According to Prime Minister Lee Hsien Loong, the Trans-Pacific Partnership (TPP) trade pact is necessary to demonstrate US’ commitment  to engage with the Asia-Pacific region.   Furthermore,  the TPP involves the US and 11 other countries including Japan and Australia, when combined results in 40% of the world’s GDP.  “The TPP is a key part of the US’ rebalancing towards Asia and an instrument to deepen this relationship”. So why the hesitation? Read more in the article below.

US to lose a great deal if TPP pact isn’t ratified: PM (PUBLISHED: JUNE 28, 2014)

NEW YORK — The United States would stand to lose a great deal if ratification of the Trans-Pacific Partnership (TPP) trade pact became a problem, said Prime Minister Lee Hsien Loong as he wrapped up a six-day working visit to Washington DC and New York.

In an interview with Singapore media, Mr Lee said failing to ratify the trade pact would be very damaging and call into question the US’ commitment to and engagement with the Asia-Pacific region.

Negotiations for the TPP — which involves the US and 11 other countries including Japan and Australia, which combined make up about 40 per cent of the world’s gross domestic product — could conclude by November. US’ ratification of the trade pact requires the support of its Congress.

Mr Lee, who met Congressmen and other key officials during his trip, said he made the TPP pitch to everyone he met and received a range of reactions.

“I think many understood the imperative, but there are some political considerations, of course. You’ve got the elections coming and even beyond the elections, you want to have something which is saleable to the voters,” he said. “And while a good number said yes … there were also a few who listened to me and reserved their positions. So I don’t know how they will decide, but I hope I have left them something to think about.”

Mr Lee has pitched strongly for the TPP in recent days, such as during a dialogue held at a think tank in Washington DC. He also called on business leaders to lend their support at such events as a reception to commemorate the 10th anniversary of Singapore’s free trade agreement with the US.

The TPP is a key part of the US’ rebalancing towards Asia and an instrument to deepen this relationship, he said. The region is moving, such as through the Regional Comprehensive Economic Partnership involving the Association of South-east Asian Nations, China, Japan, South Korea, Australia, New Zealand and India. “So if America is not moving, you may be part of the game, but you’re not in play.”

Asked about the receptiveness of US Vice-President Joe Biden and National Security Adviser Susan Rice during meetings with them, Mr Lee said they are completely convinced of the TPP. It was foremost on US President Barack Obama’s mind when he joined the meeting with Ms Rice for a few minutes, Mr Lee added.

“So I’m convinced that the Administration wants it; what we need to be able to know is that between the Administration and Congress, and the American people, they can work together to deliver the ratification.”

Mr Obama was reported last week saying he hoped for a document to present to the public and stakeholders by the time he travels to Asia in November. The meeting of the Group of Twenty leaders will take place in Australia and the Asia-Pacific Economic Cooperation (APEC) leaders meet in Beijing that month.

On how the South China Sea disputes between China and four Southeast Asian countries affect the US’ rebalancing towards Asia, Mr Lee said the Americans’ strategic move is happening regardless of specific issues, such as the territorial rows in the South and East China Seas.

The US has a legitimate interest in the South China Sea issue because of freedom of navigation and international law, but stable US-China relations are important, he said. “I told them, it depends on what you say, it depends on how you act, also it depends on how you interact with China and with the other participants in the region.”

Marisol R.

It feels good to know that EMBA students are not alone in doing HW.  However, we know to do extensive research before presenting facts or writing a report.  It’s disappointing to read that tariffs were being reported to be at a record low, which contradicts information from the Trans-Pacific Partnership (TPP). Although tariff restrictions on agricultural imports are about 2.2%, the non-tariff barriers jumps to 17.0%, and Japan’s all-in tariff equivalent on agricultural imports is 38.3%. South Korea’s is 48.9%, and Australia’s is 29.5%.” I too cannot conclude that tariffs are “universally low”. Read the article below for more interesting facts. 

More homework, please  (Feb 28th 2014 by R.A. | LONDON)

BACK in December, Paul Krugman promised to provide his opinion of the Trans-Pacific Partnership, writing to readers, “I’ll do some homework and get back to you.” Today, his column provides his opinion of the TPP. It doesn’t provide much evidence that he did his homework. Mr Krugman writes:

The first thing you need to know about trade deals in general is that they aren’t what they used to be. The glory days of trade negotiations — the days of deals like the Kennedy Round of the 1960s, which sharply reduced tariffs around the world — are long behind us.Why? Basically, old-fashioned trade deals are a victim of their own success: there just isn’t much more protectionism to eliminate. Average U.S. tariff rates have fallen by two-thirds since 1960. The most recent report on American import restraints by the International Trade Commission puts their total cost at less than 0.01 percent of G.D.P.Implicit protection of services — rules and regulations that have the effect of, say, blocking foreign competition in insurance — surely impose additional costs. But the fact remains that, these days, “trade agreements” are mainly about other things. What they’re really about, in particular, is property rights — things like the ability to enforce patents on drugs and copyrights on movies. And so it is with T.P.P.

t’s just not clear to me how anyone who had looked at available information on the TPP could have arrived at this conclusion.

