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California International Trade And The Global Financial System
Date Added: November 19, 2008 12:06:28 PM
In the International Financial Arena, "what have you done for us lately?" is not a question being put to the U.S. The Europeans have already seen what the American mortgage meltdown did for them. It spread their way like a trans-Atlantic virus that they couldn’t run away from and there is little the Europeans want from the U.S. now besides help restoring calm and a new American leader they can trust again.
The European Union is petulant with the U.S. The question now, is with the global economic meltdown, has a new era in international trade begun? International attorneys and lawyers in San Diego, Los Angeles, Long Beach, Palm Springs, Newport Beach and Anaheim have begun to hear the rumblings.
The U.S. Financial System has been criticized as under-regulated and uncivilized and it was only a matter of time before changes were going to be proposed to put some distance between the U.S. system and that of Europe. A few coughs from the person you are dealing with and you increase your space. When you keep catching cold from someone, you want to move away more dramatically. That’s what has been going on right now in U.S.-European relations.
The European Union wants greater regulatory power in international finance and wants these reforms to spread the regulatory power to Europe, China, Brazil and India. In recent days, the French, British and German leaders called President Bush and urged him to call an international conference to put such international reforms into place. Today, summits are taking place regularly and the cooperation between all the financial markets are starting to soothe relations
But there seems to be a growing consensus in Europe that the U.S. is losing or has already lost its superpower status in the global financial system. With the loss of power of the financial center in New York, power had thought to be shifting to Europe, Asia and the Middle East. With the collapse in the price of oil, that could now be changing again. Until the markets have restored calm and the dust settles, it will have to be seen what the new U.S. President is able to do to restore it’s status in the world.
With the collapse of the World Trade Organization’s round of trade talks in July 2008, there has been talk we may be headed toward a more protectionist trade climate to go along with lower trade growth flowing from the economic meltdown. The slowdown being felt in the U.S. is being felt even more strongly in countries such as Ireland which is trying to arrange a loan from countries such as Russia to avoid a complete bankruptcy as a country.
What started as a slowdown has gained speed downward. The previously high cost of fuel has added to shipping charges, such that the cost of shipping can outweigh the value of the goods in some cases. And with wages rising in Asia, once cheap goods are no longer cheap or in demand. Even with the global slowdown affecting the price of oil, to combat a worsening trade situation, manufacturers are looking to relocate plants closer to their end markets.
While trade goes in cycles, it is becoming more widely perceived that the pendulum of this cycle is just beginning to increase in speed and the rebound may be some ways off. |
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