Trade

Global trade aims to provide unrestricted access of commodities for all nations. However, this seemingly attractive notion does not exactly correlate to fair trade practices. In an unrestricted international trade setting, the flow of commodities will have a high degree of freedom. This means that goods from highly industrialized countries can easily penetrate that of developing nations and vice versa. Although it may seem that the transactions will be fair enough, a closer look tells otherwise.

In a borderless business transaction, those corporations with the ability to spend more investments for production and logistics will be able to handle the costs of exportations. Since industrialized countries have higher purchasing power than their developing country counterparts, a very wide global market can easily make up for expenses in global trade. This is not a very positive scenario for developing countries. Since the local corporations will have a head on collision with well known and established brand names, it would be a fight between David and Goliath.

Average performing economies will tend to stretch out all their resources in order to keep up with the commercial standing of commodities from industrialized countries, leaving them at a greater risk of losing the global trade battle. Another problem with unrestricted international trade is the fact that local businesses in developing countries will not be able to sustain longer periods of competition since their own domestic consumers would prefer foreign brands. A free-trade requires less or no tariffs to be paid by exporters and importers, making highly recognized brands become cheaper than local competitors’ products (Wikipedia, 2008).

This may completely eradicate the business sector of a particular economy which will then make it dependent on the economic standing of other countries. To sum it up, unrestricted trade does not really equate to global prosperity. It can only be perceived as a capitalist’s tool which intends to expand the horizons of already strong businesses without considering the disparity between superpower and small economies.

References

Wikipedia. 2008. Free trade. Wikipedia: The Free Encyclopedia. Retrieved January 12, 2008 from http://en. wikipedia. org/wiki/Free_trade.

Economics of Europe 2013 Lecture 2: The economic theory of integration and the EX. customs union in practice This week we shall be looking at what impact the creation of the SEC/E customs union may have had on trade patterns. But first we need to remind ourselves a little about the economic theory of trade. Gains from trade Countries trade with one another either to obtain goods that for some reason they cannot produce for themselves, or to obtain goods that another country can produce relatively cheaply.

Here the theory of comparative advantage, put forward by the eighteenth century British economist and parliamentarian, David Richard (1772-1823), provides a key insight. Richard argued that even if country A can produce all goods more cheaply than country B (I. E. Country A has an absolute advantage in production), nevertheless both countries will gain from trade if each exports those goods in which it has a comparative advantage in production. To give you a very simple example: Consider two countries: Britain and America, making Just two products: pottery and grain.

Their production per man year is: Table 1 Production per man year Britain Units of Pottery Units of Grain 3 America 9 12 America can clearly produce both pottery and grain more cheaply than Britain in terms of labor input I. E. It has an absolute advantage in the production of both goods. But what about comparative advantage? Since Britain can produce either 6 units of pottery or 3 units of grain per man year (or a mixture of the two), the opportunity cost of 1 unit of pottery is 3/6 (or h) unit grain, whilst in America it is 12/9 or 11/3 units of grain.

So in Britain pottery production, in terms of loss of grain, is relatively cheaper than in America. It has a comparative advantage in pottery production. Similarly, in Britain the opportunity cost of 1 unit of grain is 6/3 or 2, and in America it is 9/12 or %. So America has a comparative advantage in producing grain. It will be to the mutual advantage of both countries if Britain specializes in pot production, and America specializes in grain production and Britain then trades pots for American grain.

By this trade the overall world production of both pots and grain increases, and both countries benefit. To show the way the welfare of a country benefits under free trade consider Diagram 1 below: Diagram 1: The Gains from Trade 2 Initially Britain is not engaging in trade, a situation known as tributary. G is the demand curve for grain and SO is the supply curve for grain (e entirely from domestic production). The initial equilibrium is therefore at X, where IQ of grain is supplied, entirely from domestic production, at price Pl .

The welfare enjoyed at this point can be represented by the sum of the consumer surplus (ii the difference between what consumers would be prepared to pay for grain and what they actually pay), the triangle DIP, and the producer surplus (the difference between what producers actually receive for their grain and the minimum accessory to induce production), the triangle SPIN. Now assume that Britain starts trading, and buys grain on the world market.

We assume (not unreasonably, given that there will be many producers all competing fiercely to sell their grain) that Britain is facing a fixed world price ‘e. A perfectly elastic world supply curve, which is lower than the market price of wheat in Britain. So at this price Britain’s new demand tort grain becomes SQ, and the quantity to grain supplied by producers is SQ. SQ to SQ is supplied by imports. What has happened to welfare? The consumer surplus has risen to DIP” But the producer surplus has fallen to SPEW. British This means there is an overall net gain in welfare shown by the triangle EX..

If there were universal free trade all countries would trade in the goods and services in which they have a comparative advantage and countries would be allocating resources to production as efficiently as possible. Trade Barriers The model above does, however, show quite clearly that trade can result in a cost to local producers of the good being imported, who must switch to some other form of production, presumably one in which Britain has a comparative advantage. This may exult in some redistribution of income in the country.

