Welcome To Our Green Issue! - Global Trade Magazine
  May 18th, 2012 | Written by

Welcome To Our Green Issue!

Whether you believe in global warming or not, there is no denying the rhetorical impact it has had on the green/sustainability movement sweeping across corporate America.
Consumers—especially younger ones—are increasingly sourcing products that offer sustainable initiatives. This in turn requires the entire supply chain, from retailers to carriers to ports to manufacturers to address how they weigh in on the subject. Some companies are genuine in their quest to be greener. Others find it a convenient way to reduce cost, while still others find it effective for growing market share. There are even new terms—like “reverse logistics”—which offer a new dimension to recycling. Whether motivated by customer demand or corporate conscience, the greening of America is a good thing, especially the convergence of green and profit which clearly becomes a win, win.

We call it piracy. China calls it business as usual. Who’s right?
The curious thing about global trade is the inevitable clashing of business cultures. In China, as in other parts of the world, it’s fair game to copy. That’s their culture. Americans honor patents, or at least, we are suppose to. Why? Because our culture dictates that we do. Call it our sense of fairness that’s indoctrinated at early age. Observe a kindergarten class at recess and count how many times five-year olds will say to each other “that’s not fair.” As China’s Assistant Commerce Minister Chong Quan puts it, “China and the US have different cultural and historic traditions.” China will continue to walk all over U.S. intellectual property because that’s how they do business. But when Chinese entrepreneurs truly begin to innovate, it will be interesting to see if they cry foul.

Just like a drug addict has to bottom out before he can begin the healing process, so will our dependence on the U.S. government spending one trillion dollars more than it brings in.
Think about it. For years now we’ve been artificially pumping a trillion dollars per year into our economy and yet it still can only just slug along. Why? Because it is a destructive behavior. Like the drug addict, we will stay sick until we can go “cold turkey” in the form of a balanced budget amendment. We may shake and convulse for a time when we do pass a balanced budget amendment, but we will surely die if we don’t.

Noticed the price of rib eye steak lately? All things cattle are at an all time high.
And we have China’s—and Russia’s—growing middle class to thank for it. How so? America’s ranchers are exporting heifers to Russia and China while they quietly build their own cattle empires. Some ranchers think this is dumb and that by doing so, America’s ranchers are contributing to future annualized decreases in beef exports. After all, once they have their own herds, why import American beef? For China and Russia, importing their own heifers makes so much sense, it makes one wonder why they didn’t do it long ago? And by the way, heifer exports to China is another reason why the Chinese have imported 1.74 million metrics of corn in the first quarter of 2012 alone, matching their total corn imports for all of 2011. Corn of course is used by feed yards to give beef its flavor and marbling. So expect the cost of U.S. beef to continue to climb in grocery stores as American feedlots pay more to source a diminishing supply of U.S. corn.

Do you remember 22 years ago, the trade buzz was all about Europe, Europe, Europe?
Now of course it’s all about China, China, China. It’s a distortion really. Case in point: Caterpillar said last week that an unexpected slowdown in Chinese demand for construction equipment would force it to export 2,300 excavators to other developing countries this year for the first time since 2005. Hello! How many excavators did you think they need over there? Truth be known, U.S. industrials have gotten a bit lazy over the past decade counting on China to absorb everything they threw at them. Well guess what? It’s time to make a few new hires and send your sales team stumping for business in South America and Africa.

Is the Euro zone too big to fail? We’ll find out.
With hindsight being 20/20, can anyone say that creating the Euro was a good idea? Now, if you limit the discussion to the merits of European free trade zone, then sure, that made sense. But to tie the European nations to a common currency? Dumb idea. I didn’t like it then and I like it even less now. When the hedge funds begin to bet against the Euro, as they have been doing, it becomes a death watch. Best to get rid of the Euro now before Germany decides they have had enough. Sovereign nations should maintain their own currencies and be held accountable for their own self-inflicted debt crises.


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