Paper Summary:

The paper examines Carter Dougherty's article "Countries Stepping in to Finance Export Trade" that discusses how even when business deals are established, financing is impossible to obtain so the deals cannot be executed. The paper explains that this means fewer choices for U.S. consumers as well as less business for international firms that do business in the U.S. The paper shows how the world economy is interdependent in the sense that economic difficulties in one nation, specifically the credit market in the United States, have an international impact. The paper argues that creating trade alliances between nations will prove increasingly challenging if routine credit in the import/export market is impossible to obtain.

From the Paper:

"Credit is tight--all over the world. Even enterprises once considered to be virtual 'sure things' are now in doubt, as banking jitters about taking risks with available cash are at an all-time high. Once upon a time, according to Carter Dougherty of The New York Times, trade finance was considered virtually risk-free for banks and other financial institutions. But, as he outlines in his article, "Countries stepping in to finance export trade," this has changed because of the global credit crisis that began in America. This development in the import/export market is especially worrying because trade finance, unlike real estate or investing in the stock market, was thought to only have the small risk of merchandise damage, and to be a 'loan' in name only. However, that is no longer the case and even routine trade finance loans are being treated with the caution of subprime real estate."

Sample of Sources Used:

• 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

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