This is why it is usually producer groups who lobby for some form of protectionism, or protection from trade in their goods, by government imposition of various types of trade barrier which has the effect of raising the price of imported goods. The benefit to consumers of free trade, being more diffuse, is often less immediately apparent. The most usual trade barrier is the imposition of a tariff, or essentially a tax, on imports. These can take two main forms: a. An ad valor tariff is a set percentage of the value of the good being imported. If the international price of the good alls, so does the tariff. . A specific tariff, which is a specific amount of money that does not vary with the price of the good. Typically a cost per unit of the good. These tariffs are vulnerable to changes in the market or inflation unless updated periodically. But there can also be significant non-tariff barriers (Nets) to trade, and these can often be used to restrict trade even when there have been agreements between countries to reduce tariffs. Nets include: I. Import quotas. Quotas place a limitation in value or in physical terms on imports of certain goods for a certain period of time. 4 v’. Licenses.

These require that certain imports can only be imported ‘under license’ and these can restrict the quantity of goods, their cost, the country of origin, the customs points through which the goods are imported, etc. Use of standards. Countries may impose unreasonable standards of labeling, packaging and testing of products (often under the pretext of protecting the health and safety of the local population) in order to block sales of imports. Administrative or bureaucratic delays at the point of entry. Voluntary export restraints by certain countries in certain goods (usually negotiated between the countries. )

Currency manipulation and exchange controls. If a country is able to maintain its exchange rate at an artificially low level (low interest rates; intervention in currency markets by selling own currency, etc. ) then imports into the country will appear expensive and exports cheap. This is what China has been doing for the last few years. Exchange controls can physically limit the amount of foreign exchange available, and hence also limit imports. (UK had exchange controls from 1939 to 1979). We should note that countries can also manipulate trade and protect domestic producers by measures to subsidies their exports. 5

Returning to our simple model we can look at the effect of the imposition of a tariff, or indeed any other NTH which has the effect of raising import prices: Diagram 2: The imposition of a tariff (on grain imports into Britain) Here Britain has imposed a tariff on imported grain which has the effect of raising the price within Britain from UP to UP+T. This means that the quantity of grain demanded by consumers will fall back from SQ to SQ and the amount of wheat produced by British farmers will increase from SQ to SQ. Imports will fall back to SQ to SQ. The government will receive t(SQ to SQ) in revenue from the tariff.

What will be the overall effect on welfare compared with free trade? The consumer surplus falls by the area 1+2+3+4, but the producer surplus increases by the area 1 and the government will gain revenue from the tariff equal to the area 3. The net effect is a loss (to consumers) of the areas 2+4. So imposing a tariff leads to an overall loss in welfare. Obviously, the opposite also holds true. If Britain removed the tariff on grain, it could revert to the situation shown in Diagram 1, with an overall increase in welfare equivalent to areas 2 & 4. (This is the situation Artist and Nixon show in their diagram 3. N page 57 ‘e. The welfare gain from removing a tariff. ) Note that in this discussion nothing has been said about the response of other countries. In other words, countries do not need to wait for other countries to agree to lower their trade barriers before lowering theirs. Even unilateral reductions in trade barriers are welfare enhancing for the importing country. Global and Regional Integration Recognizing the damage done to the world economy by the rise of protectionism between the two world wars, since World War 1 1 there has been sustained global moves to remove trade barriers between countries.

These have been facilitated by the General Agreement on Tariffs and Trade (GATE), which lasted from 1947 until 1993, and its successor the World Trade Organization (WTFO), set up in 1995. According to Nell (p. 79) referring to work by the World Bank, the average level of world tariffs for all products has fallen from an ad valor rate of roughly 40% in 1948 to 7% in 2008. The term economic integration is used to describe the process by which impediments to trade like tariffs between countries are removed so that the economies of countries become increasingly interlinked.

Apart from moves towards lobar integration under GATE and the WTFO, since the asses in particular, there has been a rapid growth in regional integration, which has established numerous trading blocs of two or more countries. Trade agreements between two countries are referred to as bilateral agreements, and three or more as multilateral agreements. There are various degrees of integration within trading blocs, which collectively can be referred to as preferential trade areas (Pats). Starting at the lowest level, these are: 7 Preferential Trade Agreements.

Participating nations reduce trade barriers and so give preferential access to certain reduces traded between them. Example: Asia-Pacific Trade agreement. Free Trade Area (FAT). Member countries sign a free trade agreement which eliminates most trade barriers on most goods and services traded between them. (The distinction between a PTA and FAT is largely a matter of degree. ) However each participating country in a Free Trade Area is free to set its own tariffs with the outside world.

But varying external tariffs between countries in the FAT means that there is an incentive for all imports from outside the FAT to be brought in through the country with the lowest external riff, and then be re-exported within the free trade area to reach the final point of destination. In order to avoid this Fats often use what are known as ‘rules of origin of goods’ whereby only those goods which meet the criteria of a minimum level of local inputs or local value-added are allowed to take advantage of the free trade provisions when they are re-exported within the FAT.

Examples include: North American Free Trade Agreement (NONFAT: free trade area between the USA, Canada, and Mexico) and the European Free Trade Area (FETA) which was founded in 1960 and then comprised Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the I-J, but now is made up of Just the non-E countries of Liechtenstein, Iceland, Norway and Switzerland. Customs Union (CUE). Here member countries have a free trade area between themselves, but a common external tariff (GET) on imports from the outside world. (Sometimes different countries may still keep other trade barriers, e. . Import quotas, with the outside world. ) The common external tariff of a customs’ union marks a very important difference from Free Trade Areas since it necessitates countries ceding decision-making powers over external riffs to some central authority, and it has to have a central budgetary mechanism for handling tariff revenues. Politically this means a loss of sovereignty for the member countries, and the establishment of supranational institutions. Example: the SEC customs union created by the 8 Treaty of Rome in 1957 and completed in 1968.

