Ans1:
The Shift
~ Post 2008 Sub-prime crisis, Keynesian macroeconomics model entailed in the US , which is[was] based on improving the demand , which encompassed massive bond buying and cheap money quantitative easing programme.and similar Suit is followed by Eurozone and Japan. This Resulted in " Strengthening Rupee in respect to various currencies"
~Also Powerhouse of Trade China has been showing decreasing trade numbers , both in exports and imports. Such is also affecting those economies like Australia and brazil from which "raw material " was sought by china
~Now Meanwhile Commodities priced mainly energy viz oil have plummeted Hence it affected such Oil based economies. In this scenario with greater money availability in those advanced economies and lower value of Energy products have caused accumulation of Surplus viz Germany which is apprx 7-8% of GDP. From past experiences , Such surplus will be re-invested in "emerging World"
The Shift and its Meaning to India
~ Greater foreign investment
~ Well timed Diplomacy of Indian prime minister in his recent German visit
~Low Chinese trade number can help increasing Indian's export competitiveness
~ just with Conducive trade environment and red carpet and not red tape can help in gaining from this environment
~ Rupee is strengthened as a result of past quantitative easing in Advanced economies . Slight moderation and Watch over Yuan can help boost the Indian economy
Ans2:
World trade balances are in a state of flux so witnessing a shift in trading pattern. The reasons
for this trend and trend pattern can be seen as :
1) weak commodity prices, and especially weak energy prices, have hit exporters of these products hard
2) easy monetary policies and quantitative expansion programmes have caused shifts in the
balance of trade - favouring the euro zone and Japan. The euro zone now has a rising trade surplus versus the rest of the world
3) The European Central Bank's low policy rates and the massive bond-buying programme have
fuelled a lot of financial activity. European equity indices are trading at 14-year highs. Consumer confidence is apparently reviving.This made Germany, France, Italy, Spain and the Netherland to register a positive growth
4)USA trde deficit narrowed but still disquieting.
Impact on India
if advanced economies do run big trade surpluses, they will reinvest those surpluses in emerging
economies, seeking higher returns. India must certainly hope that this happens in practice, since it could be a major beneficiary.So india benefits but it has to clear up the clutter and red tape in regulations governing foreign direct investment and foreign institutional investment to ensure that any such trend can be fully exploited.
Indian rupee is strengthened in last year which has negative effect on exports.If china devaluates its yuan further rupee gets strengthens further.RBI feels that India's real effective exchange rate calculations imply the rupee is now substantially over-valued. So these two isuues ie cutting red tape and over-valuation of rupee need to be dealt at the earliest to reap benefits of changing trading trend.
Ans3:
European and Japanese economy are following the model adopted by Federal bank of USA post 2008 crisis as it has led to its recovery.
Quantitative easing and purchasing of bank has resulted into lower rate of interest and increased demand in these economy.THIS HAS LED TO balace of trade is in favour of europe with rest of the world.This has helped tremondously countries like germany which have current trade surplus of 7% of the GDPwhere as this had negatively impacted world largest manufacturer china.
The lowering oil prices have inversely impacted export of oil exporting countries.Besides,the prices of agriculture commodities are at rock bottom impacting undeveloped and developing countries.
Export in USA have also started to pick up relative to import.
Indian economy is expected to grow by 8% according to IMF estimate.Quantitative easing has led to surplus capital in developed economy.These capital will move toward emerging economy in expectation of better return.With chinese economy cooling ,indian economy can become the destination.However to capitalise from changing trade dynamics, india has to improve ease of doing buiseness and prevent strengthening of rupee.
Though goverment initiative and reform are infusing confidence among investor.Moreover government dovetailing its foreign policy for domestic economic development and replacing red tape with red carpet for investor can help india benefit from changing dynamics.Govt skill,increasedinfrasturucture spending and increasing FDI limit are step in right direction and need to be sustained.
Ans4:
Globalisation trending in the world has powerful techtonic shifts in trade patterns."the rising weight of influence of emerging economies has shifted the balance of power.some may consider it as problem but better is to take as an opportunity to look at the real shaping factors of trade.
