Report Title: Reflection on International Trade (MIT: M018CL)
Lecturer and Tutor: David Tan Jun An.
Submission Date: 10 Oct 2019
Submitted by: Wong Seng Kwong SID 8090658
Contents
Executive Summary
This Module has given me a very good introduction to the history and the mechanism of the World Trading System from the Uruguay round GATT to the Present WTO since 1995. The FTA Free Trade Agreement, RTA Regional Trade Agreement, Bilateral, and Multinational Trade Agreement have a great impact on the Economy and Sustainability of our world. With the USA Trump administration blocking the FTA and making Tide war with China and with other countries post a great Risk to the GDP of many countries. The USA has not sought friendship with Iran and China which causes worries and unrest to ASEAN, ASIA and another part of the world. However, this reflection reports will not be discussing the world issue currently on media and newspaper but to only focus on what has been taught and how is the experience and group condition and own contribution to the group work on the DEBATE and BOARD REPORT. Although this report is 10% of the whole Assignment, it should reflect that the knowledge thought in class and self and group research are not go to waste.
Introduction:
The reflections break into few sections mainly, reflection (only selected few) on the module being taught and discuss in class. Impression On the teaching Methods & Facilities (Lecturer; MR. David Tan, precise and concise. – Location PSB City Campus – Marina Square Singapore). Lastly my lecturer and Class PT119 & My Group Impression.
Managing International Trade
1.Topics Reflection:
Introduction to Managing International Trade
1.1 Introduction on Trade Factor Mobility Theory
Summary:
. The complex nature awareness of International trade
. The Trade Exchange on both Quantitative and Qualitative level
. Main trade, investment, and promotion tools
. Demonstrate and articular export strategy for an international company and issues.
(PSB PPT Slides unit 1, 2019)
1.2. Political Economy of International Trade
Summary:
. Why trade is restricted – Protect the national economy or national Security and Protect Human rights.
. How to control trade – Tariffs Specific and Ad-valorem
. How to promote trade – EPZ, Special Economic Zones, Firm-Specific Zones.
Recommended textbook:
(PSB PPT Slides unit 2, 2019)
1.3. World Trading System
Summary:
. WTO World Trade Organization
. Economic Integration – Global, Bilateral and Regional.
. The theory of Adam Smith and David Ricardo
. The Washington Consensus
.1947 – GATT (Multilateral trade agreement)
.1995 – WTO formed (Dispute Settlement & Trade Review Body) 164 Countries members: Trade in Goods, Trade in Services and Trade in TRIPS
Structural Adjustment Programmes (SAP) – IMF (IMF uses stabilization policies and the World Bank oversees adjustment measures)
SAP’s are loans given by the World Bank and International Monetary Fund to developing countries that experienced economic crises.
SAP’s are designed to make the developing countries more market-orientated, this mostly means more privatizations and deregulation- particularly trade barriers
(PSB PPT Slides unit 3, 2019)
1.4. The Regional Trading System and Bilateral Trading
Summary:
RTA – Regional Economic Integration: The diverse regional trade associations (RTAs) around the world
Agreements among countries in a geographic region to reduce/remove tariff & non-tariff barriers to the free flow of goods, services & factors of production with each other e.g. EU and Japan Deal.
The EU’s Cecilia Malmstrom and Japan’s Fumio Kishida have struck an agreement in principle to negotiate the trade deal.
Pakistan and Thailand free trade deal. Nawaz Sharif and Yingluck Shinawatra shaking hands in 2013
(PSB PPT Slides unit 4, 2019)
1.5. Contemporary Issues in the World Trade Organization
Summary:
. Trump vs WTO trade dispute settlement system
. Donald Trump is quoted as saying on Fox News:
“The WTO was set up “to benefit everybody but us. We lose the lawsuits, almost all of the lawsuits in the WTO.”
. The current issue of WTO: There are usually 7 judges on the appeal board of WTO
Historically one is from the USA
Currently, the US is blocking the appointment of new judges when the current judges time ends
There are only 4 judges left, one more is due to leave in December
There must be three judges for a panel to run.
. Trump vs the Trans-Pacific Trade Partnership
. The WTO and the SDGs
(PSB PPT Slides unit 5, 2019)
1.6. Developing Imports and Exports: Documentation, Procedures, and Risks
Summary:
. Exporting: ‘Sale of products or service to customers located abroad, from a based in the home country or a third party’
Importing: ‘procurement of products or services from suppliers located abroad for consumption in the home country or a third country’
. Chose a country to export, but to study the background first:
Obsolescence and leapfrogging of products. China do not have landline phones
Prices. Japan, less money to spend on products as food price is high
Income elasticity. Total market potential = %age change in product demand / %age change in income
Substitution. Hong Kong low car ownership
Income equality. High-income inequality makes GDP less meaningful
Cultural factors and taste. Similar GDPs but different taste. Hindu’s in India and meat consumption
Existence of trading blocs.
