try resear ch
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Italy
ISABEL ASENSIO
COUNTRY OVERVIEW
ec onom y Italy’s overall economic structure is comparable to that of most
other advanced OECD economies, with a small and diminishing
Lo catio n
agricultural sector and a large and growing services sector. In the realm of regional relations, Italy became a charter member of NATO and the European Economic Community (EEC). It has been at the forefront of European economic and political unification, joining the Economic and Monetary Union in 1999.
Located in Southern Europe, Italy is a peninsula extending into the central Mediterranean Sea, northeast of the North African country of Tunisia. The countries surrounding Italy in Europe include Switzerland, Slovenia, Austria and France.
h i s t ory
today Italy must deal with persistent problems such as illegal immigration, organized crime, corruption, high unemployment, sluggish economic growth, and the low incomes and technical standards of southern Italy compared with the prosperous north.
Italy became a nation-state in 1861 when Victor Emmanuel II, the king of Sardinia, united the regional states of the peninsula, along with Sardinia and Sicily. By 1871, the Italian nation state included the entire peninsula with Rome as the capital. From 1870 until 1922, Italy was a constitutional monarchy with a parliament elected under limited suffrage. In 1922, Benito Mussolini came to power and established a fascist dictatorship, effectively ending the era of parlimanetary governance for a period. Mussolini’s alliance with Nazi Germany led to Italy’s defeat in World War II. A democratic republic replaced the monarchy in 1946 and economic revival followed. In face, since the end of World War II, the Italian economy has changed dramatically from agriculturally-based into industrialized. It is now one of the largest economies in the world and the fourth largest in Europe.
population
59,799,747
language
italian cap ital
rome
population origin
9 2 . 0 0 % I ta l i a n 1.81 % romaninan
MAP OF EUROPE
C O U N T R Y S TA B I L I T Y
soc ia l POLITICAL PESTLE HIGHLIGHTS
Italy has an extensive social security and welfare system that provides coverage to most of its citizens. The National Social
Italy’s political landscape can be summarized into two different key
Security Institute is responsible for the implementation of social
points:
security provisions. Social security activities are carried out by
According to Transparency International’s Corruption Perception
is retained by the national government to ensure uniform
Index 2013, Italy is ranked 69th among 177 countries. Germany and France have been successful in controlling corruption, as indicated in their higher rankings. According to an estimate by Italy’s Court of Auditors, corruption costs the nation around EUR60 billion annually. Constitutional reforms are expected by the end of 2014. The country is in urgent need of constitutional reforms as the current constitution framework results in an unproductive and unstable government. The reform aims at converting the upper house into an unelected body and reducing its egislative powers.
agencies at both regional and local levels, but overall co-ordination implementation across the country. High inequality of income is a concern. According to the OECD, as of 2010, Italy’s gini coefficient (a measure of inequality in income) was 0.319 compared to the OECD-34 average of 0.313.
€euro cur
re
ncy
economic The Italian banking system is under pressure from elevated levels of non-performing loans. New bad debts levels are at very high levels, especially on loans to businesses. Italy has a sizable banking sector the banking sector to have sound fundamentals. Italy has been constantly losing export market share. According to OECD-a Paris based think tank, Italy’s export market share fell to around 3% of world exports in 2013 from close to 4% in 2007. During 1999-2010, the volume of Italian exports on average increased by 2% annually, significantly below the average annual growth recorded for the euro area as a whole of 4.2%.
rat
(163% of GDP as of December 2013); hence, it is very important for
e
€1
u.s = $ $$ 1.13
l egal
The income tax structure in Italy is progressive with a maximum rate of 43% above EUR75,000 Starting a business in Italy takes about six days, which is far below the Organisation for Economic Co-operation and Development average of 11.1 days. According to the World Bank’s Doing Business 2014 rankings, the country was ranked 65th for ease of doing business out of a total of 189 countries.
techno logical According to MarketLine, mobile penetration stood at 160.55 per 100 people in 2013 with total subscribers at 98.61 million. Mobile subscribers grew by an average of 9.27% during 2000-13. Internet users as of 2012 stood at 35.33 million, with a penetration rate of 57.75% in the same year. Internet subscribers grew at an average rate of 7.88% during 2005-12. A new anti-piracy law came into force from March 2014 with regard to combating copyright piracy over the Internet. The law gives the power to the authorities to provide notice and-takedown and start a mechanism for addressing large-scale piracy.
e nv ir on m en ta l Through its taxing policy, the government has lessened the environmentally damaging concessions that come with consumption of fossil fuels. The authorities have effectively used taxes to discourage overconsumption of conventional fuels. According to MarketLine, in 2011, total CO2 emissions was 400.94 million metric tonnes, compared to 416.82 million metric tonnes in 2010.
