Eco_372_Week_5_Individual_International_Trade_and_Finance_Speech

International Trade and Finance Speech My Name ECO/372 September 24, 2013 Instructor Name International Trade and Finance Speech Ladies and gentlemen of the press, thank you for coming here this evening. I want to address where we are in the bottled beer industry following the latest congressional hearing on the impact of foreign trade. I am going to briefly discuss the effects of international trade on the domestic and international markets. I am going to discuss what happens when there is a surplus of imports brought into the country and how this affects the bottled beer industry. I want to touch basis in regards to how the United States handles tariffs and quotas. I am going to make a statement on how the foreign exchange works and how it can affect this industry. Finally by popular demand I am going to attempt to address why the United States does not restrict all the goods coming from china and any other country competing with us as a nation. What are the effects of international trade on the domestic and international markets of your industry' International trade is considered a major player on our current economy. It always has and always will be a player within our GDP. It is widely known that our country had shifted from a creditor nation to a debtor nation over the last few decades. This had created huge changes to the economy as a whole. So, let’s take a look at international trade. When a country creates goods other countries want they export them to other countries. And when another country makes something you want we import it to our country. The rise in technology has made it easier for businesses to find the products they need and import those causing exports and imports to raise substantially all over the globe. As a nation we import a lot more than we export this causes our GDP to be lowered because we are consuming more than we are exporting. This also has an effect on our domestic product because we are buying more goods from other countries and less from within our own nation. What happens when there is a surplus of imports brought into the U.S. for your industry' Cite a specific example of a product your industry either imports or exports, and the impact that has on U.S. businesses and consumers. Domestic producers competing with imports suffer from lower prices and fewer sales. They have less revenue and resource owners doing the production have less income. However, Domestic consumers enjoy lower prices. One of the great things about our open markets is that we have the ability to import the beer we want which has given imported beer a 10 percent stake of the American market (Hickey, 2013). Being that our industry is worldwide our beers are also sold worldwide and there is a strong demand for American beer all around the world. The 10 percent stake others have in our market we make up by being in their markets. Bud Light is the most popular beer sold worldwide. Most of this is consumed in Europe. I have explained the market now when a larger than needed amount of beer floods the market whether it is import or domestic the bottom line dropped out and the price of beer falls. This causes rapid losses for the industry and can result in an overall increase to the cost of beer. How do government choices in regards to tariffs and quotas affect international relations and trade for your industry' The North American Free Trade Agreement (NAFTA), which was implemented on January 1, 1994 between the United States, Mexico, and Canada, created one of the world's largest free trade area. These three countries have a combined population of 381 million people, $7.8 trillion in annual economic output, and annual trade exceeding $1.4 trillion. Without the tariffs Mexican beer has taken a 10 percent share in the American beer market. It has also increased the export of American beer in Mexico (Bridges, 2013). What are foreign exchange rates' How are they affecting your industry' International currency exchange rates display how much one unit of a currency can be exchanged for another currency. Currency exchange rates can be floating, in which case they change continually based on a multitude of factors, or they can be pegged (or fixed) to another currency, in which case they still float, but they move in tandem with the currency to which they are pegged. This means that watching the rate of exchange between the United States and a country you need to buy supplies from could determine if you spend 2 million or 4 million for the same amount of goods purchased. In regards to our industry these could be hops, barley, and spices. Why doesn’t the U.S. simply restrict all goods coming in from China or other countries that compete with you' What is your industry’s position on the use of trade restrictions as it relates to your industry' The reason we can simply cease all trades is because it would cause deep wounds into our own economy. If we did not allow trades from a country, then in retaliation that country would not accept our goods. Even though our exports are low china still buys many billions of dollars’ worth of American products. Soybean is a major import from America to china. Consider what would happen to the soybean crops if they were not exported. Or our technology that we rely on so heavily was not imported from china. There would be an extreme shortage and this would drive up the price of technology to the point that the average person could not afford it. There would be an even larger black market and the government would lose out on billions of tax dollars. This is all hypothetical. Think of the possible things you would lose if china was no longer our trading partner. If you are a concerned citizen I recommend you start shopping at the mom and pop stores, looking for products made in America even if the price is slightly higher. Lowering the leverage china has on the goods market in America is the only thing that is going to lower the amount of imports into America.   Reference Bridges, J. (2013), The North American Free Trade Agreement and U.S. Agriculture Retrieved from http://www.ces.ncsu.edu/depts/agecon/trade/nine.html Hickey, M (2013), Business of beer: Imports Gain, Microbrews Rebound Retrieved from http://abcnews.go.com/Business/story'id=88407&page=1 Research Markets USA Beer Market Insights (2013) retrieved from http://www.businesswire.com/news/home/20130823005416/en/Research-Markets-USA-Beer-Market-Insights-2013