Case Study: European Union (EU)

EU Economy
The process of framing EU policies focus on its capacity to respond to global challenges. The single market benefits from high-quality and transparent rules that make it possible to benefit from economies of scale. Competition in single market encourages businesses to provide high-quality products. EU does not rely on single mechanism to tackle trade barriers. EU’s multilateral cooperation is strengthened by bilateral Free Trade Agreements with ASEAN, Korea, India, the Andean and Central American countries.

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Snapshot: US Wheat Export

Wheat Export Import
US exports more wheat than any other country in the world, with an average of 24% global market share. In the fiscal year 2006, America produced 57 million metric tons of wheat, out of which total US consumption was about 31 MMT and 27.5 MMT was exported. In the year 2007, the global wheat production dropped about 5 percent to 593 million metric tons (MMT), and consumption continuous to exceeded production since last seven years. The wheat trade dropped by 7 percent to 107 million metric tons (MMT) (3,946 million bushels). Canada has recently increased its share to 18 percent and Australian share has dropped to 8 percent.

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US Economy: The Obama Factor

Barack ObamaThe overall U.S. trade deficit shrank by 5.68 percent in March 2008, falling to $58.21 billion from the adjusted February 2008 level of $61.71 billion. Exports fell by 1.71 percent, to $148.51 billion, for the first time since January 2007. Imports dropped by 2.86 percent, to $206.72 billion. The fall-offs were especially sharp in goods trade – where exports sank by 2.37 percent, to $104.73 billion, and imports declined by 3.36 percent, to $173.34 billion.

The prediction markets forecast a Obama presidency in 2009. The most important and most immediate impact of a potential Obama win would be in the area of foreign policy. The Bush doctrine increased the price of a barrel of crude oil. The troubled U.S. relationship with oil-producing nations Venezuela, Russia and Iran in particular added atleast $20-$30 premium in the per barrel oil price. Lower oil prices and the consequent moderate increase in energy demand domestically, could help reverse another long-term trend: the weaker dollar. U.S. energy imports are running 30-40% of total imports. If the U.S. imports less oil or pays less for the oil that it does import, the trade deficit will improve, increasing the demand for dollars.

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