International Week Two Response 1

Richard’s Post

The trading environment between the Middle Eastern regions and the United States is nonexistent in the smaller countries. Still, it has a significant partnership with the United Arab Emirates (UAE). Developing countries need the infrastructure to manage global operations. However, the UAE trades with all fifty states within the USA. According to the UAE Embassy (2023), “Top categories of US exports in 2020 included: electronics, nuclear materials, passenger vehicles, and aircraft and spacecraft” (para. 3). The innovation coming from a developed country within the region can help set a path for more integration of medical technologies into the areas that have been slow to advance in the healthcare market.

The Middle East trade barriers are more relaxed than other countries. Limited goods and services are brought in and are subject to taxes and tariffs. The non-tariff challenges involve infrastructure and geography of remote locations for developing countries. Tariffs imposed do not restrict the importing of goods such as foods, medicine, and licensed technical equipment.

The Porter Diamond

Country Factor Endowments – According to Peng (2023), "Some countries (such as Saudi Arabia) are rich in natural resources but short on population" (p. 5-2f). The Middle East is rich with natural resources but lacks in population to help foster growth in all countries throughout the region.

Firm Strategy, and Rivalry – The cultural differences between each country in the Middle East create challenges in producing natural resources. The population must embrace new technologies and global commerce strategies to create opportunities for financial growth in their communities.

Domestic Demand Conditions – The increase in exports and imports will help create regional jobs and allow more people to invest in themselves, their families, and local communities to help develop their living standards and succeed in a global market.

Related and Supporting Industries – Technology firms and healthcare industries can benefit from supporting the natural resource industry in the Middle East. The financial success and worldwide partnerships can provide confidence in the local population when introducing modern medicine technology into their daily lives.

Ethical dilemmas of exporting Middle Eastern goods involve government instability and corruption and damaging the local ecosystem due to excessive mining. The people of each country must maintain control of their resources and gain support from industry leaders without sacrificing their land and values. According to Peng (2023), "The aggregation of such buying (importing) and selling (exporting) by both sides leads to the country-level balance of trade" (p. 157). Imported goods must support the demands of the population and the need to grow the economy. Exporting goods should be balanced

to ensure that greed does not adversely affect the land, food, and people that the industrialization of natural resources will impact.

The Middle East's foreign direct investment (FDI) is challenging due to some segments, such as Saudi Arabia with significant wealth, and other impoverished countries, such as Afghanistan. FDI must be careful when investing in some parts because of the potential corruption that may exist. Funds sent with the best intentions may need to be directed away from their intended location. According to Zeren et al. (2023), "Properly directed incentives will succeed in attracting foreign direct investments and contribute to economic growth" (p. 10). If foreign support comes in, a clear return on investment must be established to justify the funds given. Careful consideration of the Ownership, location, and international (OLI) advantages must be made to ensure that all efforts and financing go to the regions that will exhibit the best chance of success. The locations for support must have cooperating leadership from local communities and governmental bodies. Additionally, the infrastructure must be in good standing or capable of being developed to help support the importing and exporting goods and services.

References

Peng, M. W. (2023). Global business (5th ed.). Cengage Learning.

UAE Embassy. (n.d.). US Trade: UAE Embassy in Washington, DC. UAE. Retrieved March 21, 2023, from https://www.uae-embassy.org/uae-us-cooperation/uae-us- trade#:~:text=Since%202009%2C%20the%20UAE%20has,a%2016%25%20increase%2 0from%202020.Links to an external site. Zeren, F., Gülcan, N., Gürsoy, S., Ekşi, İ. H., Tabash, M. I., & Radulescu, M. (2023). The Relationship between Geothermal Energy Consumption, Foreign Direct Investment, and Economic Growth in Geothermal Consumer Countries: Evidence from Panel Fourier Causality Test. Energies (19961073), 16(3), 1258. https://doi.org/10.3390/en16031258Links to an external site.

Ezra’s Post

The US and Sweden have no formal free trade agreement negotiated between the two parties. Sweden is a member of the EU and does not conclude any free trade agreements on its own. However, Sweden takes an active part in the preparations and the work during the ongoing negotiations led by the EU; despite not having a formal agreement, these two countries have strong bilateral ties.

While the US and Sweden have good trade ties overall, some barriers exist in certain areas, such as agriculture. Since Swedish agriculture is highly regulated, price controls, import restrictions, tariff rate quotas, and tariffs that support domestic production can cause barriers between them and other countries like the US.

Porter’s Diamond model looks at a country’s natural and labor resources to help determine if specific industries thrive within those domestic markets. Based on this model, Sweden is a great place to start a talent firm. International students are a focal point of the economy as well as tourism. In 2019 approximately 165,675 people worked full-time in the tourism industry, which made up 4.1% of total employment (OECD, 2019). That same year, 35.5 million nights were spent in Sweden, of which 10.4 million inbound visitors from abroad contributed.

Ethical dilemmas are issues in a decision-making process that is unacceptable from a moral perspective. I foresee there being no ethical dilemmas with exporting to Sweden. Sweden has implemented several anti-corruption policies that work to prevent corruption and bribery.

Foreign investment can be freely made if the companies investing comply with the Foreign Investment Promotion Act (FIPA) or the Foreign Exchange Act (FETA). Organizations that operate in central banking, media, and postal services are strictly barred. Technology and agriculture-based companies are very receptive and desired in Sweden.

References

Corporate Finance Institute. (2022). Ethical Dilemma. https://corporatefinanceinstitute.com/resources/knowledge/other/ethical- dilemma/

Peng, M. W. (2023). Global Business (5th ed.). Cengage Learning.

OECD, 2019 Sweden, and USA trade agreements https://www.trade.gov/country- commercial-guides/sweden-trade-agreements