As Article 23 of the Treaty of Rome stated: “The Community shall be based upon a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, ND the adoption of a common customs tariff in their relations with third countries. ” Common Market (CM). This is a customs union which allows not Just for free mobility of goods, but also of the factors of production (capital, labor, and technology) across the borders of member countries.

Within Europe, the intention to create a common market was enshrined in the Treaty of Rome but given a legislative boost by the Single European Act of 1986 to be completed by 1992. Economic Union (CEO) is a common market plus the complete unification of monetary and fiscal policies. This entails the establishment of more central supranational iodides like a Central Bank, Central Tax Authorities, etc. The seventeen countries in the Rezone, established by the 1992 Treaty of Machinist which established the Euro and the European Central Bank, are getting close to complete Economic Union.

They have monetary union, but do not yet have fiscal union. However in March 2012 all members of the ELI, apart from the Czech Republic and the I-J, signed the European Fiscal Compact, the intention of which is to implement stricter caps on government spending and borrowing and automatic sanctions tort countries breaking the rules (we will look at this more in Lecture 7). A Political Union (PIG) is when the nations become literally one country, with one government, as happened after the unification of East and West Germany. As we have seen, this was always the final goal of the original architects of the ELI.

Trade creation and trade diversion Preferential trade arrangements, like the EX. customs union/single market, appear to represent a move in the direction of free trade. If, as we said earlier, free trade is economically the most efficient policy I. E. It is a first-best’ situation, then it might be assumed that moves in the direction of free trade represents a move towards this first-best solution. Work by the Chicago School economist, Jacob Vainer (The Customs Union Issue, 1950), however, shows this is not necessarily so as a customs union may also be a move towards protectionism. Vainer was a Canadian, and it seems that his work on this issue was prompted by his thinking about the effects of the Canadian federation, a customs union. ) The example below illustrates this. When we looked at the welfare effects of free trade, or of removing a tariff in Diagrams 1&2 above there were effectively only two trading partners: Britain and the rest of the world. In a customs union, however, there are at least three countries involved: 2 members of the customs union and at least one other country outside the customs union. This extra country is added in Diagram 3 below.

Let us suppose it is France. 10 Diagram 3: Trade Creation and Trade Diversion within a customs union The above diagram describes a situation where there are three countries, Britain, France and America. Before the establishment of a customs union, Britain has a tariff on all grain imports making the price of grain from France IF+T and from America PA Since, even with the tariff, grain from America is cheapest, Britain will import SQ to SQ quantity of grain from America. Britain now forms a customs union with France, which means that import tariffs on French grain are removed.

The cheapest grain to buy now is French, so imports will increase to the quantity SQ to SQ. The overall welfare consequences of the creation of the customs union, compared with the situation before, is: the consumer surplus has risen from area DOPY+T to DXL. (e. An increase of the areas 1+2+3+4) 11 the (domestic) producer surplus has fallen from SPA+T to SWAP (ii. A fall of area 1) What about revenue from tariffs? This tariff has fallen by T(SQ-SQ) ‘e. A fall of areas 3+5. So the overall welfare consequence of the formation of the customs union is an increase in welfare of areas 2+4 and a decrease of area 5.

Following Vine’s work, areas 2+4 are referred to as the trade creation effect. It is a free trade effect brought about by abolishing the tariff within the customs union, so allowing the import of goods from another member of the customs union which can be produced more cheaply than domestically. This will lead to greater specialization of production between member nations based on comparative advantage. The decrease in welfare of area 5 is the loss of welfare brought about by trade version. It is a protectionist effect.

Because the customs union has maintained tariffs with the rest of the world, the demand for imports is met by the relatively high- cost producer within the trading bloc, rather than the lowest-cost producer on the world market. So what can we say about the overall welfare effect of the creation of a customs unions/ If area 5 is less than 2+4 there will be an overall welfare gain. If area 5 is greater than 2+4 then there will be an overall welfare loss. If area 5 is equal to 2+4 then the welfare effect will be neutral. Since general predictions of the welfare effects of introducing a customs union are impossible in advance, ii. Hey will depend on the actual situation, this is known as Vine’s ambiguity. There has been a move from one sub-optimal (ii. Non free trade) situation to another sub-optimal situation (still non free-trade). You cannot clearly say whether there has been a welfare gain or a loss. A different and possibly more elegant diagrammatically way of looking at trade creation and trade diversion is given in Diagram 4 below (see Artist and Nixon, p. 58). In order to simplify, the separate demand and supply curves for grain of Diagram 1 re replaced by the import demand curve for grain, defined as domestic demand minus domestic supply.

The world price of grain is UP’ as before, but there is also grain now available from France at a somewhat higher price Pu. (We assume for simplicity that, as with the rest of the world, the supply of grain from France is infinitely elastic, so the price will not change with supply. ) Diagram 4: trade creation and diversion within a customs union 2 The situation before the formation of the CUE assumes as before that Britain has a non-preferential tariff on all imported grain at rate t, which means that the price of rain from France is Pu+t; and the price of grain from the rest of the world is Up+t.