LEAD-TIME OF PRODUCTION H OW I S MY BUSINE S S A FFE CT E D?
natur al hazards
landslides mudflows avalanches earthquakes
flooding volcanic eruptions land subsidence in venice
te m per ature rome July is the hottest month in Rome with an average temperature of 26°C (78°F) and the coldest is January at 8°C (46°F) with the most daily sunshine hours at 14 in July. The wettest month is December with an average of 96mm of rain. The best month to swim in the sea is in August when the average sea temperature is 26°C (79°F).
national
ho lidays
Under Italian labor law, workers in Italy receive a minimum of 20 days of annual leave and approximately 11 paid holidays. There are also some half-day holidays and feast days for local patron saints.
JANUARY 6TH MARCH 28TH APRIL 25TH
Holiday of the Epiphany
Easter Monday (Lunedi Dell Angelo Pasquetta)
Liberation Day (End of World War II in Italy, 1945)
M AY 1 S T JUNE 2ND AUGUST 15TH
Labour Day (Festa del Lavoro)
Republic Day (Birth od the ITalian Republic, 1946)
Assumption Day (Ferragosto, Assumption of Mary)
NOVEMBER 1ST DECEMBER 8TH
All Saints Day (Tutti I Santi, Ognissanti)
Immaculate Conception Day (Immacolata Concezione)
re l igion catholic
males
30.3 M All responsible for creating what we know today as the
9 6. 55%
on earth
In terms of religious affiliation, Roman Catholicism is predominant, with the vast majority of the population nominally Catholic. That said, all religions are provided equal freedom before the law by the constitution.
The Median Age for the Italian population is around 44 years and a half. The male population withstands with a median age of 43.3
pe ople
Italy has the fifth-highest population density in Europe - About 490 persons per square mile or 200 persons per square kilometer. Apart from the predominantly Italian ethno-linguistic population, there are small clusters of German communities in Bolzano, French communities in the northwest, Slovenes in the northeast, Albanians in the southeast and Greek communities in the south.
females
29. 5 m
while the female population lives a little longer with a 45.6 median age.
median age
4 4 . 5 y e a rs Immigration has increased in recent years, while the Italian population is declining overall due to low birth rates. Age Structure shown below:
0-14 YEARS 13.8% 15-24 YEARS 9.8%
2 5 - 5 4 Y E A R S 43% 5 5 - 6 4 Y E A R S 12. 4% 6 5 Y E A R S & O V E R 21% HOW TO CONDUCT BUSINESS
ETIQUETTE DOS AND TABOOS f irm ha nd s h a k e 1.
The firm handshake is the standard greeting for men and women, upon meeting and again upon departure. Even children are encouraged to shake hands. Handshakes may often include grasping the arm with the other hand. At a large gathering, if no one is giving formal introductions, it is proper to shake hands and introduce yourself. When introduced to a woman, wait to see if see extends her hand before offering to shake. In general, the woman offers her hand first. In social settings, people may kiss on both cheeks. Also, among friends, expect women to “kiss� on either cheek in a manner more akin to pressing the sides of the face together. Close friends and male relatives often embrace and slap each other on the back.
ris e w he n i n tr o d u ce d 2. Always rise to be introduced to someone. Note also that most greetings take place at a close distance. Yelling hello across a room would be considered culturally inappropriate. Wait until the person or persons with whom you are meeting are in close proximity to you where a polite greeting can be exchanged.
do not u s e f i r s t n a m es 3. Do not use first names unless you are invited to; formality is still appreciated. One should use the formal form of
address such as Mr. or Mrs. followed by a surname, unless invited to move to a first name basis. Younger people are
more apt to move to less formal forms of address quickly, while children tend to address each other using first names. Outside the personal sphere, however, it is advisable that professional and governmental titles be used. In business, titles are used more rarely in verbal communication although they are customarily used in written communications. Formality is appreciated
co nv e r s ati o n to p i cs 4.
