We have more peninsulas which provide easy access to oceans. For instance, in Florida, many companies have a location right near the water. They pack up their ship and then their ship sets sail, transporting goods all over. Also, we have a few oceans surrounding us such as the Pacific, Atlantic and the gulf of Mexico. These oceans provide easier access to leave the country with goods along with allowing other ships to come dock. The Mississippi river along with the great lakes also provide America with an easy way to transport goods all over the country.
China also has access to the Pacific River which may be the reason that we trade so much and always have. 14 countries border China! This means that within close distance Chinese products can be transported to 14 countries without a boat, but rather a truck.
Israel is located on the Mediterranean sea allowing nearby countries to dock their ships. Also, it’s location is not only easy access to outsiders but for Israelis to trade with others leaving is easy. Also, since Israel is so small, many countries neighbor it.
America is a mixed economy
China is 90% Command and is slowly developing free market
Israel is a mixed economy as well.
Leadership & Development
America has a president and governors and senators to run the country. America is a developed country.
Israel is a developing country. It has a parliament so therefore is run by a prime minister.
China consists of a communist party. They have elections but the majority of the country is run by the government. China is a developing country.
In America for the past few years we have been suffering from a downfall or recession. Many jobs were lost and still haven’t been found. The government is trying to distribute money to make the economy back to what it was. In addition, the government is trying to create more jobs to be available to the country.
Israel is constantly having war and conflicts with the Palestinians over their land. This affects every part of their life. The government is constantly raising taxes to pay the military and buy military tools. Their spending is constantly going up to prepare themselves for what will come next with the Palestinians.
China is having political upheaval because many of the products that they are exporting such as baby formula, sheet rock, toothpaste has been found to contain harmful ingredients.
America: $14.12 Trillion
China: $4.99 Trillion
Israel: $195.39 Trillion
Freedom Work Index & Balance of Trade
Economic Freedom Work Index
Balance of Trade
America: -44003.00 milion
What Does the Data Mean?
According to my data, the security rate for the US and Israel is suffering. The poverty, unemployment and jobless rate are all increasing. On the other hand, China's security rate is much lower, meaning that they have less poverty, unemployment and jobless citizens.
All three countries have a high freedom index. So, the majority of the country is free. America has the most free people while china has the least.
GDP is the growth of the country. America has the most growth while Israel has the least growth, based on their production and goods.
America's balance of trade is so low because we import much more than we export. Or the things that we export aren't successful in selling. Israel's high balance of trade is good because they are making money.
America: Fashion and clothing. America is known for her wide variety in brands. Agriculture and telecommunications are also prominent.
Israel: Diamond industry, electronics and agriculture
China: Plastics, semiconductors, petrochemicals and automobiles
What do People do for Work?
America: retail salesman is the most popular job. Social service jobs are also popular
Israel: Accounting assistant, Accountant banking jobs
China: Salesman, computer software developer and building contractor are the most popular jobs in China.
Famous & Special Items
America: TV programs, the movie industry and recorded music. GPS, satellites.
China: Textiles, medicines, food, silk and building materials.
The United States Advantage has been limited since WWII, but we still have a comparable advantage with computers and in medical, aerospace, and military equipment
Israel has an advantage with high-technology products (including aviation, communications, computer-aided design and manufactures, medical electronics, fiber optics), wood and paper products, potash and phosphates, food, beverages, and tobacco, caustic soda, cement, construction, metals products, chemical products, plastics, diamond cutting, textiles, footwear
China enjoys absolute advantage with mining and ore processing, iron, steel, aluminum, and other metals, coal; machine building; armaments; textiles and apparel; petroleum; cement; chemicals; fertilizers; consumer products, including footwear, toys, and electronics; food processing; transportation equipment, including automobiles, rail cars and locomotives, ships, and aircraft; telecommunications equipment, commercial space launch vehicles, satellites
The United States enjoys comparable advantage with leading industrial power in the world, highly diversified and technologically advanced; petroleum, steel, motor vehicles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, mining
Israel enjoys comparative advantage with Cut diamonds, high-technology equipment, and agricultural products (fruits and vegetables) are the leading exports
China enjoys comparative advantage with agriculture and auto mechanics.
Trade Relationships With the USA
China imports 19.3% of Americas goods. This includes, agricultural products 4.9%, industrial supplies 32.9% (crude oil 8.2%), capital goods 30.4% (computers, telecommunications equipment, motor vehicle parts, office machines, electric power machinery), consumer goods 31.8% (automobiles, clothing, medicines, furniture, toys)
The US does not have a trade relationship with Israel.
Barriers to Trade
America puts barriers on our traded items to produce competition and allow our products to be successful For instance, since cars from other countries are competing with American cars, when they come into our country, a tariff is placed on those products so their overall price for sale is higher than the American car would be. This is done to protect our products, but still allow people to buy products from other countries.
Israel has trade barriers for safety reasons. Since Israel is constantly at war, they must be careful with who they allow to come into their countries boarder lines.
China’s barriers are placed due to a combination of the two reasons faced by both Israel and America. Like America, China has competition and like Israel, China must look out for the safety of their people.
