Key Destination Markets for Export and Import

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Key destination markets for export and import:

Exports, Export Trade, Exporting Goods and Services.

Exports of goods from one country to another involvethe participation of customs authorities of both thecountries. It also includes those countries through whichthe goods pass through. Exporting goods and services toother countries is a key part of a country¶s economicdevelopment, focusing either on raw materials, finishedgoods or services based on available resources. Exporttrade helps to create more jobs and boost a country¶s

economic growth.Export Trade Dynamics. A firm exporting goods andservices to other countries requires an exports licensefrom the country¶s licensing authority. In the US, ExportsA dministration Regulations (E A R) controls the export of goods. The goods or services to be exported arecategorized into various sections across the countries,

and the exporter needs to select the appropriate categoryfor the item to be exported.Exports across the globe areregulated. However, each country may follow differentregulations. Exports are typically restricted to countriesthat are suspected of supporting or participating interrorist activities. Some products have a global exportsrestriction.Export trade uses air and water routes to shipthe exported goods. Due to the growing popularity of the

Internet, finding information relating to exports hasbecome easier.



Export Trade: major players: In 2008, the World TradeOrganization (WTO) indicated that Germany is the world¶s largestexporter, followed by China and the US. Germany¶s world classengineering sector comprises small and medium enterprises that

operate throughout the world. A bout 40% of the country¶s GDPcomes from exports alone. Germany¶s contribution to total globalexports amounts to about 9.5%. One-fourth of the world¶s totalglobal exports are provided by the top three exporting countries.The top 10 exporting nations are:

y Germanyy Chinay USy

J apany F rancey N etherlandsy Italyy UKy B elgiumy Canada

Trade in USA. positioned the country as the world¶s largest

economy, where businesses are free to make marketdecisions. Trading in international markets is part of its µcapitalisteconomy¶ outlook.Trade in the US is regulated by the Office of theUnited States Trade Representative. This body recommends tradepolicies to the US President. It conducts trade negotiations atboth bilateral and multilateral levels.

The US Trade: Market Share. The United States is theworld¶s biggest consumer. It is also one of the world¶s top three

exporters. A 2009 survey conducted by the US Census B ureauand the US B ureau of Economic A nalysis states that the country¶ssum total of imported merchandise in F ebruary 2009 amounted to$152.7 billion. Its exported merchandise reached $126.8 billion.This gap has shocked the country and sent out signals of alarm asits trade deficit stood at $26.0 billion. However, trade deficit inthe month of F ebruary is less compared to that of J anuary .



The US Trade: Exports. In 2008, US trade exports are:

y Industrial supplies, including electrical machinery, transportequipments and power generating machinery (29.8%)

y N on-auto consumer goods like organic chemicals (12.4%)y M otor vehicles and their parts (9.3%)y F ood and beverages (8.3%)y A ircraft and parts (6.6%)

The country¶s leading export partners in 2008 are:

y Canaday M exicoy Chinay Germanyy The UK

US Trade: Imports.

y Spanning several decades, the US has been the world¶s leadingimporter of goods and services. Its major imports are:

y export road vehicles

y petroleumy petroleum productsy apparelsy clothing accessoriesy non metallic minerals.

In 2008, the top five countries from which the US imports arelisted in order of their ranking as on 2008 are:

y Chinay Canaday M exicoy J apany Germany



Some key import-related facts are:

y A ll commodities entering the US must clear customs. They areliable to pay customs duty unless exempted by law.

y The process of customs clearance can be accelerated by theA utomated Commercial System ( A CS), through which the entryof cargo and disposition documentation are processedelectronically.

The country¶s trade deficit surged by 5.5% to reach above $27billion in M arch 2009 as global recession seemed to tighten themain trading partners of the US in Europe, N orth A merica andA sia. J apan¶s trade has been dominated by the high-yieldingmanufacturing industry. While the government has been tryingto push exports, the country¶s trade still comprises of hugeimports.

European trade is a complex but efficient system,involving 50 European countries in total, with 27 nations in theEuropean Union (EU). F ormed in 1993, the EU works on the sametrade objectives as that of the European Economic Community(EEC). It has developed a µsingle market¶ and µcustoms union¶

among its member states.

European Trade: Significance of EU: Trade in the EU ischaracterized by free movement of goods, services and people.The freedom of capital flow facilitates uninhibited investment inthe real estate and stock markets. A ll EU member countries followthe same trade policies for all sectors, including agriculture andfisheries. These two sectors account for a significant portion of exports. Trade in the EU has become simpler with the adoption of

the common currency known as the Euro by 16 member states.B enefits of using the Euro are:

y Creates a single markety M aintains price stability in member statesy M inimizes exchange rate problemsy Simplifies travel for European citizens



y Insulates the µeurozone¶ from external economic shocks byboosting internal trade

Trade with Europe: Exports

A n EU state does not levy taxes for exports to othermember states. A ccording to the Eurostat data forJ anuary 2009, the largest exporters among the EUcountries are F rance, Germany andN etherlands.Taxes may, however, be levied on goodsexported outside the EU. The global recession in 2007-2008 led to a sharp decline in its trade volumes.