In conversation, Italian culture, art, food, wine, sports such as bicycling and especially soccer, family, Italian scenery, films, as well as travel, are considered to be good topics of conversation. The Italians tend to be well informed about cultural and political issues, and so one should expect honest and opinionated expression of ideas in this regard. One should, however, avoid talking about one’s profession, religion, politics and World War II. One should also not tell risquÊ jokes.
ge s t i c ul ati o n 5.
Note that Italians tend to be culturally more animated in conversation than other Europeans, peppering their discussions with gesticulation and animation. High-pitched voices and excited gestures should not be mistaken for angry displays, as more often than not, they simply denote great interest in the subject of discussion. (Naturally, this is a generalization and should be treated as such.).
bo dy l an g u ag e 6.
Body language is quite interesting in Italy, and because much gesticulation tends to take place in this culture, one should be aware of the commonly used gestures. For example, a disgruntled man may Social Overview Etiquette Italy Review 2015 234 quickly stoke his fingertips under his chin and thrust them forward as a sign of defiance and/or derision. Another gesture has two versions: Holding your hand palm down with the index and little fingers straight out, and the others curved inward, symbolized the devil’s horns, and the message is to ward off evil. If the same gesture is done with the fingers pointing upward, it is an obscene message. a generalization and should be treated as such.).
wo m e n in p u b l i c 7.
Women traveling in Italy should be aware of the cultural tendencies. In northern Italy, for example, a single woman is usually able to eat at a restaurant without being approached, but if she looks around a lot, she will likely attract attention, and men will stare and smile. In southern Italy, however, a woman eating at a restaurant alone is not the norm, and she may receive the unwanted attention form men. Taking along reading or work materials to lunch will indicate that a woman is alone by choice.
Di ni ng 8.
In Italy, dining is typically continental-style with the fork steadfastly held in the left hand and the knife in the right hand. Wrists should remain on the table at meals and one should never place one’s hands in one’s lap. The knife is used to pick up cheese, while all fruit, except grapes or cherries, should not be eaten by hand.
9 . wi ne i n m e a l s
Wine is customarily included with meals. If you do not wish to drink, turning the glass down before the meal will signal your preference not to partake of wine. Note that Italians consider wine to be something which is sipped and to drink in excess is considered quite offensive.
g i f t s up o n i n v i te 10 .
When invited to dinner at an Italian home, taking some sort of gift is suggested protocol. A bouquet of flowers for your hostess is the preferred gift. Note that red roses, which are reserved for courting, or chrysanthemums, which are used at funerals, should likely be avoided in bouquets. Fine chocolates or pastries are another suggested item, especially in homes where children are present. Liqueur is another option but should not be confused with any alcoholic offering. For example, wine is not a good gift option as it has likely already been selected for dinner by the host, and in any case, should always be of an excellent vintage. . Do not give handkerchiefs, or knives, all of which can be associated with sadness.
ex p r e s s i n g th a n ks 11.
To express thanks (which is the suggested protocol), send a note the next day. The inclusion of flowers or a basket of fruit is optional, although it will likely be very well-received by the host.
se l f -p r e s e n tati o n 12.