"THE FUTURE OF MULTILATERAL TRADING SYSTEM".
FACTORS FOR TRADING SHIFT PATTERN
STRATEGIES
policies and deciscion making which is the picture of upcoming strong economy are now beyond the borders of nation state."AGE OF TRANSITION".
TRADE-TASK
the concept "made in x country"is obsolete so the new term "Made in the world" ie countries are trading in intermediates not final products.the old profit"imports bad &export good is irrelevant and economic growth increases on the basis of import to complete the export.
VALUE CHANGES-GROWTH AND JOB CHAINS
It represent dyanamic method of organising production internationally.it involves unbundling of stages of production across different countries based on their cost advancement.Service are fundamental to value chain the overgreen component. for eg transport ,distribution,insurance.value chains in agriculture as agro-foods are eg of production and distribuiton.
NON-TARRIFS METHODS
Imp factor in international production are these methods which include technical standard ,health ,saftey requirement and service regulation. which is based on transparency,coherence and capacity.
POTENTIAL IMPLICATION FOR INDIA
although India is not included in the first two mega trading blocs,all of these significantly impact india while India has signed multiple free trade and economic partnership agreement but not so outstanding.India has shown faster increase in import than export.
This trade diversion such as non tarrif methods include Indias neighbour ie Asean members and its top trading partners US AND EU.
Consumer preferences in the US ,EU'INDIAS top markets could shift towards the new regulation.
The investment components in these mega blocs may divert some funds which may come to India.
these impacts are not alltogether adverse for India. India as a member of RCEP has the opportunity to the part of mega bloc.
India has no of free trading agreements and economic cooperation agreements and is working on several,so this can moderate the neg impact.
India is huge markets for global goods and services increasing faster than other countries.it would be very difficult for other countries to take India as forgranted.
india enjoys friendly relation with foreign countries and put forwards its potential to make it place in the global trade
SO,it is not wrong to say that trade system is like multiple strands of DNA transforming day by day.....mking a great evolution in globalization
The Shift
~ Post 2008 Sub-prime crisis, Keynesian macroeconomics model entailed in the US , which is[was] based on improving the demand , which encompassed massive bond buying and cheap money quantitative easing programme.and similar Suit is followed by Eurozone and Japan. This Resulted in " Strengthening Rupee in respect to various currencies"
~Also Powerhouse of Trade China has been showing decreasing trade numbers , both in exports and imports. Such is also affecting those economies like Australia and brazil from which "raw material " was sought by china
~Now Meanwhile Commodities priced mainly energy viz oil have plummeted Hence it affected such Oil based economies. In this scenario with greater money availability in those advanced economies and lower value of Energy products have caused accumulation of Surplus viz Germany which is apprx 7-8% of GDP. From past experiences , Such surplus will be re-invested in "emerging World"
The Shift and its Meaning to India
~ Greater foreign investment
~ Well timed Diplomacy of Indian prime minister in his recent German visit
~Low Chinese trade number can help increasing Indian's export competitiveness
~ just with Conducive trade environment and red carpet and not red tape can help in gaining from this environment
~ Rupee is strengthened as a result of past quantitative easing in Advanced economies . Slight moderation and Watch over Yuan can help boost the Indian economy
Ans2:
World trade balances are in a state of flux so witnessing a shift in trading pattern. The reasons
for this trend and trend pattern can be seen as :
1) weak commodity prices, and especially weak energy prices, have hit exporters of these products hard
2) easy monetary policies and quantitative expansion programmes have caused shifts in the
balance of trade - favouring the euro zone and Japan. The euro zone now has a rising trade surplus versus the rest of the world
3) The European Central Bank's low policy rates and the massive bond-buying programme have
fuelled a lot of financial activity. European equity indices are trading at 14-year highs. Consumer confidence is apparently reviving.This made Germany, France, Italy, Spain and the Netherland to register a positive growth
4)USA trde deficit narrowed but still disquieting.