Free Trade Zones
America does not have Free Trade Zones. This is done for safety since we are alliances with Israel, not having a trade barrier may be something to consider since they appreciate everything that we do for them and we like to stand by Israel and help them in times of need. On the other hand, having free trade with China may not be such a good idea since we are not always on the best terms with them. In addition, lately there have been roomers that there are chemicals in products which China produces. This is dangerous for our companies and for Americans who are not aware of what to look for. If America had free trade with China, their products would be dramatically less than American products are, and they would be more tempting to buy which would then result in sick babies and people.
Israel has a free trade agreement with America. Israel does not have free trade zones other than America.
China has 15 free trade zones and has had free trade zones for a while.
USA- 2.16-2.32 %
Rate of Exchange
America USD= 3.53583 ILS 1 USD= 6.57460 CYR Israel 1 Israeli shekel (ILS) = .38282 USD 1 ins= 1.85942 CYR China 1 CYR= .53780 ins 1 CYR = .15210 USD
How Can These Rates be Influenced?
Exchange rates can be influenced because the higher currency a country has, the more expensive that countries exports will be and the less expensive their imports will be in foreign markets. The American exchange rate is not as good as it used. This is why our goods are so expensive in foreign markets. If the USD was back on top, out goods would be less expensive and more affordable in China. The American inflation rate, exchange rate and our potential for trade has all decreased due to the economic decline that we are experiencing.
China on the other hand has been hit with an economic crisis. Since it is no where as dramatic as the one that we are experiencing, their rates are all staying steady. As a matter of fact, their exchange rate is very high.
Israel falls in the middle so they are steady as well. their dollar is greater than the US dollar and their rate of inflation is less than the USD. Israel is still a developing country and because of its size it develops slowly. Their economic values are incredibly great for their size.
1. Which country do you think would increase its success more in meeting the economic goals from expanding trade with the United States? Explain.
China. Israel is already close with the US and knows that we are here to help them. China is a stubborn country who is all for themselves. They don’t take consideration into other countries like the US does. You don’t hear about China sending troops to help another country at war.
By expanding trade with the US both ways China may be more successful than they already are economically. We allow many Chinese products into our country because we are accustom to them and many of our citizens need them. However, if China didn’t tax our goods so high we may be more lenient allowing more goods into our country. If they did this, their industries would grow.
2. Based on your information about comparative and absolute advantage, explain which country the United States would benefit from most and why.
The US would benefit from China over Israel. This is because China is more developed industry and economy wise than Israel. Israel is 50 years old while China has been top producers for twice or even triple the life that Israel has been around.
3. Considering your discussion and data on barriers to trade and free trade zones, which country would be easier to trade with from a political point of view? Explain.
Israel would be easier to trade with. When we trade with Israel the tax that their government places on our products are not nearly as dramatic as those placed in China. We have helped Israel many times in the past and present and we have developed a good bond with the country.
4. Are any of these countries experiencing high inflation? How does inflation affect exchange rates with U.S. currency and, ultimately, the cost of trade? How else may inflation impact a society and the world economy?
America is experiencing high inflation. It affects our currency because our currency is now worth less and our trade expenses become more expensive because we must sell the product for more money to make profit. Inflation can cause the world economy to go in debt. When inflation occurs we are not ready for it and it occurs spontaneously. Inflation causes countries to scram for money and a solution to lower the inflation.
5. Are there other issues in either country that the United States should consider before entering trade negotiations? Discuss them. Examples may be human rights concerns, war, geography, other political issues, malnutrition or disease, transportation, or climate.
America should take into account that China is poor at quality control and they take short cuts. One man did such a poor job on the assembly line he was killed. Buying food from China can be risky because it can be contaminated since China doesn’t have regulations on pollution like we do.
Israel is a great partner for the US. It is the only democracy and free country I the middle east. However, Israel’s enemies contain 80 percent of the worlds oil. So when America is doing trade with Israel we must take precaution not to alienate Israel’s neighbors. A good example of this is Pepsi cola. It is not sold in Israel because the Arab countries threatened Pepsi that if they sell it to Israel that the Arab countries won’t buy it for their countries. Pepsi chose the Arab countries over Israel.
6. To finalize, which country do you think would be a better trade partner for the United States at this time? Explain.
China. This is because of their strength. Right now China is superior to the US, so by trading with them and becoming good partners we are helping ourselves. In addition, China would benefit as well. They would become alliances with the great country of the world. We may not be as wealthy as we used to be but, we may be able to offer China good advice
Citations CIA https ://www. cia.gov/library/publications/the-world-factbook/geos/ us.html (11 January 2011). ibibo. http://www.bixee.com/india-jobs-in/Israel/ (9 January 2011). China Service Mall. http://www.at0086.com/at_News/ 319/577918949059123.html (8 January 2011). Famous Brand Products. http://jsfamous.js.cei.gov.cn/emp_jsmp.htm (11 January 2011). Investopedia. http://www.investopedia.com/articles/basics/04/050704.asp (18 January 2011).