Although dress is Europe generally casual and should conform to the temperate climate, the Italians are very conscious of self-presentation and Italy is reputed as a major center of European fashion. Even in casual settings, clothing should be somewhat chic and well-tailored. Business wear is more conservative; suits are the norm for both men and women. Makeup and jewelry for women is normal for women. Modest dress is best when visiting a church or cathedral
B U S I N E S S C U LT U R E
TIPS ON DOING
B USINE SS Information for Business Travelers In general, what is considered good business practice in the rest of Europe and the United States also applies when doing business in Italy. Businesspeople in Italy also appreciate prompt replies to their inquires, and they expect all correspondence to be acknowledged. Conservative business attire is recommended at all times. Business appointments are also required, and visitors are expected to be punctual. The “golden keys” of customary business courtesy, especially replying promptly to requests for price quotations and to orders, are a prerequisite for exporting success. In general, European business executives are formal in the business dealings; therefore, it is best to refrain from using first names until a solid relationship has been formed. During the first stages of conducting business, it is best to let the prospective buyer take the lead since the “getting down to business” approach may be considered abrupt. Avoid commenting on political events or negative comments about the country. Some positive and sincere observations about the Italian culture, style, art, history, cuisine, or music are always appropriate. Italian business executives tend to use titles indicating their position in the firm. Friendship and mutual trust are highly valued, and once a relationship has been firmly established a productive business association can usually be counted upon. Italian buyers appreciate style, quality, and service, but are also interested in delivered price. Care must be taken to assure that stated delivery dates will be maintained and that after-sales service will be promptly honored. Italians, and Europeans in general, are concerned that after placing an order with a supplier that the delivery date be honored. While there are numerous factors that may interfere with prompt shipment, the exporter must allow for additional shipping time and keep in close contact with the buyer. Meeting delivery schedules is of prime importance. It is much better to quote a later delivery date that can be guaranteed than promise an earlier delivery that is not completely certain.
APPAREL AND TEXTILE INDUSTRY overview Further declines after six straight years of negative trends in apparel and footwear: Overall sales of apparel and footwear continued to decline in both volume and value terms in 2015. Optimism returned to industry players over the first half of 2014 as favourable weather conditions and the positive impact of the 2014 FIFA World Cup on sales of sportswear were highly positive influences until July. During the second half of the year, however, the category relapsed into a sharp decline and this led to an overall fall in volume and value sales over the second half of the year and during 2015 as well.
L A B O R C L I M AT E
labor f o r ce
5%
AGRICULTURE
32%
INDUSTRY
2 4 . 2 7 M I L L I O N E S T.
63%
SERVICES
(labor force structure by occupation)
MA JOR INDUSTRIES
UNEMPLOYMENT
R ATE: 9 . 3 %
There is a strong tradition of self-employment in Italy, particularly in
General services is the largest industry in Italy, followed by
the agricultural and services industries, although less so today than
industry and agriculture. Italy’s major industries include: Ceramics,
in the past. Nowadays, industry and construction workers are
chemicals. clothing, fashion and luxury goods, food processing,
joining the ranks of independent workers. There is also a large
footwear, iron and steel, machinery, motor vehicles, textiles and
informal work sector in Italy, with estimates suggesting it comprises
tourism.
anywhere from 15 to 27 percent of GDP. The service sector accounts for nearly two-thirds of Italy’s GDP. Unemployment among 15 to 24 year-olds has increased to 31.9 %
Tourism employs more than 400,000 employees, making it a major
With approximately one in three young Italians unemployed, many
player in the Italian economy.
are emigrating in search of better job prospects. Italy’s official statistics agency, Istat, Reports between 2008 and 2011, more than one million jobs for young people (aged 15 to 34) were lost.
m an ufa cturing
Manufacturing in Italy is characterized by motor vehicles, fashion and luxury goods, life sciences, aerospace, chemicals, ICT, logistics, renewable energies and precision machinery. Automotive manufacturing is perhaps the largest player in the Italian economy. Major carmakers operating in Italy include Fiat, Ferrari, Alfa Romeo, Lancia, Lamborghini, Maserati, Aprilia, Ducati and Piaggio. The automotive sector also participates in substantial R&D efforts, bringing together research centers and universities. Fashion Industry HIGHLIGHTS
EMPLOYS 700,000 WORKERS IN 70,000 COMPANIES
FA S H I O N & L U X U R Y
Employing 700,000 workers in 70,000 companies, and with annual revenues of nearly 50 billion EUR, Italy’s fashion/luxury industry is the world’s strongest. Brands names such as ARMANI, GUCCI, PRADA, DOLCE & GABBANA, CAVALLI and BULGARI are recognized worldwide. The industry is home to numerous SMEs.