It is true that tariff rates on goods have come down enormously over the past half century. In macroeconomic terms, there is very little left to be gained from further reductions (though little is not nothing, of course). But tariff rates are not universally low. On some categories of goods they remain quite high, and while those categories might be too small to make liberalization macro economically important, tariff-reduction might nonetheless be micro economically desirable. Slashing tariffs on equipment used in wind-power installations or solar-energy facilities will not make a dent in GDP growth. But it would still be a really good thing to do. And trade in environmental goods and services is part of the TPP agenda.

Second, one of the stated ambitions of both TPP and the Trans-Atlantic Trade and Investment Partnership is reduction in non-tariff barriers, which in most cases add substantially more to goods costs than tariff barriers. According to estimates by the World Bank, for instance, American tariff restrictions on agricultural imports are relatively low on the whole, at just 2.2%. But the tariff equivalent of an all-in measure of restrictiveness, which takes into account non-tariff barriers, jumps to 17.0%. The all-in rates for many of the partners in TPP negotiations are substantially higher; Japan’s all-in tariff equivalent on agricultural imports is 38.3%. South Korea’s is 48.9%. Australia’s is 29.5%.

Third, “implicit protection of services” does indeed impose additional costs. For instance, the cost to foreign providers of some crucial transport and shipping services within the American market is basically infinite. Services account for four times as much economic output as goods production in America but only around one-fifth of American trade. Many services aren’t tradable, of course; haircut tariffs will not be on the TPP agenda. But a growing array are. And rules on service trade have barely changed at all in two decades. TTIP and TPP (as well as the Trade in Services Agreement) are aimed at updating rules on services trade to make it easier to sell insurance, or financial and consulting services, or IT and environmental services, and so on, across borders. Now maybe these deals are “really about” intellectual property, and all-powerful Hollywood has convinced the government to expend a lot of time and effort setting standards for services trade, the better to provide a smokescreen for its own nefarious activities. But I doubt it.

Investment is another key item on the agenda. At present rules on cross-border investment can be pretty ad hoc; a firm interested in buying shares in a business in another country often needs to be careful not to buy too much or not to invest in politically sensitive industries, lest the investment invite political scrutiny. TPP is working to reduce the scope for ad-hoc interference in investment, which I think we would generally consider to be a good thing. TTIP is as well (that’s what the “I” is all about).

The list goes on. Both TTIP and TPP are taking steps toward regulatory harmonization. It’s a huge problem for firms when they need to get products separately approved by multiple governments. If the governments can all agree to a similar set of standards and then to honor each others’ approvals, then costs to firms and consumers for everything from food products to light bulbs to medical equipment could fall substantially. It’s also important to recognize that a lot of this stuff simply hasn’t been done at scale before, and TPP and TTIP aren’t intended to sweep away whole categories of barriers at a stroke, anymore than goods tariffs were slashed to almost nothing in one round of talks.

They are meant to start a new and important phase of liberalization, however. It would honestly be very difficult to read much at all on the deals and miss that point.

http://www.economist.com/multimedia

http://www.economist.com/blogs/freeexchange/2014/02/trade?zid=293&ah=e50f636873b42369614615ba3c16df4a

Wow, it’s amazing how the core curriculum for EMBA all makes sense.  As I searched through the internet to read on global expansion, I came across an article which discussed how Modality systems are expanding into Australia.  The very same SaaS services we discussed in our IT class and mentioned in the Zuora case study.  These modality systems offer “a range of end-to-end services from strategic consultancy and design, to deployment, end-user adoption and customized applications on behalf of Microsoft”. This article definitely hit home for me as I was part of the group assigned to present on Zuora.

Modality Systems Announces Expansion of Global Operations to Australia

Seattle, WA (PRWEB) May 22, 2014

The global expansion for Modality Systems is part of the continued growth of its global operations and part of a strategic plan to strengthen its activities in the APAC region. Justin Morris who is currently a Senior Consultant within the EMEA operations will return to his native homeland to head up the expansion as Managing Consultant of Modality Systems Pty Ltd.