Initially, then, the equilibrium is at f with all grain imports (mm) coming from the rest of the world as they are cheaper than French imports. But if Britain and France now enter into a customs union, so Britain removes the import tariff on grain from France, grain from France is now available at price Pu, which is below P’. +t. So the new equilibrium is g, where Britain imports mm ‘of grain from France. As far as welfare effects are concerned, consumers have gained by an amount equal o A+C, but there has been a loss in tariff revenue to the government (A+B).

This gives a net effect of C-B. The area C is the trade creation effect. The area B is is the trade diversion effect. Britain did in fact experience both trade creation and trade diversion after Joining the SEC in 1972. As a result of the SEC customs union it began to benefit from freer trade with its new European partners, but because of the SEC common external tariff it had to start paying more for many of its imports from the rest of the world, particularly those from former Empire or Commonwealth countries (egg. Lamb and butter from New 13

Unemployment does not target all workers equally. Instead, unemployment is concentrated among particular demographic groups and among workers in specific sectors of the economy. Above all, a specific fact has been reported in several studies in labour economics: the unemployment rate is everywhere much higher for less educated workers. In 1998, in the USA, the unemployment rate of college graduates was only 1.8 percent, as compared to 4.0 percent for high school graduates, and 7.1 percent for high school dropouts (Ehrenberg & Smith, 2008).

The “unemployment gap” across education groups widened substantially in recent decades. Always in the USA, in 1970, the unemployment rate of high school dropouts exceeded that of college graduates by only 3.3 percentage points. By 1998, the gap was over 5 percentage points. Part of the increase in the unemployment differential across skill groups occurred during the 1980s, a decade that also witnessed a significant increase in the wage gap between skilled and unskilled workers (Cahuc and Zylberberg, 2004).

This significant benefit of education – lower risk of unemployment at higher educational levels – has been at the centre of a number of studies, whereby labour economists have attempted to spot and examine the reasons from which it originates. The essay will briefly review the main findings of the above-mentioned research. In order to achieve a better level of clarity it will be divided into two major areas.

Firstly, a microeconomic view, based largely on the pivotal work by Jacob Mincer “Education and Unemployment” (1991), will be presented. Secondly, I will focus on the macroeconomic analysis of the issue; the two most important works I will make use of in this second section are “Globalization and the Rise in Labour Market Inequalities” by Adrian Wood (1998), and “The Assessment: Globalization and Labour Market Adjustment” by David Greenway and Douglas Nelson (2000).

On the microeconomic side, the analysis is facilitated by a decomposition of the unemployment rate in two parts: the unemployment incidence, namely the probability of leaving employment, and the duration of unemployment, that is the probability of leaving unemployment (Mincer, 1991). The first thing to notice, as underlined by Mincer and others, is that duration of unemployment is a relatively minor aspect of the educational unemployment differentials. Previous research (Ashenfelter, 1979) show that incidence of unemployment is 170% greater, but duration only 30% greater, in the least educated compared to most educated workers.

A first reason why education implies lower unemployment rates lies in the positive relation between education and on-the-job training; the latter, in turn, clearly negatively related with unemployment (Mincer, 1991). But why do more educated workers engage in more on-the-job training? The logical answer depends upon the fact that more educated individuals have greater learning ability and can acquire human capital at lesser costs. Hence, they will invest more in all forms of human capital, including education and job training. Moreover, for similar reasons, it must be noticed that education enhances the productivity of job training at work.

Another reason regards the negative relation between turnover (which is fundamental in our analysis because it is an important component of unemployment incidence) and on-the-job training. In this case, skill specificity is the central concept. Training which enhances skills and productivity in the firm is not fully transferable to other jobs in other firms. As a result, workers who acquire large volumes of training on the job are less likely to move from one firm to another. Likewise, employers are less likely to lay off such workers if they share the costs and returns to training (Ehrenberg & Smith, 2008). We can conclude by stating that, due to the previously examined positive relation education-on the job training, there is a comparable negative correlation between education and turnover.

In addition, Mincer (1991) highlights the influence of education on labour mobility. In his opinion, a possible explanation for this is that firms with high fixed labour costs (i.e. costs of screening, hiring, fringes etc.) will aim to cut these costs by reducing turnover. To achieve this objective, they will select more productive, capable and stable workers. Hence, in substituting quality for quantity of employment, such firms tend to hire a larger proportion of better-educated workers (Mincer, 1991). Yet, another possibility can simply be that more educated individuals are more efficient in job matching. In sum, more educated workers engage in lesser job mobility, especially in local markets. Nevertheless, there is an exception: geographic mobility is greater for better-educated workers.

Now, in order to thoroughly explain the lesser incidence of unemployment of educated workers and the somewhat lesser duration of their unemployment, I will shift the focus on job search behaviour of workers and hiring effort of firms, and I will concentrate more on the situation of job changers. Firstly, it is necessary to realize that job search of workers takes place both while employed and while unemployed, and that the more educated are more likely to search on the job rather than off the job. The principal reason for this is that, for better-educated workers, the cost of off the job search is relatively higher than that of on the job search (mainly because of larger forgone earnings) (Mincer, 1991). Consequently, this deeper search results in a smaller probability of unemployment.

A further explanation is that better-educated workers are also more efficient in acquiring and processing job search information, particularly if they are more likely to receive advance notices of layoff (Ehrenberg & Smith, 2008). As far as the firms are concerned, they will search with greater intensity for more educated workers, because the costs of unfilled vacancies for skilled jobs, in term of forgone production, are clearly higher (Mincer, 1991).