ANNUAL REVENUE OF 50 BILLION EUR
s a l ar ies hours of work: 3 8 / W E E K & wages Most salaries in Italy are determined by collective bargaining agreements. These agreements determine minimum wage levels for positions within each job category. Most major companies offer salaries that exceed these minimum wages. Most employees receive an extra month’s salary in December, the so-called 13th month’s salary (tredicesima mesilità) or a bonus (gratifica natalizia). Some employees even receive a 14th month’s salary (quattordicesima mesilità) before the summer holidays. Contractual hourly wages have risen by 1.2 percent over the past year, the lowest rate since 1983. Furthermore, the gap between wages and inflation is 2.1 percent, the highest since 1995. Currently collective agreements for this year are still under negotiation, leaving 4.3 million workers, including 3 million in the civil service, in
Although Italy has a reputation for a laid-back balance between work, family and play, the average Italian works 38 hours per week, which is greater than the number of working hours averaged in France (35.6), Denmark (37), Netherlands (37.1) and the UK (37.5). Countries with work weeks averaging 40 hours include Poland, Luxemburg and Greece. Except during holidays and festivals, offices are typically open weekdays from 8:30 am until 1 pm and from 3 until 6 pm. Banks are open weekdays from 8:30 am until 1:30 pm and from 2:45 until 4:15 pm. Stores are generally open daily from 9 am until 1 pm and from 4:30 until 7:30 pm, except on Sunday. Some stores, particularly in cities, do not close for the afternoon break.
a sort of contractual limbo
P U R C H A S I N G P AT T E R N S apparel & footwear Footwear registered the sharpest value and volume declines of all major apparel and footwear categories in 2015, which was mainly due to the generally cautious approach to spending and high possession rates forapparel and footwear in Italy. In menswear, the general attitude is to buy fewer items, although for some purchases, relatively high-quality items balanced out the effect of volume decreases, which were less significant than value declines. Volume declines were marginal in womenswear in 2015, while current value sales dropped by 2% due to falling average unit prices. Childrenswear and sportswear also registered declining sales, although at less severe rates, as Italians are generally spending money on their children despite restricted purchasing power. 2015 brought good weather conditions throughout the year and the number of sporting events held in Italy increased significantly. Accessories and hosiery also recorded moderate sales declines in 2015 as these are low-priced items.
PRICE COMPETITION During 2015, apparel and footwear in Italy was once again characterised by the fierce competitive landscape, with high numbers of retailers and brands present. This led to strong price competition across the board. While leading economy apparel and footwear specialist retailers such as OVS, Benetton and Inditex rely mainly on their lower prices, more premium retailers focus on emphasising the added value of their brands in terms of higher quality. In addition, the level of competition in the industry is set to intensify further following the entrance of low-cost retailer Primark into Italy at the beginning of 2016.
GINREOWTH -TAIL ING Italy’s store-based apparel and footwear specialist retailers are increasingly focusing on developing their online presence through dedicated merchant websites. Web-to-store strategies have become a normal way of operating for most major store-based apparel and footwear players. The free returns services which were once the core strength of pure players are increasingly being offered by multi-channel players. In response, some pure players are planning to open store-based outlets in order to create proximity relationships with their customers. Internet retailing remained the most dynamic retail distribution channel in apparel and footwear in Italy during 2015.
AWARE OF ETHICAL FASHION
Consumers in Italy are known for their strong environmental awareness and their focus on sustainable production. Italians generally show a strong willingness to opt for environmentallyfriendly and healthy products when it comes to all of the different types of consumer goods they use. Consequently, Italian consumers are generally very fond of fair-trade and organic products and this interest first became apparent in packaged food and fresh food, consequently spreading to non-food products as well. This tendency was also observed in apparel and footwear in 2014, with increasing numbers of consumers showing greater interest in ethical fashion. While apparel and footwear in Italy features many retailers and brands ranging from economy to premium suppliers, consumers are becoming increasingly cautious when purchasing clothing, showing greater interest in the manufacturing process and the country of origin as well as the working conditions under which their apparel and footwear brands are produced. They often want to know if the people who actually work in the factories are paid adequately for the work they do. Consequently, they are not only looking for lower prices but also clothing that is ethically and sustainably produced. As a result of this, the leading retailers in apparel and footwear such as the Benetton Group SpA, Inditex Group and Hennes & Mauritz (H&M) Italy, have begun to focus more seriously on clothing made from natural fabrics such as cotton, especially organic cotton, while Benetton has gone further by abolishing the use of angora, which is often criticised due to the cruelty that its production entails for angora rabbits, among its materials.