Justin, who is a Microsoft Most Valuable Professional (MVP) for Lync as well as a well-respected and recognized figure within the UC market, has a wealth of technical and customer experience and has been instrumental in the growth of the Modality business over the last 5 years. He deployed the largest Lync voice project in the UK in 2012/2013 and has since been involved in a number of high profile consulting projects. He is also a regular speaker at industry events such as TechEd North America and Lync Conference, as well as the Co-Founder of Microsoft Unified Communication User Group London (MUCUGL) and a contributor to the UC Architects Podcast.

John Lamb, Co-founder and President of Modality Systems stated, The growth of our global business has been staggering over the last few years and the demand for our consulting and support expertise continues to grow. Expanding our activities into APAC is the next logical step with the goal of further developing the operations in the region to mirror the established activities in North America and EMEA.

John continues, Justin has been with us for nearly 5 years. His depth of knowledge in the UC space and approach to helping organizations realize the value of extending their UC investments, makes him the ideal candidate to head up our Australian office which will play a pivotal part in the continued global success.

About Modality Systems 
Modality Systems is a specialist provider of Unified Communications (UC) services, associated products and custom development software for Microsoft Lync. Combining in depth technical expertise with a professional consulting approach, we have an enviable track record in delivering successful projects globally, working with clients to optimize their investment and the value of UC.

Modality offers a range of end-to-end services from strategic consultancy and design, to deployment, end-user adoption and customized applications. Our consultants are some of the highest qualified in the Lync world, authoring leading Lync publications and carrying out Lync consultancy projects on behalf of Microsoft.

Modality was founded in 2007 and has offices in several locations in the UK and US to support the deployment and support of its global customer base. We are a Microsoft Gold competency partner for Communications and one of a limited number of Microsoft Lync Certified Support Partners.

Modality is consistently among the top Microsoft Lync partners in terms of number of seats delivered and have twice been awarded the Microsoft UK Unified Communications Partner of the Year Award.

Our reputation for successful deployments and delivering the highest level of support means we have a very satisfied client base of local and global customers and can boast the largest UK Enterprise Voice deployment, as well as the largest global Microsoft Certified Lync Support contract.

For the original version on PRWeb visit: http://www.prweb.com/releases/2014/05/prweb11870182.htm

Marisol R.

This article is a great example of cutting the “red tape” with importing and/or exporting of cargo. Businesses will now be able to electronically import and/or export cargo.   A process which often took days, can now be executed in minutes. Go Obama!

Obama’s order aimed at streamlining export import process: By Daniel Enoch

WASHINGTON, D.C., Feb. 19, 2014 – President Obama today will sign an executive order aimed at streamlining the export and import process for U.S. businesses, the White House said.

Through a new International Trade Data System (ITDS), businesses will be able to electronically transmit, through a “single-window,” government-required data to import or export cargo. Currently, information must be submitted to dozens of government agencies, often on paper, a process that can take days. The new system will allow processing in minutes, the White House said.

“This Executive Order is especially important to small and medium companies that depend on global trade,” the White House said in a news release. “Once fully implemented, the ITDS will dramatically reduce the time and expense for businesses to move the more than 50 million containers and $3.8 trillion worth of goods that cross our borders each year.”

Though the development of the ITDS has been underway for some time, Obama’s order sets a December 2016 deadline for completion and requires relevant agencies to transition from paper-based to electronic data collection, according to the White House.

Additionally, a newly expanded Border Interagency Executive Council (BIEC) will be responsible for improving coordination among the dozens of agencies with import and export requirements and with outside stakeholders.  The BIEC is charged with cutting red tape and reducing supply chain inefficiencies, while managing the risks presented by goods flowing in and out of the U.S., the White House said.

The executive order is one way in which Obama is making good on his State of the Union promise to make 2014 a year of action, by using his pen and his phone to take steps that expand opportunity for America’s middle class, the White House said. The president planned to sign the order today as he traveled on Air Force One to Mexico.

For more news, go to: www.agri-pulse.com

© Copyright Agri-Pulse Communications, Inc.

Marisol R.

Governments have a number of mechanisms through which they aim to support domestic economic growth, maintain jobs at home and expand opportunities for local firms to sell to additional markets via export. One vehicle which many countries have, including the U.S., is an export credit agency – an Export-Import Bank. In the U.S., we have the Export-Import Bank of the United States. “The mission of the Bank is to create and sustain U.S. jobs by financing sales of U.S. exports to international buyers” – it does this through a number of means, including loans, guarantees and insurance products.

