If a member of the Euro trades mostly outside the Eurozone ...

1) If a member of the Euro (whichever these members are) trades mostly outside the Eurozone, does it make sense for it to be in it?

2) If a member of the EU and its single market (whichever these are) trades nostly outside the EU, does it make sense for it to be in the EU?

3) Membership of the EU single (or even common EEC) market "means" a state has focus inside the EU mkt (short though of a Fortress EU mentality)

4) The rationale of the single/internet EU market of 500,000,000 is for it to be (oh well) internal/single. And for members to trade mostly inside.

5) Global mega exporter Germany sells 40% in the Eurozone and 60% inside the Single EU Market. Makes sense!

6) If most EU members trade(d) mostly outside the EU, then what's the point a) of the EU Single Market? b) of the EU?

7) But then again quite a few of the 27 joined the EU/EEC primarily for security rather than economic reasons.

Is Germany a bull in the Eurozone's China Store?

Some thoughts of mine on PressEurop's very interesting report: Berlin still selling too much (14/8/2012)

1) The FAZ comments IMO, at best, show (let's call it) "non-systemic thinking".

2) Is Germany exporting too much or importing and in general consuming too little? Too little from the Eurozone?

3) In terms of trade surplus, Germany is a bull in a China Store. Funny thing is, Germany's inflation phobia makes China another bull in the Eurozone and EU's "stores"/mkts for goods.

4) Germany saves "a lot" which means it has to find outlets for its investments. No wonder Germany had invested "a lot" in the PIIGS (while selling "a lot" to them too). The rest is not "rocket science"!

5) But the strategic/systemic question is: Is Germany too big to be part of the EU/EZ but too small to be a power on its own? And if Germany is too small to be a world power on its own, what do that say for eg UK's ambitions? France, sometimes arrogant, nevertheless knows it needs "Europe". UK and Germany (and others) act as if they do not.

6) Marketing: What exactly is Germany exporting that the Eurozone (40%), EU (60%), the world, a) cannot substitute or b) always need/want?

7) So with Germany having cornered the high quality market, China the low price one & US the new tech one, what's left for (most of) the rest?

8) Problem not only that Berlin still selling too much but its policy/philosophy not selling (in many parts of Europe/EU/Eurozone)

Their way or the highway?

Countries with large trade surplus take pride in their capabilities.

They sound like entrepreneurs who think they succeeded on their own.

They also sound like the scorpion in the Scorpion and the Frog.

To export products and services to a "foreign" market you have to ....

To export products and services to a "foreign" market you have to understand, research, be interested in that market or produce a product or service that your native/local market likes and be lucky that other markets "like" it too! Or be R&D driven & hope.

A company that does not "care" what people think about its products or services be unsuccessful in either foreign or "native" market(s

It can get "lucky" if its in a by nature or geography "captive" or oligopolistic market. Or someone grants it monopoly rights to a market.

Work for companies that produce products or services you like. Produce products and services for "people"/markets you like. Biz is not chore

Proximity to a foreign market is a competitiveness factor. Either geographical or "mental" proximity or both.

Is business (including exporting) about beating your competitors or about capturing the hearts and minds of potential consumers?

The mantra of top business schools has been the latter, for years now!

Yet how many CEOs and biz owners feel that way?

In effect, products and services must create "mental monopolies" in consumer minds!! Be considered :"the only one". Much like dating!!!!

Next Tuesday is Valentine's Day. But every day's Valentine's Day IRL! How many people think your product(s)/service(s) are "unique" to them?

How many people or companies think your products/services are unique in satisfying a certain need or want they have?

Or are you relying on old style mass media ad blitz to convince people that your product or service is something they "really" need or want?

Producing and delivering a product or a service is a creative, artistic, non chore like process! Or should be.

Since Germany relies 59% on the EU for its exports then ..

How much of a market for Germany's quality products is there in the whole planet outside the EZ and EU? 433 bn Euros in 2011 (41# of total).