Detailed analysis:
Country specific issues:
Labour
Infrastructure
Ease of transportation and communication
Government Incentives and Disincentives
Risk:
Political risk
Social unrest and disorder: strikes, demonstrations, terrorism
Abrupt changes in government and government policy
Legal Risk
Economic risk resulting from economic mismanagement
Foreign exchange: If all exchange rates were fixed there would be no foreign exchange risk. However, in the real-world currencies fluctuate up and down and represent different risks to organizations
Transport Risk
. Once we have found a country to export to, we now need to decide if we want to export
Three different types:
Non-exporters. Grow the domestic market, produce products that do not travel well
Occasional exporters. Exporting is a low priority, may fill occasional exporting orders
Regular exporters. Productive, profitable, strategic activity is regarded as a regular exporter
. How to export:
Direct exporting. The costliest. The company sells products to independent intermediaries such as agent, distributor or retailer
Indirect exporting. A stress-free approach. Can send products to distributors, agents or export management companies. It can also supply inputs to other companies to produce products.
Filling orders to domestic buyers who export overseas
Selling to domestic buyers who represent foreign end-users
. Which market to enter?
Cost-benefit analysis
Overall attractiveness
(PSB PPT Slides unit 6, 2019)
1.8. Developing Export and Import Strategies
Summary:
Making payments for exports and imports
Costs of export-import financing
Sources of export-import financing
How foreign exchange risks can affect export-import business
. Countertrade can include:
Barter, clearing arrangements, switch trade, buy-back transaction, and counter purchase
(PSB PPT Slides unit 8, 2019)
1.9 Impression on Teaching Methods & Facilities (Lecturer; MR. David Tan – Location PSB City Campus – Marina Square)
Great Campus in the city, facility, and environment but the class is affected during the F1 event. Road closures and crowds include noise pollution from the F1 cars plus the Haze from Indonesia blowing into Singapore during this season.
2.0 Lecturer Impression:
Mr. David has great and in-depth knowledge of the module and can relate the subject to local contexts as well as international context. His humorous ‘jokes’ and Hokkien accent make us feel more friendly and involved as fellow Singaporean. So being a Vietnam or
Myanmar or people from the Philippines to enjoy and ‘laugh’ together from his gesture and body language.
Looking forward to attending his class again and will bring others to him. Thank you, Sir.
2.1 Group impression (Name: VIPER)
Our Members:
1) Lucio Elliane Loy Genobaten– business Executive (M) Director
2) Chang Wei An, Ann – Full-time House manager (M) Director
3) Chng Kian Heng, Samuel – Supplier for Semiconductor Equipment (M) Director
4) Ho Chun Fei, Chris: Business Executive & manager for commercial Aircondining Supplier (CEO)
5) Ngoi Kah Seng – Operation Executive (CFO)
6) Nick Ngo Dat Nghia – TUV, Executive and operation and Marketing for Compliance sector. (COO)
7) Wong Seng Kwong, Stephen – Supplier Chain (Logistic)
2.2 Group Dynamics
The group is dynamic and energetic. Multinational and diverse Experiences and in operation in many different sectors in the Industries. There is sometimes differ in opinions and conflict. however, this been resolved as the objective is to target the tasks to be accomplished and not the person and emotion.
2.3 VIPER EXPORT STRATEGY
There are 4 components we have researched when working upon the Export Strategy Namely, software Service, customers and their behavior, competition and Regulatory and landed cost.
The principal administration to be sent out would be Clinic Management Software. Because of various nations’ stringent guidelines on the Personal Information Protection Act, we would cover the surface, not into “Center Service”. This could be called to Clinic’s outside help, for example:
Appointment booking/checking availability, Cashless payment for health care
Services, Access to information and personal reports/medical certificate, Chatbox with clinic’s customer services, and appointment reminder and useful links for respective health issues.
By giving these administrations, we could establish a framework of trust and quickly getting to a higher objective, open and private emergency clinics, which could be ventured into – medicine orders for delivery , birth delivery or surgery appointment , ward bed booking services and remote monitor on patients and lastly, hospital inventory and Human Resources Management.
Concerning power, we as of now have our activity office in Kuala Lumpur with more than a hundred programming engineers on different ventures with more than 30 Malaysian firms, to be specific Petronas, Astro, Plus Berhad, and so forth. By getting to these new social insurance administrations, we accept with our extraordinary human services administrations advanced arrangements gave in Singapore, we could send over key colleagues to come over and start verifying arrangements, which could be outlined by our current on-going undertaking with Parkway Pantai’s Mount Elizabeth Hospital. This strategy could set aside a hundred a great many dollars on labor cost and upgrading trust in the middle of Vietnam-Malaysia two-sided relations, looking at gambling ourselves into untimely and youthful markets like the Philippines.
2.4 Conclusion:
The objective and learning outcome of the module is well met. The knowledge delivered and I have benefitted from it. Although some topics are quite dry and only facts and figures, I still found it interesting because of much research is needed to understand and master the topic such as “Managing International Trade Finance”. The Collaboration for the Board Report was successful and achieved the objective and goal to discuss and extensive research. However, the outcome is positive and rewarding.
2.5 References:
PSB PPT Slides:
Unit 1 Knowledge cast Intro Trade Factor Mobility Theory
Unit 2 Knowledge cast Political Economy of International Trade
Unit 3 Knowledge cast World Trading System
Unit 4 Knowledge cast The Regional Trading System and Bilateral Trading
Unit 5 Knowledge cast Contemporary issues in the WTO
Unit 5 Knowledge cast Developing Imports and Exports: Documentation, Procedures, and Risks
Unit 7 Knowledge cast Exporting Countertrade
Unit 8 Knowledge cast Developing Export-Import Strategies
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