Issues in Global Business and Strategic Concepts: US Analysis

This report provides an analysis of the United States within the context of global business, focusing on recent developments, key priorities, and strategic concepts. It examines the impact of Foreign Direct Investment (FDI), the North American Free Trade Agreement (NAFTA), and international trade on the US economy. The report highlights the decline in FDI in 2016, the effects of NAFTA on Mexico and the US, and the implications of US involvement in various wars. Key priorities discussed include international trade, economic development, and ethical issues related to wars and immigration. Recommendations are provided to improve various sectors of the US economy, emphasizing the need for development in areas such as literacy, economic growth, social care, healthcare, and technological and industrial development. The report concludes by emphasizing the dependence of US economic growth on current government decisions and the importance of focusing on the total benefit of everyone.

ISSUES IN GLOBAL BUSINESS AND
STRATEGIC CONCEPTS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Recent developments in US.............................................................................................................4
Three key priorities for US..............................................................................................................6
Recommendations and Conclusion..................................................................................................8
REFERENCES ...............................................................................................................................9
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INTRODUCTION
United State of America is constitutional Federal republic that is composed of 50 states.
It is a highly developed country and world's largest economy by GDP ratio. US also ranks high
in various measures of socio-economic performance criteria that includes wage rates, Per capita
GDP and human development index (Gwynne and Cristobal, 2014). Along with this US has
emerged as world's largest economic and military power and at international level it is a leader in
technological innovations. Present assignment has been completed on US and the NAFTA
agreement between three nations including Canada, Mexico and US. There exist wide difference
between political, cultural, foreign investment, recent developments and globalization.
Canada is a leading business destination and many organizations are opening their offices
there. Economy of Canada is ninth largest economy and huge employment opportunities are
available for people. Country has successfully navigated the economic and world finance crisis
that occurred in the year 2008. Federal structure and merit based public services with public
education system is effective in the nation (Hay and Marsh, 2016). Along with this Canada's
development assistance budget is at eights the largest position. It is globally integrated countries
in the world and government of nation is active in international organizations.
Trade related opportunities are higher and it aids for gaining foreign direct investment for
the country. International trade and investment has been increased in the nation and it has helped
for ensuring long term growth and economic development of the country. General agreement on
Tariff and Trade renders lower tariffs for enhancing cross boarder trade activities. General
economic independence of Canada supports for facing the financial challenges effectively.
Economy of Canada has transformed from Colonial to a continental. Globalization and removal
of national sovereignty has aided for transferring the political power of nation from states to
different corporations (Pringle, 2017). Open market of Canada supports free market economy
and there is less intervention of government in regulating the market conditions. Corporates are
given freedom for capital and trade flows and it supports for carrying out the trade related
activities successfully. The report also discusses about the recent developments in US and also
about key priority areas for the nation.
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Globalization and international migration has given impact on the culture of the nation.
Large number of people from all across the globe are coming to the nation in search of
employment and it has given impact on the traditional culture of the nation. However, people
from local community resist changes and due to that cultural conflict is observed in nation. On
the other hand economy of Canada is highly dependent on external markets and it supports for
gaining foreign direct investment for people (Hutter, 2014).
RECENT DEVELOPMENTS IN US
FDI (Foreign Direct Investment)
FDI is effective way of raising investment in a particular country. US is also benefited by
FDI as foreign markets investment keeps country alive with better growth and increasing capital
in effectual way. However, the market report shows that FDI fell up to 13 % in the financial year
2016. But this downfall had not affected US as it had garnered a rise of 11 % in the same year. It
is also projected that nation will raise the same investment in the next year as well. US President
has been initiating for tax cuts so that lower taxes will help local firms to grab foreign earnings in
effective manner (Lindio-McGovern, and Wallimann, 2016). However, there were economic
slowdown in the entire world but this had not affected US as it has earned good quantum of
foreign direct investment in the best possible way. This has eventually helped the country to
attain better position in the global market despite of economic slowdown.
NAFTA (North American free trade agreement)
Individuals that are living in the country are struggling to find better employment
opportunities. Wage earned by majority of population are below the poverty line and due to this
local community people finds it difficult to manage a better life standard for themselves. NAFTA
has been signed between the Mexico, Canada and United states of America and it has given
many undesired impact on the performance of the nation. Along with this in the case of NAFTA
Mexico, Canada and United states shares a continent and economic and social transactions are
being made possible through signing of this agreement (Cowen, 2014). Mexico is serving as
second largest market for American exports. Domestic industries and companies of the nation
has got affected due to it and it is giving impact on the overall economic development of nation.
NAFTA has resulted in decline of Mexican economy as US has already taken 2800 jobs. US has
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not benefited from the whole agreement as cheap manufacturing of products is still not used by
the nation. The trade between three nations have significantly maximised by 297 billion dollars
to 1.14 trillion. This has benefited Canada as it is able to produce niches quite easily. This will
help three nations by having cheap raw material and finished product as well. Moreover, the
agreement has paved the way for initiating good jobs across all the nations (Roelvink, 2016).
This is required as Mexico is dependent for skilled labourers to be employed in manufacturing
and assembly positions. The labourers can be easily supplied by Canada and US which is jointly
helpful for three nations for accelerating economic growth and development in effective way.