Since Germany relies 59% on the EU and its Single Market (40% Eurozone) for its exports then Angela Merkel shoudn't have a problem with the idea of the EU leaving the WTO and (thus) dealing with the flood of China imports in the EU and EZ (especially given the still expensive Euro)! Time for the EU to raise the trade barriers and lower the immigration barriers (we need immigrants due to ageing)! 

By the way, since many talk of benefits and costs to their taxpayers, how much tax revenue did Germany get from 421 bn Euro business sales/exports to the other Euro members in 2011? How many jobs?

So is it the Eurozone that needs Germany or German the Eurozone?

In more detail:

1) So let's see: 1060 bn Euro exports in 2011! +11.4 from 2010!

2) 420.9bn of those 1060 bn euros went to the rest of the Eurozone, a "small" rise, +8.6%, but > 40% nevertheless! So even in crisis, the other 16 in the Eurozone bought 40% of German total exports! 40%! The 245 mio ppl of the EZ16 bought 40%!

3) 245 mio EZ people bought 40% of German exports, while the other 6900 60%! And there's more!!

4) While the 245 mio of the EZ16 bought 421 bn of German exports, the 10 EU non EZ, 190 mio only bought 206 bn German exports!

5) The rest of the world, 93% of the whole world, bought 432.8bn euros exports, +13.6%, yet only slightly more than the EZ16.

So, again: Time for the EU to raise the trade barriers and lower the immigration barriers (we need immigrants due to ageing)! 

An alter way of making PIIGS & others more competitive

Want to reduce the prices of PIIGS and other economies exports & tourism to make them more competitive?

Why not help them avoid the cut of the middlemen in the European and world markets?

German exports record high in March vs Euro/USD rate

Today it has been announced that the March 2011 German exports were Euros 98.3bn!

That means
1) +16% from March 2010
2) that is the highest monthly total since 1950 when record keeping began

But what was Euro/USD in March compared eg to last week (the week before "the weekend"?
See a chart eg here and draw your own conclusions!

To paraphrase Bill Clinton, "The (Eurozone) periphery stu...."

Today the ECB decided to keep the Eurozone rates at 1.25%, following the increase from 1% to 1.25% last month (see eg BBC's news report)

Thank god for Eurozone exports (to the rest of the Eurozone, the EU and world markets as well as their competitiveness vis-a-vis cheap third country imports) and tourism (Spanish, Italian, Greek, Portuguese, Irish, etc)!

I am beginning to think that ECB philosophy is either too German or not German enough (or both at the same time)! In any case, it is "off".

I felt that I am not alone in the Universe when I watched excerpts from N. Roubini's speech at the Estoril Conferences in Portugal yesterday: Inter alia, he did point that expensive Euro was a "nail in the coffin" of PIIGS economies! (and still is IMO). He opined (and I so agree) that with the Euro being worth 1.5 or even 1.4 Euros the PIIGS economies have a hard time being competitive vis-a-vis non Eurozone cheap products! And he did "accuse" German economic policy of not increasing its domestic demand to help the PIIGS' (intra-Eurozone) exports!

How many countries committed "economic suicide"

Many countries suffocated their own productive forces in their economy via red tape etc thus paving the way for imports to come in and rule!

Consider: What are the real causes - factors that turned eg the US & the UK from net mega exporters to net mega importers in only a few decades?

In many countries it started making much more sense to import than to produce (due to red tape and other conditions) = "economic suicide"

Some thoughts on world dynamics

Some thoughts on world dynamics

Too many CEOs in 2010 still have the mindset of military leaders, in that they are preoccupied with beating the competition instead of focusing on client needs, wants and satisfaction. Too many analysts as well.

On the other hand, world dynamics in recent years have turned countries into players in a global economic game where the goals are scored via exports and trade surpluses!
Hence corporations are failing in satisfying clients, shareholders and ... analysts, countries are failing to satisfy their populations and have allowed populists to create scapegoats out of political and economic immigrants (see recent proposals re immigrants and "new" citizens in USA, France and Belgium).

In short, the world (Earth) is anything but uniting, in spite of the positive effect of the Internet and social media!