Some truly critical exports that the European countriescontinued with are:

y M achinery: A ll of Europe.y A utomobiles: The UK, F rance, Germany, Spain and

Italy.y A ircraft: F rance and Germany.y Electronics: The N etherlands, Germany and Italy.y M ilitary equipment: The UK, Germany, F rance, Italy.y F ood products such as wine, pastas, cheese, chocolates,

beer and agricultural products: This spans both Westernand N orthern Europe.

Some of the critical ports in the EU are Southampton,A ntwerp and Hamburg.

European Trade: Global ShareThe International M onetary F und (I MF ) indicates that theEU accounts for 31% of the global economic output. Thecombined GDP of the EU nations exceed the GDP of the



Import Trade: Major Importers

The WTO published a report in 2008 listing the major importingnations:

y The United States imports $2.17 trillion worth of goodsy Germany imports $1.21 trillion worth of goodsy China imports $1.13 trillion worth of goodsy J apan imports $762 billion worth of goods

y F rance imports $708 billion worth of goodsy B ritain imports $632 billion worth of goodsy N etherlands imports $574 billion worth of goodsy

Italy imports $556 billion worth of goodsy B elgium imports $470 billion worth of goodsy South Korea imports $435 billion worth of goods.

India Trade, Trade with India, Trade in India,Indian Trade:Trade and commerce have been the backbone of the Indian

economy right from ancient times. Textiles and spices were thefirst products to be exported by India. The Indian trade scenarioevolved gradually after the country¶s independence in 1947. F romthe 1950s to the late 1980s, the country followed socialistpolicies, resulting in protectionism and heavy regulations onforeign companies conducting trade with India . India¶sinternational trade situation improved when Prime M inister RajivGandhi reformed the trade policies in the late 1980s. With taxreforms, deregulations and privatization initiatives, India hasattracted the global market¶s attention.

India Trade: Market Share

A significant boost to India¶s trade in the late twentieth centuryresulted in the country getting the tag of an ³emergingeconomy.´ A ccording to a report published by the



World Trade Organization (WTO) in M ay 2007, India¶s share in theglobal market for merchandise and services rose from 1.1% in2004 to 1.5% in 2006. A ccording to leading managementconsultancy M cKinsey & Co, the growth of India¶s economy can

match that of China (about 10% per annum) if the formereliminates the main impediments to trade.

India Trade: Imports India¶s major imports compriseof crude oil , machinery, military products, fertilizers, chemicals,gems, antiques and artworks. Imported goods are divided intothe following categories:

y F reely importable items: F or these items, no import license is

required. They can be freely imported by an individual or a firm.y L icensed imports: These imports comprise of precious and semi-

precious stones, firearms, pharmaceuticals, insecticides, andplants and animals.

y Canalized items: These items can only be imported by publicsector firms. F or example petroleum products fall under thiscategory.

y Prohibited items: Items such as unprocessed ivory, animalrennet and tallow fat cannot be exported to India.

C hina Trade, Trade with C hina, Trade in C hina,C hinese Trade

A ccording to an economic survey published by the Organizationfor Economic Cooperation and Development (OECD) in 2005,Chinese exports grew at an average rate of 6% since the mid-1980s. A lthough China¶s export growth was affected by a globalslowdown, the country overtook the US to become the world¶ssecond largest exporter by end-2007. The OECD had predictedthat China would become the world¶s largest exporter by 2010.



C hina Trade: C ontribution to the Economy

In the nineteenth century, the contribution of China tothe global economy was negligible, despite the country¶s abundant

resources. In the 1970s, the Chinese government startedreforming its economic policies and adopted market socialism.This led to an upsurge in the growth of the country¶s privatesector, resulting in China becoming a major player in theinternational market. The impact of the liberalizationof C hinese trade and economic policies is exhibited in the followingstatistics:

y M easured using Purchasing Power Parity (PPP), China¶s GDP

reached $7.8 trillion in 2008, making it the third largesteconomy after US and J apan.y China is a strong emerging economy, with 11.4% GDP

growth in 2007 and 9% in 2008.y The country¶s global trade surged past $2.4 trillion in 2008.

C hina Trade: Imports

The top five imports from China and their value in 2006:

y Electrical machinery - $174.8 billiony Petroleum and related products - $84.1 billiony Professional and scientific instruments - $48.6 billiony M etalliferous ores and scrap - $44.0 billiony Office machines and data processing equipment - $40.7 billion

Other facts pertaining to Chinese imports are:

y Import of chemicals used for making weapons is restricted.

Importers require a license for ozone depleting materials andtoxic drugs.

y A utomatic import licensing is offered for poultry, wine, copper,oils and fertilizers.

Key Destination Markets for Export and Import

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