Perhaps the most sobering benchmark of world trends is found in Japan, a nation that was once viewed the economic model for the future. Those with long memories can recall how Japan was notable for its unprecedented trade surplus in the 1980s. Now, the export powerhouse has had four consecutive quarters of trade deficits in January, "the longest such stretch since the price of oil upset its trade balance in the 1970s" (Dougherty 2009).
Those with memories as short as last year can recall how global trade was trumpeted as the panacea to the world's ills, now the International Monetary Fund (IMF) "expects the total volume of global trade to shrink in 2009 by 2.8%" the first contraction since the 1982 world recession (Dougherty 2009). Japan's government will also lend $1 trillion worth of foreign currency reserves Toyota, Sony and other desperate and struggling Japanese export-driven companies. "About $5 billion of Japan's foreign currency reserves will be used to finance a government-backed bank that will be charged with making dollar-denominated loans. The carmaker said its wholly owned subsidiary Toyota Financial Services was requesting money that would help it make more loans to customers in the United States" in hopes to stimulate demand for automobiles (Dougherty 2009). Automobiles have been one of the hardest-hit commodity products in the United States.
Japan, in a further effort to stimulate international trade, "recently pledged $1 billion to the World Bank to finance trade with emerging markets in partnership with...
In Europe, the French government recently used a new agency to finance exports of $6.5 billion in planes made by Airbus, the European commercial jetliner manufacturer. The German government, working through a private insurance company, is putting more resources into exports to Russia" (Dougherty 2009).
The Ex-Im Bank, which used to only insure loans made by private banks, is now lending money directly to non-American buyers of American products.
But despite these hopeful signs, all of these actions are a powerful contrast with the ease in which credit was obtained only a year or two ago, illustrating the importance of easy credit in financing globalization. Because of the credit crisis, previous analyses of the interdependence of the world economy and the inevitability of globalization must be reassessed. The world economy is indeed interdependent in the sense that economic difficulties in one nation, specifically the credit market in the United States, have an international impact. However, creating trade alliances between nations will prove increasingly challenging if routine credit in the import/export market is impossible to obtain.
Works Cited
Dougherty, Carter. (2009, March 3). "Countries stepping in to finance export trade." New York
Times. Retrieved March 8, 2009 at http://www.nytimes.com/2009/03/04/business/worldbusiness/04trade.html?scp=2&sq=importing%20exporting&st=cse
Importing/exporting