It’s unfortunate that my becoming acquainted with the Export-Import Bank was a WSJ article reporting on alleged wrongdoing at the agency. In short, the allegations relate to claims that officials at the Bank received bribes or kickbacks to facilitate transactions for businesses with powerful “connections”. As you can read in the article, the timing of these allegations could not come at a more delicate time, as approval for the agency by Congress is coming up for renewal and Republicans appear to be lining up votes to shut it down. While the allegations are troubling and we should not tolerate such behavior at a government agency, I think it is important to assess the benefits and costs of having such an agency in clearheaded terms. From some quick internet searches, I can attest that there does not appear to be any shortage of Ex-Im Banks funded by countries around the world, supporting companies within their borders increase their exports. Supporting U.S. manufacturing by “facilitating” the financing of international trade, by both large and small businesses, to ensure that they remain competitive in an ever changing marketplace appears that it can be a worthwhile exercise for the Bank.

-Bill Ott

Please see below for a link to the WSJ article, as well as a related article from Bloomberg.

http://online.wsj.com/articles/officials-at-ex-im-bank-face-investigations-1403563954?mod=WSJ_hp_Markets3up

http://www.bloomberg.com/news/2014-06-27/how-the-u-s-ex-im-bank-landed-on-republicans-death-row.html

Good morning Classmates:

There is an article in the Wall Street Journal this morning about some of the backlash for USA multinational companies from the leaks from Edward Snowden. The German government is ending its contract with Verizon Communications due to concerns about network security and using Deutsch Telekom. This is a problem for USA technology companies and an opportunity for non USA technology companies. Germany and other European countries have strict privacy laws and the revelations about the NSA snooping has caused a real problem for USA companies.

Microsoft believes the issue is getting worse, not better and both Cisco and AT&T have stated that this will have negative implications for sales and more aggressive competition from non USA competitors. I have read that a possible solution is for the USA technology firms is to open storage facilities in foreign countries (FDI) and thereby alleviate fears that information is not being acquired by the NSA. I see the problem as a loss of confidence in these companies and once you lose that it is difficult to regain the customers trust. Using the cloak of national  security the US government may have seriously hurt some of our most successful multinational companies competitive advantage and helped the competition gain an edge.

http://online.wsj.com/articles/german-government-ends-verizon-contract-1403802226

David

Dear All,

Last Friday, I was lucky enough to be invited to PIMCO Summit 2014. The equity side of its business seemed to believe in investing in China. I found this article to be really interesting. As a Chinese born, I should support China’s development; however, I have always hesitated due to the fact that China is still under communist policy – I am afraid of Government can take away anything ones have earned. This article gives me a different perspective why there are other reasons may be we should wait….   Are you bullish or bearish?

http://globalpublicsquare.blogs.cnn.com/2012/11/28/what-we-get-wrong-about-china/?iref=allsearch

Yili Kilpatrick

Hi All,

As I was doing my weekly run through WWD I found it very interesting that prior to this class this article wouldn’t have as much of an impact on me as it does today. 

It speaks to the global investments that have spiked in 2013, it takes all aspects discussed in class- job creation, FDI increase and firm commitment’s to growth in these particular countries. 

The U.S. was the top host of FDI (according to the UN report). As this is relevant to fashion/textile industries, it is hopefully a sign of the fashion industry going in a better direction than after the recession of 2008. 

Prior to 2008, Luxury products were aspirational and consumers felt good when finally buying their dream car/suit/watch. After the recession, we saw what was somewhat of disassociation from those consumers that still could afford these luxury items. I remember in 2008 having many of our top clients ship their items to their home, this so that they wouldn’t be seen with the many bags of goods purchased. Buying luxury was shamed upon, this as the world was struggling to get over the global economy downturn. 

The luxury goods industry has been trying to get back to 2007 levels for about 6 years now. If this is a sign of what is to come in the future- there’s a good chance that luxury items will be more desirable, not to 2007 levels but closer than we currently stand. 

Eddie 

Going through various economic and social factors of why Prudential should invest in various countries reminds me to look at how we are doing here in the U.S. As we have learned, economies are interrelated and it’s tough to analyze US on its own, but looking over the first quarter results, economy is worse than everybody else has thought. We already feel the increase in the oil prices resulting from the crisis in the Middle East, and realize for the foreseeable future, oil will continue to be the lifeblood of the US and the global economy.

The Commerce Department revised its estimates of first-quarter GDP to show that the economy contracted at a 2.9 percent annual rate. A combination of shrinking business inventories, terrible winter weather and a surprise contraction in health care spending drove the first-quarter decline, which is the worst since the first quarter of 2009, when the economy shrank at a 5.4 percent rate. Below is a link to a short article that has further details.

Erol Menda