apparel
s& umanufact ppliers u re rs Combimar & Agemar SpA
Via Campania 3 5 20090 Segarte Mi Italy
Bencom S.R.L. 1,427,421 kg Average Shipment to the U.S
Via Villa Minelli, 1, Ponzano Veneto, Treviso,
Albini & Pitigliani SpA
Telephone: +39 0422 519111
279,380,577 kg Average
Customers: Benetton Trading Usa Inc. Benetton Mexicana S.A. De C.V. Becton Dickinson De Mexico
Contact: Viale G. Marconi, 46, Prato, Italy, 59100 Telephone: +39 574 5730 Customers: ALPI USA Inc. Atlantic Marine Services Alpi Usa Inc. Top Products: textiles for marine purposes and furniture
Via Villa Minelli, Ponzano Veneto,
Top Products: Footwear, apparel, accessories and advertising material
Contact:
Italy, 31050
Shipment to the U.S
Contact:
Customers: Benetton Mexicana S.A De C.V Benetton Trading U.S.A Brugnaro Salinas De Ca SA Praga Limitada
Contact:
Top Products: leather goods, cotton fabric
Shipment to the U.S
Telephone: +39 0422 519111
Shipment to the U.S
Customers: Interteam Sa De Cv Inca Lines Sac Tma Aduana, C.A.
1,842,658 kg Average
Treviso, Italy, 31050
56,981,096 kg Average
Telephone: +39 390 2274 3061
Benind S.p.A
Top Products: Jewerly, accessories, apparel
Tessitura Di Robecchetto Candiani S.p.A 11,109,658 kg Average Shipment to the U.S Contact: Via Arese 85, Robecchetto Con Induno, Milan, Italy, 20020 Telephone: +39 0331 876220 Customers: Citizens Of Humanity, Llc 7 For All Mankind Llc Costuras Y Manufacturas De Tlaxcala Top Products: Fabric, denim, textiles
TRADE AGREEMENTS
overview Our two countries share a robust trading relationship. The United
States is Italy’s third-largest export market, and Italy is the United States’ 15th-largest export market. Italian exports to the United States in 2012 totaled $35.5 billion, a 16.8 percent increase over 2011. Meanwhile, American exports to Italy in 2012 totaled $16.0 billion, a 1.1 percent share of total U.S. exports. Together, the EU and the United States account for nearly half the world’s GDP and 30 percent of world trade, contributing to economic growth and supporting millions of jobs on both sides of the Atlantic. Between five and six million U.S. tourists visit Italy each year.
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.
t rade a gr e eme n ts 1. 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.
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.
tra d e c o n fl ic ts
2. Italy Friendship, Commerce and Navigation Treaty
Trade conflicts involving the two nations arise from the so-called
The pact was primarily made to further strengthen traditional
import of small arms and light weaponries which include Brazil,
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:
Small Arms. This particular problem focused on the export and Germany, Russia and China aside from Italy and US. Certain issues had to be resolved such as:
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. 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.
THE FUTURE TRADE 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.
T R A N S P O R TAT I O N
m a in l a din g ports : SERVICE TO THE U.S Levorno Genoa La Spezia
The imports of Italy from US for the year 2014 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; semiconductors; industrial machines; metallurgical grade coal; and organic chemicals. The last item earned a total of $287.4 million or 2.3% of the total.
$12.6 B
Cagliri Gioia Tauro
mimaj o r po rt s Italian exports to the US gained a total of $32.7 billion for the year 2014. 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%.
