Questions for Discussion
1. Within the past year, the citizens of the City of Denton voted to ban the oil/gas drilling practice of “fracking.” Fracking technology is controversial. It has, however, had a significant impact on the U.S. international trade patterns. Pick a topic from our chapter (e.g. page 134’s topics of Benefits, Volume, and Patterns of International Trade is just one possible choice) and use the topics to comment on “how fracking has impacted U.S. trade patterns.
Hydraulic fracturing (“fracking”) has had a huge impact on US international trade patterns. Specifically, fracking has caused the US to move from being a potential importer of natural gas to an exporter. This is specifically a change in volume thanks to the increased production of natural gas via fracking. According to various studies, a large percentage of world shale formations, where fracking is used to extract oil and natural gas, are found in the United States. This abundance of shale oil and gas turned the US from being a potential fossil fuel importer to a leading exporter.
2. Select one product/service that you believe is ‘uniquely Italian’ (e.g., if you prefer, you could choose one that is ‘uniquely British’ or ‘uniquely Russian,’ etc.) to explain the product/service success using one of our chapter’s Trade Theory (you may use Fig 5.1 as a quick reference for the various trade theories).
Diamonds strikes me as a product that is often associated with a single region; in this case, South Africa. Unlike manufactured goods, the diamond industry is, in many ways, controlled by natural resources. A significant portion of the world’s gem-grade diamonds are mined in and around South Africa. This resource-based view of trade is more reminiscent of mercantilism than any more modern theory. As it stands, gem-grade diamonds are mined in and around South Africa and then funneled into more developed countries in Europe where they are sold to the rest of the world. In effect, this is very similar to the colonial arrangements of mercantilism. Today, this isn’t controlled by a nation, but is instead almost completely controlled by the De Beers corporation, with other smaller players slowly breaking in to the industry.
3. After you have listen/read our media story for Lesson 5, you will know something about the Dallas/Fort Worth region’s participation in international trade. Would you add to our knowledge about D/FW firms/organizations that use international trade? Select a firm, do enough research to identify its international component, and then write a brief statement for posting that describes the firm’s domestic vs. international operations. (For example, Panhandle Slim in FW splits their operations between FW and China—someone may wish to do a ‘bit of research on Panhandle Slim to give a brief description of the firm’s split between domestic vs. international.)
Fluor Corporation is headquartered in Irving, TX. One of Fluor’s businesses that I am familiar with is the design and construction of petroleum refineries. Fluor performs this work all over the world and operates both on its own and as a partner with local firms around the world. In this regard, Fluor is exports services (design) to other countries. My father-in-law has worked for Fluor for nearly thirty years. Over the last twenty years, I remember him doing work on multiple projects in Saudi Arabia and a large project in Kazakhstan. For some of these projects, he has worked for a strictly American company. On other projects, the local policy has required that the contracting firm be at least 50% owned by a local company.
Wild, J. & Wild, K. (2013). International Business: The Challenges of Globalization. (7th ed.). Upper Saddle River, NJ: Pearson.