If the Germans spend more, who will benefit, the rest of the Eurozone or China and other WTO economies?

So the savers must become spenders, the spenders savers, the exporters importers and the importers exporters?

If the German consumers spend more while the EU is in the WTO, most of the benefit will go to:

1) The Chinese and other non-EU (in WTO) "super cheap" exports
or
2) The exports of other Eurozone economies?

I suspect the former (1).

Does that mean that the EU should leave the WTO for the benefit of more balance in the Eurozone?

Good news for UK exports!

According to the CBI, the Confederation of British Industry (member of BUSINESSEUROPE), manufacturing production rose for the first time in two years, as overseas demand for UK made goods increased and stock reductions eased.

According to the CBI's latest quarterly Industrial Trends Survey (note: The January 2010 CBI Industrial Trends Survey was conducted between 10th December 2010 and 6th January 2010; 461 manufacturing firms replied) there was a stronger-than-expected rise in output in the three months to January.

But the CBI warned that the outlook for the sector remains uncertain, with domestic demand still weak, and some firms still struggling to access finance.

Of the 461 manufacturers surveyed, 31% said output rose during the three-month period, while 20% said it fell. The resulting balance of +11% is the strongest figure since January 2007 (+19%).

Export orders rose for the first time since January 2008, boosted by the relative weakness of Sterling and improving global demand. 30% of firms said exports grew during the quarter, while 24% reported a fall, giving a balance of +6%. Exports are expected to grow more strongly in the next quarter (+13%), and firms are the most optimistic about export prospects for the coming year (+19%), since July 1995 (+21%).

Firms are continuing to de-stock, but at a slower rate, which also helped lift output. A balance of -11% indicated that stocks of finished goods fell in the quarter, compared to a balance of -29% in the October survey.

Domestic demand, however, was weaker than expected with 18% of manufacturers reporting a rise, and 26% a fall, giving a rounded balance of -9%. That compared with a balance of -16% in October. Total new orders were broadly unchanged (+1%).

Ian McCafferty, the CBI’s Chief Economic Adviser, said:

“After nearly two full years of falling output, manufacturers are seeing a return to modest growth, thanks in part to improved overseas demand and much slower stock reductions.

“It is encouraging that the weaker pound is now providing firms with some respite as global demand improves. Exports are rising for the first time in two years, as UK-made goods are looking more attractive in overseas markets. Manufacturers are also feeling upbeat about export prospects for the year ahead.

“However, the manufacturing sector is not out of the woods. With domestic demand still weak, and credit remaining constrained for some companies, firms expect growth to be more modest in the next quarter. This underlines our view that the UK’s economic recovery will be slow and protracted.”

According to the same survey, the availability of finance remains a concern, and is cited by 13% of firms as a factor likely to limit output, and by 12% as likely to limit export orders.

Despite that, sentiment about the overall business situation is continuing to improve, with a net 12% more optimistic than three months ago.

The rate of job losses across the sector is slowing. A balance of -13% indicated a drop in staff numbers during the quarter, an improvement on October’s balance of -34%.

Investment intentions for the year ahead are stabilising. Firms are planning on spending more on training and retraining (+11%) and on innovation (+15%). Investment in buildings will be cut back further (-18%) and little change is expected in spending on plant and machinery (+1%).

Domestic prices are expected to rise for the first time in six quarters (a balance of +8%). 66% of firms report that they are working below capacity, compared to 76% in October.

Chinese exports rebound, +17.7%, in December 2009

China's exports rebound, rising to $130.7bn, in December 2009, up 17.7% when compared with December 2008!

Total exports in 2009 were $1.2tn, -16% that of 2008 and imports were $1.01tn, down 11.2% from 2008, resulting in a total trade surplus of $196.1bn, down 34.2% from 2008.

UK car production in November (10% of total UK exports)

The automotive industry has £51 billion turnover and £10 billion value added. Over 800,000 jobs are dependent on the industry which accounts for 10% of total UK exports and invests £1 billion each year in R&D.