$ 32. 7 B
ma jor e x po rts 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. 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.
shcomipping pa n ie s
R OU T E 1
mediterranean pacific Service
(MPS)
R OUT E 2
(MGX)
mediterranean GULF EXPRESS
R OUT E 3
ZIM CONTAINER SErVICE ATLANTIC
(ZCA)
hapag-lloyd
T R A N S I T T I M E S I N D AY S port of un-lading
port of lading
Westbound
New York
Norfolk
Livorno
15
18
21
Genoa
14
17
20
port of un-lading
New York
25
26
Norfolk
22
23
Savannah
19
20
40 ft = $2,499.67
in e r
Genoa
con
ta
Livorno
cost
Eastbound
port of lading
Savannah
fo
Contact In
r.l. d (Italy) s. Hapag-lloy 10/3 la Vittoria Piazza Del ova i-16121 Gen Phone: +39
-1 010 25490
.l. Hapag-lloyd (Italy) s.r Via Paleocapa 7 i-57125 Livorno 641
Phone: +39 0586 24
msc shipping
T R A N S I T T I M E S I N D AY S port of un-lading
port of lading
Westbound
New York
Norfolk
Genoa
13
20
23
La Spezia
16
23
22
port of un-lading Eastbound
Genoa
La Spezia
33
31
Norfolk
25
23
Savannah
23
21
40 ft = $2,493.64
cost fo
Contact In
erranean MSC Medit . ompany S.A Shipping C u 12-14, Chemin Rie a 1208 Genev d gva.ch Switzerlan e-mail: info@msc
iner
New York
con
ta
port of lading
Savannah
maersk shipping
T R A N S I T T I M E S I N D AY S Contact Info p The Maersk Grou Esplanaden 50 en K 1098 Copenhag Denmark
Phone: +45 33 63
33 63
port of un-lading New York
Norfolk
Genoa
12
19
22
La Spezia
15
21
23
port of un-lading Genoa
La Spezia
30
27
Norfolk
23
20
Savannah
21
18
40 ft = $2,505.70
iner
New York
con
ta
Eastbound
port of lading
Savannah
cost
port of lading
Westbound
RISKS & BENEFITS
ri s k st a tement
Italy’s notable economic, fiscal, political, and financial risks
Italy’s operational environment is middle-of-the-road by European
recession, which ended around the start of 2015, and a recovery
standards, albeit with prevalent downside risks. Recent reforms have gone some way towards addressing the labour market rigidities in Italy. The Jobs Act, which was approved by the cabinet on 20 February 2015, makes it easier for employers to dismiss staff and is intended to make businesses less apprehensive about taking on additional workers. However, trade unions remain in a powerful position to obstruct further reforms through labour strikes. Bureaucracy is complex and corruption is rife, especially in the south. Organised crime has become more entrenched since the onset of the economic crisis and is present in business sectors across the country. A sharp north-south divide exists, with a contentious system of fiscal transfers from the rich, industrialised north to poorer southern regions. Chief among the problems Italy has faced in recent years have been falling investment, evaporating business confidence, and the socio-economic consequences of a prolonged high unemployment rate. These issues are likely to be mitigated in the one-year outlook by the recent increase in consumer and business confidence, pointing to the resumption of economic growth in 2015. This is in large part due to external factors such as the drastic fall in global crude oil prices, the depreciation of the euro, and improving external demand for Italian manufacturing. The current government has also pledged to address rigidities in business regulations and the legal system, including promises to remove regulations that require companies to register with local chambers of commerce and to reduce the backlog of civil and commercial cases in the courts. However, taxation on labour and capital remains high relative to comparable countries and Italy struggles to keep up with the majority of its EU counterparts in attracting and retaining foreign direct investment. A 10-percentagepoint reduction in the regional production tax (IRAP) in May 2014 was partly financed by an increase in the tax rate from 20% to 26% on income earned from financial instruments (with the exception of government bonds).
