Thursday, April 7, 2011

An increase and predicted decrease in global trade

Who knew 2010 was a good fiscal year? Well, it was, at least in terms of American exports. The official report from the World Trade Organization pertaining to exports of 2010 showed a 15.4 percent increase from 2009, the largest increase since 1950. What does this have to do with global economics? In the same year, general global exports were up 14.5 percent from the previous year. The article from the Huffington Post (seen here) however, says that these increases will not last. They say that the increase was just boom that will not continue into the coming years. They continue saying that the rising fuel costs resulting from the wars in the Middle East, the recent natural disasters in Japan and rising global food prices are the reason behind the predicted fall in global trade.



But what do you think? It’s true, Japan was a major supplier of electronics and certain foods, but shouldn’t that trade vacuum quickly be filled by any emerging economic superpower? Don’t the basic concepts of economics protect the institution from collapsing?



Still though, people should expect a change in prices in the most common exports from Japan (cars, motorcycles, and computer supplies). The supply for these products is dropping, while the demand is nonmoving, meaning the price will increase until another country steps up and becomes a primary exporter of those same goods. How are you going to deal with the new, higher prices of Toyota cars?



-- Zander Mapes

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