Problem 22: Discuss the strategic marketing implications of NAFTA.
All developing countries focus on the objective of industrialization in their country (Cateora Graham & Gilly, 2011). NAFTA has also been seen as an industrialization opportunity by Mexico. It has been seen as an opportunity to attract the investors from USA and Canada, who are the other partners in NAFTA. NAFTA would definitely have an impact on many strategic issues in its member countries. The aim of NAFTA is to eliminate total duty on up to 50% industrial goods imported to Mexico from the US within 10 years of its implementation. Within 15 years of its implementation, 100% goods would become duty free. The same way all trade would become duty free between Canada and USA.
Problem 24: NAFTA has been in existence for several years—how has it done? Review Exhibit 9.6, which discusses the initial provisions of the agreement, and, using the Internet, evaluate how well the provisions have been met.
NAFTA has been in existence for a shorter time if we compare it to the existence of unions like EU that has existed for over 50 years. Therefore we cannot pass judgement on its durability. But still there are indications that it has been progressing in a positive direction. According to Exhibit 9.6, the per capita income levels at purchase price parity have steadily increased in all three countries: from $7,110 in 1994 to $14,270 in 2008 in Mexico; $21,050 to $36,220 in Canada; and $26,230 to $46,970 in the United States during the same time period.
Different provisions of NAFTA have been differently measured. According to research, the provision for the national treatment of investment has affected the labor demand in the US (Cruz, & Riker, 2014). The Mexican government also retains its monopoly on investment in the energy sector under the provision of NAFTA that gave them the power.
Problem 8: What are the political issues swirling around the strong trade relationship between the U.S. and the PRC?
There are many political issues swirling around the strong trade relationship between the US and People Republic of China. A few of them are as bellow:
- Chinese concerns about the US arms sale to Taiwan.
- China is investing enormous amount of its GDP in military purposes. USA doubts their intentions while China say they are for peaceful purposes.
- China has been accused of dealing with states that are considered to be in violation of human rights on state level. North Korea is one of them.
- USA complains about the censorship and copy right situation in china.
- China blames USA to interfere in its internal affairs.
Problem 10: Should the United States fear China’s emergence? Why or why not?
History teaches us that there were political doubts about the influence that Japan had gained from the economic interdependence of Japan and America but they faded away and had no base in reality.
Presently there are the same worries that exist in the minds of Americans in relation to US, PRC economic independence. China has emerged to be a great economic poser. In my opinion USA should fear Chinese emergence. China is a totally different case than Japan. Japan is a small country with less population while China is one of the most populated country in the world with its citizens residing all around the world. China is active in the world politics and reserve a veto power in the UN. Chinese industrial reform has provided its industry to grow rapidly Rawski, 1994). Chinese economy is growing and they are gaining a monopoly on many industrial goods in the international market.
Problem 17: Discuss the importance of international business services to total U.S. export trade. How do most U.S. service companies become international?
International Business Services is one of the fastest growing business sector in the world. It is estimated to be over 650 billion USD in volume all over the international market. It is also important to US exports. US has a 35-40 percent share of the international business services. This figure explains the importance of International Business Service to the total US export.
US service companies initially reached out its American customers residing in the international market. With time these companies has gained enough experience to deal with customers from the local market. And hence they were successful in attracting local clients with whom they expanded their business.