Impact on India
if advanced economies do run big trade surpluses, they will reinvest those surpluses in emerging
economies, seeking higher returns. India must certainly hope that this happens in practice, since it could be a major beneficiary.So india benefits but it has to clear up the clutter and red tape in regulations governing foreign direct investment and foreign institutional investment to ensure that any such trend can be fully exploited.
Indian rupee is strengthened in last year which has negative effect on exports.If china devaluates its yuan further rupee gets strengthens further.RBI feels that India's real effective exchange rate calculations imply the rupee is now substantially over-valued. So these two isuues ie cutting red tape and over-valuation of rupee need to be dealt at the earliest to reap benefits of changing trading trend.
Ans3:
European and Japanese economy are following the model adopted by Federal bank of USA post 2008 crisis as it has led to its recovery.
Quantitative easing and purchasing of bank has resulted into lower rate of interest and increased demand in these economy.THIS HAS LED TO balace of trade is in favour of europe with rest of the world.This has helped tremondously countries like germany which have current trade surplus of 7% of the GDPwhere as this had negatively impacted world largest manufacturer china.
The lowering oil prices have inversely impacted export of oil exporting countries.Besides,the prices of agriculture commodities are at rock bottom impacting undeveloped and developing countries.
Export in USA have also started to pick up relative to import.
Indian economy is expected to grow by 8% according to IMF estimate.Quantitative easing has led to surplus capital in developed economy.These capital will move toward emerging economy in expectation of better return.With chinese economy cooling ,indian economy can become the destination.However to capitalise from changing trade dynamics, india has to improve ease of doing buiseness and prevent strengthening of rupee.
Though goverment initiative and reform are infusing confidence among investor.Moreover government dovetailing its foreign policy for domestic economic development and replacing red tape with red carpet for investor can help india benefit from changing dynamics.Govt skill,increasedinfrasturucture spending and increasing FDI limit are step in right direction and need to be sustained.
Ans4:
Globalisation trending in the world has powerful techtonic shifts in trade patterns."the rising weight of influence of emerging economies has shifted the balance of power.some may consider it as problem but better is to take as an opportunity to look at the real shaping factors of trade.
"THE FUTURE OF MULTILATERAL TRADING SYSTEM".
FACTORS FOR TRADING SHIFT PATTERN
STRATEGIES
policies and deciscion making which is the picture of upcoming strong economy are now beyond the borders of nation state."AGE OF TRANSITION".
TRADE-TASK
the concept "made in x country"is obsolete so the new term "Made in the world" ie countries are trading in intermediates not final products.the old profit"imports bad &export good is irrelevant and economic growth increases on the basis of import to complete the export.
VALUE CHANGES-GROWTH AND JOB CHAINS
It represent dyanamic method of organising production internationally.it involves unbundling of stages of production across different countries based on their cost advancement.Service are fundamental to value chain the overgreen component. for eg transport ,distribution,insurance.value chains in agriculture as agro-foods are eg of production and distribuiton.
NON-TARRIFS METHODS
Imp factor in international production are these methods which include technical standard ,health ,saftey requirement and service regulation. which is based on transparency,coherence and capacity.
POTENTIAL IMPLICATION FOR INDIA
although India is not included in the first two mega trading blocs,all of these significantly impact india while India has signed multiple free trade and economic partnership agreement but not so outstanding.India has shown faster increase in import than export.
This trade diversion such as non tarrif methods include Indias neighbour ie Asean members and its top trading partners US AND EU.
Consumer preferences in the US ,EU'INDIAS top markets could shift towards the new regulation.
The investment components in these mega blocs may divert some funds which may come to India.
these impacts are not alltogether adverse for India. India as a member of RCEP has the opportunity to the part of mega bloc.
India has no of free trading agreements and economic cooperation agreements and is working on several,so this can moderate the neg impact.
India is huge markets for global goods and services increasing faster than other countries.it would be very difficult for other countries to take India as forgranted.
india enjoys friendly relation with foreign countries and put forwards its potential to make it place in the global trade
SO,it is not wrong to say that trade system is like multiple strands of DNA transforming day by day.....mking a great evolution in globalization
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