Wars
There has been several wars in various countries including Pakistan, Iraq and
Afghanistan. Wars between these countries has resulted into enormous spending of US on these
countries. This has risen national debt as it borrowing the amount and as such, this has resulted
into all time deficit. According to the market report of US, country has already spent 4.8 trillion
dollars which is evident from the figure that country is under threat as deficit has risen up to
great extent. However, this figure does not include costs of the economy, investments in various
sectors for initiating supply for war (Crane and Matten, 2016). On recent basis, US-led fight
against Islamic State has also affected the economy. US has spent huge funds that were taken as
borrowings and as such, interest obligation has also risen. This has resulted into increased debt of
the nation which also adds to nation's budget. The fight with Islamic States including Syria,
Afghanistan, Pakistan and Iraq has increased interest costs as it adds to contingency operations in
national debt for almost 1 trillion dollars at the end of 2023 financial year. This projected value
of interest will be raised by at least 7.9 trillion dollars at the end of 2053 year if US follows the
same procedure for paying against wars.
THREE KEY PRIORITIES FOR US
International trade
Trump has won presidency election in 2016 and has implemented various strategies for
boosting economic growth for benefiting the country. He has given his withdrawal from TPP
(Trans-Pacific Partnership Negotiations and Agreement). By signing on this key withdrawal, US
has regained growth in effective way and this action has boosted its control on international trade
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in the best possible way. Another key priority on international trade is for job creation in the
country for sustainable development (CIM. 2016). This is based on repatriation of supply chains
globally. Since, China is supplying cheap raw materials to US including steel and as such,
manufacturing takes place in China which is cheaper to buy for US. But there may be trade war
between two countries as China has increased control over the nation. This can be severe threat
to US economic growth as China has already become world's biggest economy ahead of US in
terms of economic growth (Peck and Theodore, 2015).
In addition to this, China is not under the partnership of TPP. Barack Obama Former
President of US has suggested that TPP can be the biggest tool for the country to have some
control over China and regaining lost economic power and growth. In contrary to this, Donald
Trump is against such deal and says this will not benefit the nation. US has resigned from the
agreement and now consequences will be seen whether it will go in favour of nation or not.
Economic development
US has high has good economic development and as such, it is the world's largest
economy and focusing on attaining more growth. China is not far away from the country and it is
calculated that it will become the biggest economy in coming 20 years of time frame. Thus, it
will surpass US economy and initiate more control over it. This may be the biggest threat for the
nation and well-structured strategies are to be implemented so that it may be able to retain
number position in the market. In contrary to this, US has gained healthy growth in several past
years. This is evident from the fact that it had maximum GDP (Gross Domestic Product) in the
financial year 2015 which had outreached European Union up to great extent.
It has larger export of goods which includes capital goods, industrial goods and
customers goods as well. This has resulted into the largest exporter goods and has leave
European Union up to high extent. US economic growth has resulted into more growth and as
such, it has gained much for the betterment of the country (Asongu, 2014).
Ethical issues – wars and immigration
The biggest ethical issue for the nation is not clear about environmental pollution and
other issue. Immense war of US with Iraq and Afghanistan has resulted into more costs to the
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country. According to the people, there were almost 370000 people died in the wars. Millions of
people have died because of war and as such, it has destroyed nation up to high extent.
Another ethical issue is related to immigration facilities which has not been provided to
Muslims and treated in negative way. The terror attacks has lead to increase in checking at
American airports of innocent Muslims as they are being questioning for it. Thus, immigration
restriction was signed in which seven Muslim countries was not provided immigration for US
and as such, American citizenship were not included in it. Moreover, illegal immigration from
Mexico has also been banned by the country and as such, it is facing ethical issues (Weinstein,
2014).
Foreign Direct Investment
Volume of Foreign direct investment in the country has been increased and it has aided
for increasing number of trade related activities. Unemployment rates has also been declined and
better job opportunities are available for people that are living in the country. Prominent role has
been played by Foreign direct investment in making deep structural reforms in the country.
Financial deficits has been reduced to a large extent and it has helped for making long term
financial investment strategies for the nation (Pringle, 2017). Moreover, local firms are facing
challenges and struggles due to this and their profitability and revenues has been declined due to
increasing number of foreign investment in the nation. On the other hand Foreign direct
investment has supported for bringing sustainable growth in the economic terms in the nation.
There is long way to go for the government to lead the country on path of economic growth and
success.
RECOMMENDATIONS AND CONCLUSION
Unite states of America needs to focus on improving the various sectors of within the economy.
The country should focus on achieving development in various areas such as literacy, economic
growth, social car, health care, technological and industrial development. The further economic
growth of US highly depending on the current government decisions in the world, US need to
focus on the total benefit of everyone.
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REFERENCES
Books and journals
Asongu, S., 2014. Financial development dynamic thresholds of financial globalization:
evidence from Africa. Journal of Economic Studies. 41(2).pp.166-195.
Asongu, S., 2014. Globalization (fighting), corruption and development: How are these
phenomena linearly and nonlinearly related in wealth effects?. Journal of Economic Studies.
41(3). pp.346-369.
Cowen, D., 2014. The deadly life of logistics. University of Minnesota Press.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Gwynne, R.N. and Cristobal, K.A.Y., 2014. Latin America transformed: globalization and
modernity. Routledge.
Hay, C. and Marsh, D. eds., 2016. Demystifying globalization. Springer.
Hutter, S., 2014. Protesting Culture and Economics in Western Europe. University of Minnesota
Press.
Lindio-McGovern, L. and Wallimann, I., 2016. Globalization and third world women:
Exploitation, coping and resistance. Routledge.
Peck, J. and Theodore, N., 2015. Fast policy. University of Minnesota Press.
Pringle, R., 2017. Understanding Islam in Indonesia: Politics and Diversity. Pacific Science,
71(2).
Roelvink, G., 2016. Building Dignified Worlds. University of Minnesota Press.
Weinstein, L., 2014. The durable slum. University of Minnesota Press.
Online
CIM. 2016. [Online]. Available through: <http://www.cim.co.uk/>. [Accessed on 20th April
2017]
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