According to The Society of Motor Manufacturers and Traders (SMMT) car output was 112,948 in November, up 15.7% compared to November 2008. This is the first rise since September 2008, reflecting the positive impact of the UK scrappage schemes and economic stability in a number of major European markets. Yet production from Jan-Nov 2009 was 914,117 cars, -34.4% compared to Jan-Nov. 2008.

Commercial vehicle output was 9,186 in November, -16.2% compared to November 2008. It continues to fall, although the pace of decline has slowed. Production volumes have fallen in every month since September 2008. In the first 11 months of the year, production was 83,408, -57.6% compared to Jan-Nov 2008.

Thus, production is still well below previous levels,997,525 units from Jan-November, which is -37.2% compared to same period in 2008, and 2010 is set to be another tough year with considerable uncertainty at home and abroad. "It is essential that governments continue to sustain and strengthen economic recovery, improving access to credit and encouraging investment in new technologies and products” said Paul Everitt, SMMT chief executive. “Whilst the November figures represent the smallest recorded fall in the past 14 months, the sector is still down almost 60% on the year-to-date.”

The SMMT supports the interests of the UK automotive industry at home and abroad, promoting a united position to government, stakeholders and the media.

Improvements in production processes mean energy used to produce cars is down 24%, water use is down 45% and 57% less waste enters landfill sites. Average car tailpipe CO2 emissions have also been slashed and are down 20% compared to 1999 levels.

EU trade stats for January-August 2009

EU January-August 2009 detailed results by Eurostat:

The EU deficit decreased for
a) energy (-152.3 bn euro in January-August 2009 compared with -261.1 bn in January-August
b) raw materials (-12.1 bn compared with -27.5 bn).

The EU surplus fell for:
Machinery and vehicles (+68.6 bn compared with +100.9 bn),

The EU surplus rose for:
Chemicals (+53.6 bn compared with +51.0 bn).

EU trade flows with its major partners

EU trade flows with all of its major partners fell!

The largest decreases were recorded for exports to:
Russia (-40% in January-August 2009 compared with January-August 2008)
Turkey (-28%)
South Korea and Brazil (both -23%)
the USA and Norway (both -20%), and

The largest decreases for imports were from:
Russia (-43%)
Norway (-31%)
Japan (-29%)
Brazil (-28%) and
Turkey (-26%).

The EU trade surplus decreased with the:
* USA (+26.1 bn euro in January-August 2009 compared with +42.6 bn in January-August 2008)
* Switzerland (+8.6 bn compared with +12.2 bn).

The EU trade deficit decreased with:
China (-86.4 bn compared with -102.5 bn),
Russia (-29.1 bn compared with -55.2 bn),
Norway (-21.9 bn compared with -36.5 bn ) and
Japan (-13.0 bn compared with -22.9 bn ).


Member States

The largest surplus was observed in Germany (+81.3 bn euro)
followed by Ireland (+25.9 bn) and the Netherlands (+23.2 bn).

The United Kingdom (-61.3 bn) registered the largest deficit
followed by France (-34.5 bn), Spain (-31.4 bn), Greece (-19.0 bn) and Portugal (-11.6 bn)

US Trade Statistics for August 2009 and Jan-Aug 2009

With the release of August 2009 U.S. International Trade in Goods and Services report by the Department of Commerce’s U.S. Census Bureau and the Bureau of Economic Analysis:

• U.S. exports of goods and services increased by 0.2% in August 2009 to $128.2 billion since July 2009,
• while imports declined 0.6% to $158.9 billion over the same period.

Thus in August 2009, the monthly U.S. goods and services trade deficit decreased by 3.6% to $30.7 billion when compared to July 2009.

Although the decline in year-to-date figures from 2008 to 2009 has been significant, the monthly figures show signs of stabilization.
On a monthly basis, August represents the fourth consecutive month that goods and services exports have increased, with monthly exports rising from $120.6 billion in April 2009 to $128.2 billion in August 2009.

Export Markets:

The largest export markets for U.S. goods year-to-date through August 2009 were:
Canada ($130.3 billion),
Mexico ($80.9 billion),
China ($41.2 billion),
Japan ($32.9 billion), and
the United Kingdom ($30.2 billion).