All the above-discussed reasons explain the more successful on the job search of the more educated workers. However, efficiency of search is not the only factor affecting duration of search unemployment. Three other factors: opportunity costs, the rate at which the future is discounted, and the expected length of the payoff period, that is the duration of stay on the next job, have conflicting implications for the duration of search (The Handbook of Labour Economics, 1986).

This brief microeconomic analysis of the relation between education and unemployment does not certainly contain every aspect related to it. The problem is that, despite the immense literature available on the wage structure by education, much less research is devoted to mobility and unemployment aspects of education. Let us now move on to the macroeconomic view of the issue. The deteriorating position of low skilled relative to high skill labour, measured either in terms of a decline in the wages of the least qualified section relative to the most skilled, or in terms of the relative likelihood of their being in work, has recently stimulated a strong interest in globalization and labour markets. The attention has been mainly drawn to the roles of trade, in particular with low-wage economies, as a proxy of globalization, and technology, in particular skill-biased technical change.

An important factor-content analysis, emerging from the labour theorists’ traditional approach, deserves particular attention. A convenient approach, based on a partial equilibrium framework, involves assuming a downward-sloping demand for labour and a vertical supply curve. The labour content of trade can be added to domestic supply, thus shifting the supply curve and permitting identification of the effect of trade on the wage (Greenway and Nelson, 2000). An important proponent of this method is Wood, who published in 1994 the book “North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-driven World”, considered a primary stimulus to research.

A further prominent work is the one by Sachs and Shatz (1994), who present one of the most detailed factor-content studies of trade, disaggregating by sector and trading partner. Nevertheless, the initial response by trade economists to this approach was overwhelmingly negative as, in a competitive environment (in primis, the Heckscher-Ohlin-Samuelson type), factor-prices can change only if commodity prices change (Greenway and Nelson, 2000). These studies are directed to the wage skill premium, but they can be similarly referred to the unemployment skill gap.

This contract was signed during the Constitutional Convention. The aim of the agreement was to protect the slave holders. The compromise included cancelation of the rule to tax the exports of products from any state as well as the rule to act on the slave trade.

According to the recent news reports, it has been seen that Turkey has facing some of the serious corruption scandals and other allegations against governments. These scandals creates riots and protests In every cities of turkey ,moreover many high class people and political leaders were accused with money laundering, gold smuggling and bribery. The current situation’s impact was reached Turkey’s international relation with other countries and put their aids at stake.

Another challenge turkey was facing is Labor market. Turkey has a large population and In that about 68. 1% are working age, but In that economically active are 51. 3% in 2013 reports says. This is mainly due to several factors which includes low participation of female with only 32. 9 percentage of the working age women. Second factor Is, Turkey’s grey economy is very large and the Council of Europe has been expected about 33 percentage of GAP In 2011 and many of the Jobs are formal sector in outside.

The unemployment of youth is also a major challenge in turkey’s progress, although it is not unique to Turkey and about 17. 3 percentage nouns people were unemployed as per 2013 report. It is considered that turkey Is one of the world’s 10 largest economy In 2023 but now the lack of potential and political issues creates regression to its wealth. Turkey is one of the most important countries in the Middle East which is equal to Egypt and at the same time it has a very powerful military and a fastest growing economy.

Turkey’s services has been serves as a bridge between the East and West. The U. S. And European powers need Turkeys support In order to Implement Middle Eastern politics and to malting the Syrian conflict. Generally turkey’s connection with outside world was very important in every terms like trade, economic and military. This relation not only helpful to turkey but to other countries. Turkey has biggest trading partner in E ( The European union ) and Its trading accounts are more than 50 percentage of Turkish exports.

For northern Iraq turkey is the largest investor, and these investments and development from them have helped to stabilize this part of Iraq. Turkey is also a major investor in Central Asia and its construction companies can be found at work in many parts of the world. Turkey Is also an Important link between Islam and the West and will likely formed for about many decades and if so to come. Turkey is both east and west and can communicate clearly and effectively in both directions, and also from North to South.

Turkey has been a very cooperative country to the Americans to fight against the terrorist activities In our globalization. After the sass’s, Turkey anta terrorist activities were bayed very helpful in global reformation to the world and this makes turkey as major targets for terrorists also. At the same time Turkey is also a power resource for the Americans from middle east. Power is a vital element for the progression of every country and for Americans this vital element Is turkey. In my perception It Is very important for Turkey to Join with ELI to protect the long- term interests of its nation and people.

Mainly there are many reasons behind it and 1 OFF same time it was also a very member of North Atlantic Treaty Organization (NATO) which plays an increasingly vital regional role in the broader Middle East. This relation not only increase the progress of turkey but to reduce the burdens of US and international problems. This will help the Turkey to become more powerful in the globe by the process of designing and creating its future in a industrialization and modern way. In the past Turkey has important position among other countries.

In the upcoming year we can see that turkey with become a developing nation after 2016 by the aid of allies and their relations. Turkey literally serves as the bridge between East and West. About 50 percentages of Turkeys trade is with the EX. (European Union). In 1920, the great reformer, Mustang Kamala Taurus emerged from he chaos of World War I to establish modern Republic of Turkey in order to transform several political transitions and development initiatives leading to its position as a growing economic power.

