products. They have to determineprice points for the same products sold to determine at what price they willhave to sell their product. EfficientShipping and Distribution: importers must contactshippers to their targeted markets and distributors who can move their productsat a reasonable price. They have to find shippers that have experience shipping,and those that have a track record of successfully shipping to the market. Peoplemust look for distributors with the ability to get them into retail outlets, conductmarketing efforts on their behalf and take payment on terms acceptable to forboth sides. Research Import Quota Requirements: These refer to quotas that limit the amount of imported commoditiesinto the United States within a specified amount of time.
Some quotas allowgoods to continue entering the United States after the limit has been reachedbut at a higher rate of duty. EstablishGood Relationships: every partythat is doing business with has a small part in the importers’ success. Productsuppliers, Freight forwarders, Distribution centers, every channel is veryimportant for a successful business. 2. Industry Trends:Importersand exporters are the matchmakers of international trade.
Import and export arehigh-risk businesses that are vulnerable to sudden changes. There are manyexternal forces that impact import/export industry. These include tradebarrier, shipping costs, natural disasters, goods in transit, domestic costsand infrastructure availability, exchange rates, inflation, political stability,and demographic factors. · Tradebarrier: the degree to which a governmentestablishes or eliminates trade barriers has a huge impact on importingand exporting. For example, the decision of the United States to openits markets significantly after World War II helped to allow Japan build its”economic miracle” on exports to the USA. Policies that restrict imports or promoteexports change the relative prices of those goods, making it more or lessattractive to import or export. Nations that have restrictive trade policiessuch as high import tariffs and duties may have larger trade deficits thancountries with open trade policies. · Shippingcosts: importing or exporting involvesgenerally the movement of large amount of materials.
The costs of this movementhave a major impact on whether importing or exporting can be profitable.Business owners should choose the best way to move their goods to the desiredmarkets; they usually use road, rail, sea, or air. Using roads is actually lowcost and extensive road networks are available. But it has some downsides suchas breakdowns, traffic, borders, and fuel charges. Shipping freight by sea hasthe benefit of allowing importers/exporters to ship high volumes of goods andusing shipping containers that can be easily be forwarded by roads from thedocks. However, it can be slow, tracking goods can be difficult, bad weathercan delay scheduling, and insurance costs can easily get out of control.Shipping freight by air is the quickest, safest, and the most expensive methodof shipping imported goods. Additional costs might include airport taxes, fueland currency surcharges and additional transport from the receiving airport.
· Naturaldisasters: natural disasters such ashurricanes and tsunamis can unexpectedly affect the transportation of importsand exports. Forest fires, for example, may wipe out trees that can be used inexported products. In March 2011 North Japan earthquake and tsunami destroyedports on Japan’s Honshu coast and blocked imports. Californian computer chipexporters were severely hit as a result. In 2010 a volcanic eruption in Icelanddisrupted both trade and air travel in Europe and beyond for up to a month.International importers/exporters can insure themselves to a limited degreeagainst the consequences of natural disasters.
· Goodsin Transit: Goods intransit may be damaged or lost by accidents, negligence, theft, or naturaldisasters. Delivery dates may be delayed. Import or export goods should carryinsurance that covers the goods from the company’s factory gate to the time theyare on the buyers hands.
Importers in countries with highly regulated insuranceindustries can negotiate cheaper insurance rates at home and follow moretransparent claims processes after a loss. · Domesticcosts and infrastructure availability: onereason that importing and exporting has increased is that it has become cheaperand more practical to produce things in poorer countries and ship them toricher ones. This is because of the high costs of things like labor in richcountries. Furthermore, poor countries gained infrastructure that allow them toproduce things for export with low price and good quality. · Exchangerates: Exchange rate becomes a very vitaldriver of performance in import and export industry.
It is more gainful toexport when the currency of the exporting country is weaker than the currencyof the importing country. But this advantage is reversed if the importedmaterials are from a country whose currency is stronger. A company will run itsmost profitable operations when it imports materials from a country whosecurrency is weaker, and exports its product to a country whose currency isstronger. · Inflation:inflation refers to an increase in prices without an equivalentincrease in wages, resulting lower purchasing power of consumers. When thecosts of producing goods and services are low, they will be sold at lowerprices, and vice versa. Inflation rate is higher when costs of producing goodsor services are high or when there is too much money purchasing too fewsupplies, prompting suppliers to increase prices and earn higher profits. Highinflation rate decreases real wages, for example, the customer can buy fewproducts with his income because the products have become more expensive.
Ininflationary times, customers stock items to save themselves from more increasein prices and leave their favorite brands to buy more economical brands. · Politicalstability: a stablegovernment means more chances for internal production, while instability likewars means that the country will have to depend on imports. · Demographicfactors: Demography is the study of people: theirage, race, ethnicity, and location. Demographics are important because peopleconstitute markets.
Demographic characteristics strongly affect buyer behavior.Fast growth of population accompanied with rising income means growing markets.Moreover, a longer life span means a growing market for products and servicesdirected for the elderly. 3. Long Term Prospect:Thereare so many positive things happening in the import/export industry thatprovide long term success. According to Joshua Meltzer, a senior fellow inGlobal Economy and Development, and Foreign Policy Senior Fellow Mireya Solís internationaltrade has had a positive impact on overall U.S.
job growth, and that the TPP(Transpacific Partnership Agreement) could continue that trend. The TPPspecifically, notes Solís, is estimated to result in a net positive effect onjob creation and wages: 128,000 jobs, and increases in real wages 0.19% by2032. Furthermore, Solís points out that under the TPP, annual increases in realincome for Americans, like the expansion in their purchasing power, areestimated to range from $57 billion to $131 billion by 2032, compared to the baselinescenario without the TPP. U.S has 14 free trade agreements with 20 countries; and they all havea common goal. Actually, they all exist as a way to decrease trade barriers andcreate a more transparent and stable trading and investment environment.
Thiswould allow for American companies to export their goods and services to the 20trading partners with cheap trade barriers, making American exporterscompetitive in those markets. According to International Trade Administration’swebsite, nearly half (47%) of U.S. goods exports went to the 20 free tradeagreement countries. U.
S. merchandise exports to the partner countries totaled$710 billion, Kimberly Ann Elliott mentioned that the USeconomy is 44 times larger than that of the average country with which it has afree trade agreement and more than 200 times larger than half of them. Internationaltrade can bring prosperity and success, as barriers to trade are lowered, arising tide of goods, services and money flows around the nation, which resultsa raising living standards for a lot of Americans.