Export sectors

In August, U.S. good exports continued to improve, with exports increasing:

• of pharmaceutical preparations (up $458 million from July 2009),
• steel-making materials (up $356 million),
• and passenger cars (up $285 million).

January-August

Exports:
Through the first eight months of 2009 (January – August), U.S. goods and services exports totaled $996.2 billion, a 20.3% decline from the $1,250.5 billion exported through the same period of 2008.

Imports:
U.S. goods and service imports fell faster than exports, with imports declining 29.1% through the first eight months of 2009 (when compared to the year earlier period).


The Oil effect on imports and exports:

The decline in trade in nominal terms is partly due to the drastic decline in crude oil prices.

Since the peak reached in July 2008 of $124.6, the price of crude oil has declined 48.0% to a value of $64.8 in August 2009.

Imports: The total value of U.S. imports of petroleum have fallen to $152.5 billion year-to-date through August 2009, compared to $330.4 billion from the year earlier period.

Exports: U.S. exports of petroleum have fallen to $30.0 billion year-to-date through August 2009, down 39.4% from the same period of last year.


Trade with developing countries:

Although trade with most of its major trading partners has fallen, U.S. goods exports continue to grow to developing areas.


The effect of Free Trade Agreements:

Free Trade Agreements have also helped the U.S. to maintain a foothold for U.S. manufactured goods exports:
The U.S. manufactured goods trade balance with the US' FTA partners has improved from a surplus of $12.7 billion through the first eight months of 2008, to a surplus of $19.3 billion through the first eight months of 2009.

NAFTA: The most dramatic improvement in the manufactured goods trade balance has been with NAFTA partner Canada, where the U.S. manufactured goods trade balance has increased to a $19.4 billion surplus!

EU: The European Commission has approved the French and Dutch short-term export-credit insurance schemes

The European Commission (EC) of the EU has authorised the French measure until 31 December 2010. The French measure is aimed at limiting the adverse impact of the current financial crisis on export firms.

The EC found the measure to be in line with its Temporary Framework for state aid measures to support access to finance in the current financial and economic crisis (see IP/08/1993). According to the Competition Commissioner Neelie Kroes "the French short-term export credit insurance scheme provides the appropriate balance between supporting exporters in areas where the market is temporarily not functioning properly and limiting distortions of competition."

"Ensuring effective export credit insurance is vital for building the basis for a strong economic recovery", she added.


In alia, the premiums charged under the public scheme are aligned on those of the private market, as stipulated by the safeguard clause in the Commission's Communication on short-term export-credit insurance. The premiums are set at a level that provides an incentive for exporters to have recourse to private insurers as soon as sufficient cover will be available on the private market.

Plus: The measure includes safeguards so that financially unsound transactions and counterparties that would not obtain cover even under normal market conditions do not unduly benefit from the measure.

The same rationale explained that approval of the Dutch measure 3 days earlier.

2009+ viable models for economic growth, exports and jobs

With 75-80+% of most OECD economies being Services, what are viable models for economic growth, exports and jobs?

India's exports hit by global recession

Exports are a significant factor for the economy of India, 15% of GDP.

Thus the news that India's exports fell in May for the 8th consecutive month is crucial.

Exports in May were down 29.2% from May 2008 and imports 39.2% (valued in India's national currency) and the trade deficit was about 50% that of May 2008.

Which begs the economic, social and philosophical question: Is reduction of countries' trade deficit due to the global recession a "good" or a "bad" thing? Food for thought.

over-dependence on foreign trade?

According to the German Finance Minister, Germany must begin to reduce its dependence on foreign trade.

My comment:

1. does that include intra-EU trade?
2 should the EU (as a whole) do the same?
3. others (countries or "regions" (eg Mercosur, ASEAN, etc)?

One of the "troubles" with foreign trade is that even today it is not "free" (of quotas and tariffs) even between the WTO (ex-GATT) member countries and that economies, most if not all, that relied up to 50-80% on exports trade are being hit the hardest by the global economic crisis.