Taurus understand that an integrated nation was essential to building new state. Turkey’s push to Join the EX. has limited the power of the military. In his regime new progressive actions were implemented to improve turkey, like Religious schools were abolished and Suffix religious orders were closed. By 1934 women were granted the vote in national elections and were able to stand for election and be seated in parliament.

Logistics Management Due Date: Word Count: Abstract This essay investigates the Port of Long Beach (POLL) with the aim of identifying the business and marketing environment and ascertaining its major marketing opportunities, threats, strengths and weaknesses.

Based upon this internal and external environmental evaluation, the up’s of the extended marketing mix are analyses in relation to Poll’s current marketing strategy. Finally, suggestions on how Improvements to Poll’s marketing strategy, with specific reference to the analysis of he extended marketing mix are proposed and the impacts of such suggestions are detailed. Research comprised of academic literature, Industry Journals, reports and websites In relation to the organization Itself and Its affiliates.

What was found was that the Port of Long Beach’s key marketing strategies were based upon environmental stewardship, community, Industry and government relations, Infrastructure and transportation, trade and commerce and organizational effectiveness. It was also recognized that the marketing strategy that POLL employ Is highly sophisticated, covering all facets of the extended marketing mix. Poll’s facilitating effective delivery of service to their major customers, East Asia, which accounts for 90% of its throughput.

POLL was analyses and segmented according the up’s of the extended marketing mix. Its key marketing strategies included environmental stewardship, community, industry and government relations, infrastructure and transportation, trade and commerce organizational effectiveness. POLL have focused this strategy, in conjunction with partnerships on their customer base, primarily East Asia which accounts for 90% of trade and also consumers within its local hinterland. Finally, changes to Port of Long Beach’s marketing strategy are put forth and also the potential impacts of such changes are detailed.

Table of Contents Abstract Contents Price Process Evidence Introduction ii Table of iii Introduction 1 Task 1 1 Task 2 3 Product 4 4 Promotion 5 People 5 6 Physical 6 Task 3 7 Conclusion 8 References 10 The rise of globalization and subsequent increased freight volumes has required seaports to become customer-focus oriented, proactive and adaptive in a highly competitive freight market, encouraging trade facilitation both within the port wrought its logistics and supply chain and internationally (Cannon 2004), (Cannon 2008), (Strategic Plan 2009).

It follows then that seaport marketing must also develop and adapt in order to create value and also customer satisfaction. This essay will investigate the Port of Long Beach’s (POLL) overall business from a marketing perspective, profiling the industry, the markets within the industry, its customers, this evaluation, the up’s of the extended marketing mix are analyses in relation to Poll’s current marketing strategy. Finally, suggestions on how improvements to Poll’s marketing strategy, with specific reference to the analysis of the extended marketing mix are proposed and the impacts of such suggestions are detailed.

Task 1 Summaries key organizational and marketing information from your Assignment 1 Case Report, in order to provide the context for your response to Questions 2 and 3 below. Pollinator & Khakis (2011) suggests that When shippers are confident about the volumes of cargo they will need to move or they feel that transport is of too great strategic importance, they may decide to take the shipping risk themselves’. Whilst POLL do possess fully automated facilities, they do not do so in partnership with any major shipping lines.

The absence of any major partnership agreements has left the door open for POLL to sign such agreements with Orient Overseas Container Line (COOL) and Mediterranean Shipping Co (MASC.), ensuring that the majority of all cargo owned by MASC., COOL and their alliance partners will now pass through Poll’s terminals and not Poll’s (Porter 2013). The impact of the partnerships has been immediately reflected through a 10. 1 percent increase in container throughput in the second quarter of 2013, which simultaneously saw a 9. Percent decrease from POLL (Canada, California Ports Grow West Coast Market Share 2013).

Newly developed on- dock rail facilities, gray chassis pool and Green Port Gateway have greatly improved the ports competitiveness and efficiency whilst allowing for greater network connectivity through to east U. S. As far as the Ohio River (Port of Long Beach), (UNCLAD 2013). Kettle, Brown, Burton, Deans & Armstrong (2013, p. 243) states ‘Business buyers are influenced heavily by factors in the current and expected economic environment’. This statement has never been more evident than in hipping following the Global Financial Crisis (SGF) in 2008/2009 and more recently the European debt sovereign crisis.

Subsequent austerity measures have seen a shift in trade routes from Asia to Europe now heading to the west coast of the U. S. , placing POLL and POLL in primary position to receive increased volumes of cargo (UNCLAD 2012). POLL is aware of its impact on the environment and have answered with their award winning Green Port Policy, which seeks to reduce and eliminate the pollution generated by the port. POLL wish to not only be the busiest and most efficient port in North America, but also an environmental innovator and leader (Port of Long Beach 2013).

Critically evaluate the marketing mix of your chosen organization, using relevant marketing theory. The advent of globalization and the subsequent increase in seaport competition has required seaports to differentiate their product through the provision of value-added services and continually evolving marketing strategies (Cannon 2004). Port of Long Beach’s key marketing strategies were based upon environmental stewardship, community, industry and government relations, infrastructure and transportation, read and commerce and organizational effectiveness (Port of Long Beach 2013).