po l i ti c a l o u tl o o k continue to prevail. The economy has endured its longest postwar is underway. However, the upside is limited by lingering fallout from deep austerity measures implemented throughout 2012 and 2013, tight credit conditions hampering consumer spending and business investment, and higher-than-normal unemployment. More positively, Italy’s sovereign borrowing costs are at record lows, and suggest the markets are taking a relaxed view of the broad-based coalition government now being led by its second prime minister, Matteo Renzi, representing the Democratic Party. The reformed administration began to shape its electoral reform of both the lower house and senate during 2014, but it could struggle to extend its mandate to deal with structural obstacles weighing on Italy’s growth performance since the adoption of the euro. Despite a welcome fall in both short- and long-term borrowing costs, we remain wary that Italy remains vulnerable to a resumption of market tensions, which could be stoked by lack of a united political front regarding the need of further and more credible structural reforms. Ultimately, Italy has little room for maneuver, unable to shed the economic downturn characteristics, alongside deteriorating fiscal metrics, with the public debt ratio climbing to 132.1% of GDP in 2014. There is the persistent fear that a renewed lack of political direction on further economic liberalization measures and a slow-burning economy remain lingering threats to demand for Italian sovereign debt and the cost of borrowing at a time when Italy faces tough financing challenges. However, we acknowledge the calmer and more resilient financing environment continues to bear the fruits from the European Central Bank’s revamped bond-buying program and some welcome progress on electoral and labormarket reforms. Nevertheless, a key risk remains if Italy fails to deepen its structural reform program process to elevate the country’s potential growth, which is uncomfortably low when placed alongside its growing mountain of public debt
benefits Italy’s industrial triangle (Milan, Turin, Genova) is favourably positioned near other rich areas such as the Rhone-Alpes and the European core of the heavy industry: the Rhine-Ruhr region. In addition to this, as the EU has gradually expanded to the east and embraced former Eastern Block countries, Italy has gone from being the southern border of the Union to occupying its very centre. Whilst Italy’s territory mostly borders the Adriatic and Mediterranean seas, Italy shares its frontiers with fellow EU members France, Austria and Slovenia, as well as with Switzerland. Moreover, a short ferry trip separates it from Greece and all the former members of Yugoslavia. Vibrant sectors in Italy include tourism, raw mineral extraction and processing, textiles, car production and of course fashion. Italy has one of the highest export rates in the world. Shoes, Textiles, Luxuries: A large number of Italy’s small producers specialize in the production of shoes, leather goods, and textiles, as well as domestic furniture. The area of manufacturing is concentrated in the Central Italian regions of Tuscany and Marche. After manufactured engineering, this is the biggest foreign currency earner in the country. The industry, however, is constantly under pressure from cheaper cost producers and represents income-elastic goods, which suffer sharply in the wake of any drop in external demand.
BIBLIOGRAPHY “Country Reports: Italy.” Italy Country Monitor (2016): 1-19. Business Source Premier. Web. 23 Feb. 2016. “Italy.” Italy Country Profile (2014): 1-85. Business Source Premier. Web. 23 Feb. 2016. “Going Global Career & Employment Resource Guide For Italy.” Italy Career Guide (2013): 1-165. Business Source Premier. Web. 23 Feb. 2016. “Italy 2015 Country Review.” Italy Country Review (2015): 1-323. Business Source Premier. Web. 23 Feb. 2016. https://panjiva.com/search/global-supplier?q=apparel&xhistory=eJx1jctqwzAURP9F61BkyQ8p0EXJqjYmfYQUUsJFWLLrRJaMLKc Npf9exXhRSLqdMzPnG_VO1a32yqHlOxoH8E5IBVJ4gRYBWjlWHoSRUNmuF-aM9gskRv-hjG-r1p_ https://panjiva.com/shipment_search/results?q=apparel&type=all_import “Apparel and Footwear Industry in Italy.” (2016). Euromonitor. Web 23 Feb. 2016 https://www.communicaid.com/cross-cultural-training/blog/benefits-of-doing-business-in-italy/ http://www.state.gov/r/pa/ei/bgn/4033.htm https://www.hapag-lloyd.com/downloads/pdf/Tradeflyer_North_America_Mediterranean_Aug2014.pdf https://my.maerskline.com/schedules https://www.msc.com/spadoni/help-centre/tools/search-schedules?link=a1cbab32-d26c-44b1-a076-20d725c46cbb http://www.timeanddate.com/holidays/italy/ http://www.zim.com/countrysites/americas/usa/en-us/pages/lineinfo.aspx?trade=&line=MGX&Service=ZCS&FromType=T http://www.zim.com/countrysites/americas/usa/en-us/pages/lineinfo.aspx?trade=&line=MPS&Service=ZCS&FromType=T
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FASM 420 - Global Sourcing