globalEDGE Blog - Page 68

Last week the globalEDGE blog looked at how U.S. monetary policy, specifically with respect to inflation rates, was impacting debt markets in emerging economies. Today’s blog post continues the discussion about the implications of the U.S. Federal Reserve’s inflation policies and also provides a survey of currency inflation rates across the world.

Earlier Today, Michigan State University announced a historic $30 million gift from alumnus and real estate developer Edward J. Minskoff. The gift is the largest single gift received from an individual in MSU's 163-year history and will be used toward completion of the Business Pavilion at the Eli Broad College of Business. In recognition of the gift, the 100,000 square foot pavilion, designed with state-of-the-art collaborative and immersive learning environments, will be named the Edward J. Minskoff Business Pavilion.

In making the gift Mr. Minskoff said "Michigan State is an important university and important to my past. It gave me a strong foundation, so I am privileged to be making a contribution that will help Michigan State continue to attract and prepare future business leaders".

More information about this historic gift and the Business Pavilion can be found on the Eli Broad College of Business website.

The sport of baseball boasts ties across the world, carrying tradition and holding economic value in countries like the Dominican Republic, Japan, China, and the U.S. For countries around the globe, baseball has been, or is, necessary to their way of life. Recently, however, baseball has seen a substantial decrease in its popularity at all levels. From Major League Baseball to Little League, fewer people are participating in, purchasing goods from, and supporting baseball games. This has a direct influence on many global economies, specifically regarding the equipment with which baseball is played. The question for many retailers and consumers is, what does the future hold for the sport of baseball and its business operations?

Recent currency declines against the U.S. Dollar highlight a dependence of emerging-market currencies on dollars. As the Federal Reserve continues to raise interest rates and subsequently boosts the power of the U.S. Dollar, some emerging markets have seen weakness in their own currencies. Two notable currencies displaying weakness are the Argentine peso and the Turkish lira.

With the start of a new academic year, the entire globalEDGE team has returned to Michigan State University after spending the summer working, studying, and traveling across the world. We are excited to share these new perspectives with our readers through the globalEDGE blog, which will return to a regular schedule with new posts Monday through Thursday. The team will also be updating multiple sections of the website and working to develop brand new content for our users.

This globalEDGE Blog post is also shared as an opinion segment on the globalEDGE Business Beat on the Michigan Business Network (a radio show hosted by Tomas Hult).

The first two Regional Trade Agreements (RTAs) that existed in the world according to the World Trade Organization’s database on RTAs were the EC Treaty (what has now become known as the European Union), which started in 1958, and the European Free Trade Association (EFTA), which started in 1960. Today, some 60 years later, we have 299 RTAs in force (predicted to be about 308 RTAs by the end of 2018).

Complementing RTAs in the world are Bilateral Trade Agreements (BTAs) between any two of the world’s countries. These BTAs are more difficult to count exactly due to what can be considered an active agreement and what is considered a country. Given that we have 193 country members of the United Nations along with two so-called UN observers (Holy See/Vatican and Palestine) along with Taiwan and Kosovo (and 61 dependent and 6 disputed territories), the options are almost endless for potential bilateral agreements.

Including both RTAs and BTAs, the United States is engaging formally in 14 active trade agreements. The countries included in these 14 agreements are Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, and Singapore. The first agreement that the U.S. entered into was with Israel in 1985, with Israel now being the 24th largest trading partner with the U.S. (amounting to about $50 billion annually).

About a year into second his term, President Obama called Max Baucus, Montana’s then recently retired senior senator and offered him the job as the country’s senior diplomat to China.  He readily accepted.

Thus began what Baucus says is the most interesting and demanding job of his career. So, it was with high expectations that I recently attended that annual Zeidman Lecture in Washington, D.C., at which former Ambassador Baucus was featured. He promised several times during the evening to “cut to the chase,” and largely did, telling the audience that China is the most important relationship the U.S. has, the rough patch happening now is likely to get rougher, but he’s optimistic that things will get better—eventually, and if neither county does “something stupid.”

Countries, companies, and customers are increasingly concerned with sustainability. What is unclear from a business perspective, however, is how much cost can be tolerated for sustainability efforts and what markets’ sensitivities are to product prices? The results of a large-scale study that I undertook with colleagues (article) indicate that product-market performance can be achieved even when costs/prices increase by 27 to 72%, and when companies implement sustainability efforts that are 5 to 30% above sustainability efforts of the company’s home country.

The historical arc of international trade bends towards more of it. That’s why current efforts to skew trade further in favor of the U.S. by restricting access to the market will almost assuredly fail.

That also seems to be the lesson for the UK, as even many leavers want to remain part of the EU trade union, which among other benefits allows goods to be exchanged among members without paying duties.  The UK government must soon level with its citizens and let them know that they can’t select what they want from the EU as if they’re invited to a free buffet.

By insisting on renegotiating existing fee trade agreements to force terms more favorable to the U.S., and also slapping punitive tariffs on imports from certain trading partners, Trump hopes to erase decades of trade deficits and restore jobs lost when U.S. companies outsourced manufacturing to China and other countries. These efforts are not likely to work as promised and may end up making things much worse.

The top-selling International Marketing textbook defines international marketing as “the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit.” The argument is that “more than one nation” is what separates domestic from international marketing. We can also argue that “for a profit” is a constraining qualifier since the United Nation’s Sustainable Development Goals, non-profit organizations, and philanthropic organizations – to name a few categories – also use “international marketing” tools, skills, and knowledge to cross country borders with their activities.

But that’s not the focus of this blog! Instead, let’s use the definition of international marketing as a general guide to the topic. What I do want to focus on is Michigan State University’s influence on international marketing scholarship. For about half a century, MSU’s Broad College of Business has been a leader in international marketing scholarship – research, teaching, services, and outreach. MSU has some 1,400 faculty conducting research, teaching, service, and outreach in 176 countries – and a number of these professors are entrenched in international marketing scholarship. Ultimately, research rankings drive the prestige and reputation of an academic institution such as Michigan State University.