PRODUCT The product of a port can be separated into its core product and its actual product (Kettle, Brown, Burton, Deans & Armstrong 2013). POLL seeks to create value and competitive advantage through its complex and highly integrated service offering, enabled through its cargo handling services and value-added services. POLL possess both dedicated container and bulk cargo terminals, with supply chain capabilities that allow network access as far as the Ohio River.

Network connectivity is enabled pacifically through on-dock rail, across 10 piers and 80 berths that are serviced by 66 post-Panamas gantry cranes, allowing for efficient transshipment and storage of cargoes. Channel and berth depth have been deepened in order to accommodate many of the larger container vessels capable of carrying 13,000 TIES. POLL encourages trade facilitation through its harbor services, tug/towing, piloting, consulates, marine surveyors, U. S. Customs, freight forwarders, customer brokers, and shipping agents.

Supporting services such as waste disposal, medical facilities, tortes and bunkering are also available. Additionally, POLL provides value-added services such as cold storage and bonded warehousing (Port of Long Beach 2013), (Strategic Plan 2009). PLACE Place of the product involves company logistics and marketing activities concerned with delivering the company’s service. A ports location is imperative to its ability to attract and retain customers. POLL is situated in the heart of the most populous extensive hinterland access, allowing it to be served by 140 shipping lines with connections to 217 seaports.

Poll’s location and network connectivity allows for the shiest chance of frequency, reliability, profitability and relative convenience. High traffic volumes of its major competitor and harbor neighbor, POLL, results in increased traffic flows and congestion that would otherwise belong to POLL, however POLL is able to reduce this effect as five of Poll’s container terminals are connected with on-dock rail facilities, that increase the efficiency of traffic flow and reach of the port past the immediate through to the extended hinterland in the east U.

S. (Cannon 2008), (Kettle, Brown, Burton, Deans & Armstrong 2013) (Port of Long Beach 2013), Strategic Update 2009). PRICE Price is the amount of money the customer has to pay to obtain the product (Kettle, Brown, Burton, Deans & Armstrong 2013). It is difficult to compare port tariffs among ports accurately because of diversity in their systems and regulations, the existence of pricing by long-standing agreements and the influence of the exchange rate. This is indicative Poll’s Tariff No. , which continually states that tariffs and charges are assessed in accordance with and based upon each and every of the limitations, agreements, covenants and conditions set forth’. POLL, however, does adopt a mix of efficiency pricing and relationship pricing, as each strategy is specifically applied to the type of customer and relationship. Efficiency pricing applies to customers requiring the lowest available prices. This pricing strategy is more applicable to short-term transactional based customers. Relationship pricing is offered to those that are either profitable in the long-term or have the clear potential to grow.

Port charges encompass navigation, berth and cargo operational services, all of which are either based on size of ship, time in port or size/volume of cargo. Other business related costs include real estate, licensing and management services incurred from or by port-related services (Berry & Hydra 1996), (ESCAPE 2002), (Port of Long Beach 2013) PROMOTION Promoting a port is suggested as being a means of communicating with current and potential customers, with its purpose being to raise awareness of what the port offers and to influence customer attitudes and behavior towards the port (Bernard 1995), (Somers and De Wiled 1997).

POLL seeks to promote itself through the development of a positive brand image, conveying network connectivity, sailing frequency, liability, service quality and professional management (Branch 1998), (Port of Long Beach 2013). POLL has formed partnerships with leading European and Asian shipping companies, each of which are part of shipping alliances that allows it to promote its services globally (Porter 2013). POLL further promotes itself through its website, annual reports and strategic plans, outlining its clear directive for the future, one that balance their role as a facilitator of international trade with our strong partnership.

PEOPLE Cannon (2008) states ‘Establishing a relationship with a customer and building loyalty emperies two parts, the initial marketing to attract the right relationship over time so that the financial and other objectives of both parties are achieved. ‘ It follows then that marketing communications play an important role in customer relationship management. POLL have a clear focus on employing talented and motivated people, with the aim to empower them at all levels that encourages them to develop and enhance the relationship in order to maintain customers. Gumminess 1994), PROCESS Customers migrate to other service providers when the process is poorly managed and lets them down (Kettle, Brown, Burton, Deans & Armstrong 2013). In order to lessen the risk of losing competitive advantage, customer relationship management within ports has evolved into the development of partnerships. Decisions by POLL marketing and management are indicative of this evolution with the recent contractual arrangements with COOL and the subsequent development of Terminal Operating Shipping Lines (TOSS).

Vertical integration allows COOL to exert market power through upstream or downstream integration, whilst POLL benefit from the resultant higher volumes of cargo and technologically advance cargo systems, improving service delivery (Bishop 2009) (Porter 2013). PHYSICAL EVIDENCE Services are mostly intangible. Thus the meaning of other tools and techniques used in marketing is important as customer tend to rely on physical cues to help them evaluate the product before they buy it (Kettle, Brown, Burton, Deans & Armstrong 2013) (Marketing Teacher 2013).

POLL and the local government have both invested heavily in regards to the internal and external environments resulting in aesthetically pleasing views both inward and outward from the port. Restaurants, tourist shops, parks, bikes and public transport facilities lie directly adjacent and opposite POLL, increasing the ports community integration and acceptance. Such external projects, matched with modern, sophisticated internal infrastructure projects are becoming increasingly attractive to all stakeholders and customers, as POLL leads the way in efficiency and environmental stewardship, both domestically and internationally.

