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Will reducing sugar resolve the trade deficit?



 
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Will reducing sugar resolve the trade deficit? #1 (permalink) Tue Jul 07, 2015 3:21 am   Will reducing sugar resolve the trade deficit?
 

As mentioned by the critics that Sacchar will solve the trade deficit by reducing price of sugar, which is its primary export. Personally, I think this is unconvincing argument for many reasons. The trade deficit shows by the amount of export is lower than country's import amount.

First of all, lowering the price of sugar may help increase the quantity of sugar export. However, the price of sugar cannot trade off if the main import of the country will be electronic parts or commodity with high value such as car, computer, or even military weapons. Normally, when we compare the price of agricultural products and eletronic products, the price of electronic products are many times to the agricultural products.

Second, lowering the price of sugar cannot guarantee that Sacchar will be able to increase the export quantity. As we can see trade barrier in many countries for importing sugar to their countries such as import quota by limit quantity or import tariff. This the trade policy to protect their counties from dumping price by other countries.

Finally, the trade deficate is measured by the amount of importing to the amount of exporting. Only control one part (exporting) cannot balance this deficit. We should maintaining these two sides. To illustrate, we should limit unnecessary import goods, esepcially those high value commodity. When Sacchar can control the two ends in the equation, so that Sacchar can manage its trade efficiently.

From many reasons show above, we can conclude that the above argument is poor reasoned, it should state more detail about trade policy to explain in the whole loop to be more convincing.
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Will reducing sugar resolve the trade deficit? #2 (permalink) Tue Jul 07, 2015 9:21 am   Will reducing sugar resolve the trade deficit?
 

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