Trading Activities of Italy which Led to US Trade Relations
Italy is an independent nation in southern Europe. The start of the 20th century opened up for wider opportunities for the country especially in terms of industrialization. They lag 100 years behind other countries in Western Europe basically because of the lack of raw materials to be used for the industry. Coal and other fuels were not that abundant. Another issue on the late blooming of Italy is political in nature. This was a reason to hinder the development of Italy as a countrywide market. Industrialization was seen to flourish in the northwest with prime commodities such as textile, iron and steel together with shipbuilding and engineering. The rest of Italy was agricultural until the 1950's.
Manufacturing dominated the 1980's. Back then, it formed 37% of the gross domestic product (GDP) for the country. Petroleum and natural gas were seen to supply a few lot of the population but other minerals such as marble, zinc, sulfur, lead an bauxite are of great help.
More than half of Italy's land was supposed to be devoted to farming but a mere half of these 50% were seen to prosper in such an activity. Agriculture was hampered by lack of investment means which could have been used for the purchase of modern-day equipment. It was furthermore hindered by small-sized farms and tenant used lots.
Italy's imports from other countries are petroleum, meat, industrial raw materials and cereal grains. Exports, on the other hand are fruits, vegetables, manufactured goods and other crafts. Italy suffered trade deficits but with the help of the other members of the European Continent, they have survived their stature in international trade. Other helpful countries were the United States and Switzerland.
Major Exports and Imports Between US and Italy
The Italy and US are considered large trading partners evidenced by their very wealthy foreign business. Over the past five years, these two nations were seen to work very well with each other economically. The United States is in fact considered as one of the contributors in offsetting the trade deficits experienced by Italy. For the year 2008, exports and imports were noted by the US Census Bureau from January to July. The totals were $9.62 billion and $22.26 billion respectively. In the year, 2006, the following import and export data are available:
Trade Agreements Between the US and Italy
- Italian Exports to US. Italian exports to US gained a total of $32.7 billion for the year 2006. Out of this total, medicinal, dental and pharmaceutical preparations comprised 5.5% equivalent to an amount of $1.78 billion. Other products found in this group are: industrial machines; other petroleum products; miscellaneous household goods; wine and related products; footwear; jewelry; household furniture; industrial engines, pumps, generators; and stone, sand cement, and lime. The last group made an earning of $681.4 million equivalent to a percentage of 2.1%.
- Italian Imports from US. The imports of Italy from US for the year 2006 amounted to a total of $12.6 billion. Found on top of the list are pharmaceutical preparations which had a total of $1.1 billion or 8.4% of the total. The top ten was completed by: precious metals; medicinal equipment; industrial engines; pulpwood; civilian aircraft parts; semi-conductors; industrial machines; metallurgical grade coal; and organic chemicals. The last item earned a total of $287.4 million or 2.3% of the total.
- Fastest-Growing US Exports to Italy. There were five products which impressively increased the sales of exported products from US to Italy. Of the five products, fuel oil came up with a total of $150 million equivalent to 1127%. It was followed by unmanufactured agricultural products, primary synthetic rubber, metallurgical grade coal and aluminum. Even the last product is commendable for a percentage increase of 61.7% or $31.8 million.
- Fastest-Growing US Imports from Italy. Highest percentage of sales of US imports from Italy was topped by non-ferrous metals. This product had an increase of 145.9% or $88.6 million. Other goods which showed impressive sales performance were nickel, fuel oil, railway transportation equipment and oil field platforms and equipment. The last item soared with a sales percentage increase of 76% totaling $217 million.
One of the most notable trade agreement between the US and Italy is the proposed US Anti-Counterfeiting Trade Agreement (ACTA). This is a multilateral intellectual property agreement spearheaded by the United States and European Countries. It mainly focuses upon piracy especially on filing of criminal charges against unauthorized information exchange in the internet.
Another treaty formulated by US and Italy officials was the so-called Italy Friendship, Commerce and Navigation Treaty. This agreement was signed in Rome in February 2, 1948 with several ratifications made until it took full force in July 26 of the following year. The pact was primarily made to further strengthen traditional ties of friendship between the two nations and promote closer relationships between their territories. The scope of its provisions includes spiritual, cultural, economic and commercial goals. Specifically, the following things were emphasized:
Trade Conflicts Involving the US and Italy
- On Friendship. The nationals of Italy residing in US and vice versa are accorded the right to worship and exercise liberty of conscience. They are also allowed to conduct religious activities in their own dwellings and other portions of the state provided that they are not committed to violate public conduct and devastate public morals. Moreover, all citizens are allowed to enter into trade and business relationships in the territory to which they are staying.
- On Commerce. This particularly focused on free trade relations between the two nations. It specifically provided that Italians and Americans may form part of any partnership, corporation and other business entities of the other without any discrimination from the heads of the company themselves even if they come from the other nation. Furthermore, payment of internal taxes, fees and charges shall not be a subject of dispute between the two. Each company built on the grounds of the other territory should enjoy the same rights and privileges of other domestic companies.
- On Navigation. Commercial travelers representing citizens or business establishments are allowed to explore the other country provided that it is for the transaction they have to make. Equal treatment should be accorded to these individuals and firms assuring that they are protected in the dwelling far from their own.
Trade conflicts involving the two nations arise from the so-called Small Arms. This particular problem focused on the export and import of small arms and light weaponries which include Brazil, Germany, Russia and China aside from Italy and US. Certain issues had to be resolved such as:
Other trivial issues between the two are just like those which involve US and other countries. Imposition of tariffs on trade, double taxation, accounting principle disparities also affect both the way it affects the entire international trade scenario. There is always that desire to protect the interest of one over the other despite having an agreement to increase trade relations.
- Peace and Order. Some international leaders were concerned about maintaining peace and security among world trade. The question on how it affects international business could be derived from the fact that these small arms may cause some alliances that could be destructive in the relationship among nations. The small arms are actually considered as part of unauthorized trade, thus the attention of all the countries mentioned is being caught. Another point of dispute on this issue is the war against terrorism.
- Illicit trade. The UN secretary general finds it necessary to call the attention of these nations in order to answer pertinent questions. In like manner, UN was concerned on determining where the trade comes from.
This definitely affects both US and Italy's ranking in world trade despite the small role that these arms may play. The UN also wants to emphasize that other countries are affected by the small arms illicit trade, not the exporters themselves.
The Future Trade Between US and Italy
The conflicts on trade which involves both US and Italy are not as striking as other trade disputes. There maybe certain issues needed to be resolved, but all of these are minor in nature. As evidence to an even more prospering friendship, the two countries are now contemplating on biotechnology. Other important considerations on trade are integrated on the economic aspects, political scenes, security and foreign policy.
The effects of the foreign trade of the two nations will benefit their future inhabitants. The continuous efforts to put an end to wars on global business will definitely make Italy and US more than just allies. These two nations will always be standing with each other despite their independence. In the long run, they will be seen to reap their trade successes while helping the rest of the world cope up with trade deficits.
US-Italy Trade References