How could your chosen organization improve their marketing mix in view of the evaluation you conducted and the strategies you recommended in your Case Report? Whilst POLL have invested heavily in their own employees and long-term customers, it seems that they could do more in relation to the greater public. The greater public, whilst benefiting from increased trade volumes, efficiency, environmental standards and community-friendly amenities, are not utilized in their full capacity. Increasing public involvement within the port has many benefits and repercussions, should issues arise.

Cannon (2008) propounds that port developments are hampered by community concerns and the need for environmental performance, which is mirrored by Giuliani & O’Brien (2008) who state that citizen concerns about ports environmental impacts shape public policy, which can lead to policy intervention and increased costs or loss of customers. Increased involvement allows the public to take a vested interest in the operations of the port, boosting public perception, thus allowing for greater public investment and increased brand image, greatly reducing the potential for public backlash should negative publicity in regards to the port arises.

The development fully automated facility in conjunction with private investors, MASC., COOL and their alliance partners, could discourage competing shipping lines, not involved in such alliances from investing in POLL, and in some instances lead to discriminatory treatment. Bishop (2009), states ‘Ports and ocean carriers may also get onto conflict because of resource scarcities, for instance when dedicated terminals are allocated to a single shipping line, hence pushing other carriers to operate via ports elsewhere’.

POLL could adjust their strategy in relation to such firms by taking them from transactional based customer and developing customer relationships. Whilst this strategy may not be applicable to all smaller sized shippers, it is through the development of relationships with medium to larger sized shipping lines, not a part of shipping alliances, where POLL could increase market share whilst at the same time decrease POI-As competitive advantage. The U. S. Has replaced Europe in relations to exports, however the increased volumes can have both a positive and negative effect on hinterland connections with the rest of the U.

S. The development of infrastructure and processes within the port are only as effective as its network connections with the hinterland. Ensuring network inevitably improve its perceived port efficiency to an Asian, global and domestic markets that demand it. Although rising cargo volumes can create congestion within the vast networks connecting POLL with its hinterland, an opportunity lies within to market to major injecting intermediate and multimedia firms.

Forming alliances or partnerships with such firms could secure reliability through the supply chain into the future and in turn reduce costs to importers, increases perceived reliability in the Asian market and also increases appeal and potential for importers to utilities the facilities POLL has to offer. The promotion of high efficiency and reliability to the East Asian consumer base that accounts for 90 percent of Poll’s container throughput could prove the difference in perceived competitive advantage, resulting in cargo volumes transferring from POLL to POLL. Conclusion

The Port of Long Beach and the way in which the extended marketing mix have shaped its marketing strategy has been analyses. POLL was found to be in a highly competitive environment, specifically due to the close proximity of its larger rival, POLL. In order to regain competitive ground, POLL have entered into partnerships through the signing off long-term lease with a major shipping line COOL and allowed further private investment from MASC., in order to achieve better economies of scale, improved operational efficiency and better asset utilization to sure up profitability.

This matched with newly developed, environmentally sustainable infrastructure, will enhance its capability to capitalist on shifting trade routes from Asia to the U. S. Then the marketing strategy of POLL was analyses and segmented according the up’s of the extended marketing mix. Its key marketing strategies included environmental stewardship, community, industry and government relations, infrastructure and transportation, trade and commerce organizational effectiveness.

POLL have focused this strategy on their customer base, primarily East Asia which accounts for 90% of trade and also consumers within its local hinterland. The up’s; product, place, price, rumination, people, process and physical evidence were individually analyses with specific reference to POLL and its stakeholders including its customer base and POI-A. Lastly, three suggestions as to how POLL could improve aspects of their marketing mix in view of the evaluation conducted are provided.

TK Maxx

TK Maxx is a relatively new arrival in the UK. Their parent company TJ Maxx has been operating in the United States since 1976 and the first UK store was opened in 1994. The company was renamed TK Maxx in the UK in order to avoid confusion with TJ Hughes. Its business model is that of an “off-price” department store, which means that it will buy excess stock from major department stores and other sources and sell it at discounted prices. Naturally, TK Maxx can also benefit from the global buying power of its US parent company. The value clothing market has grown strongly in recent years and companies like TK Maxx, Primark and Matalan have all seen substantial growth in recent years. Some commentators feel that as discounters, they are equally well placed to take advantage of any reduction in consumer spending which may result from measures taken by the incoming government to reduce the budget deficit.

They stock a wide range of designer brands at discount prices and their products appeal mainly to buyers in the 18-35 age group. Even so, some feel that the company has moved a little way upmarket to try and challenge some more traditional retailers such as NEXT, and many stores have been refurbished while some much larger ones have opened in a department store format. In addition, six Littlewoods stores were acquired in 2004. The rise of TK Maxx in the UK has not however been without problems. Hackers stole information of approximately 45 million payment cards from used by customers in the UK, United States, Puerto Rico, and Ireland. The hacking started in 2005 and data on transactions conducted between 2002 and 2005 was accessed. The effect of this theft on UK customers has at least been mitigated by the introduction of chip and pin technology. In addition, TK Maxx was blocked from moving into a store vacated by Zavvi in the Regent Street area of London. The reason was apparently that the owners of the property felt that the area was inappropriate for the TK Maxx brand. However, generally speaking, TK Maxx has been a success story in the UK and a further sales channel was introduced in 2009 with the introduction of online shopping.