International Trade and Investment Essay Example | Topics and Well Written Essays - 2250 words

International Trade and Investment - Essay Example The second part is the discusion about the possible privatization of ports and its effect in port charges and other pricing. The last part is the evaluation of two methods of depreciation used by these shipping companies. Foreign Direct Investment (FDI) has become an increasingly important part of the international economy. Due to the high mobility of the factors of production in the shipping industry, shipping investments in foreign subsidiaries do not necessarily imply strong links between the investment and the home and host countries. It is thus debatable whether the term Foreign Direct Investment should be utilised in the same manner as for other sectors. In a recent article last May 4th in South Africa, a current law implemented has a great impact in the sea freighting business, especially in the issue of massive maritime claims. A lot of shippers are foregoing their deposits due to the redelivery of hand back ships on charter. This critical situation that they are in can affect the acquisition of supply and meeting their foreign demands. The increasing inability in making use of the popular New York Rule B attachment procedure is helping South Africa regain its reputation as a jurisdiction in which shippers can seek assistance in obtaining security for their claims, or having obtained a judgment or arbitration award in their favour. This tangible mechanism in the shipping industry is making an advantage to shippers in their returns of investments due to substantial freight costs set from this procedure. This situation is a prelude of the sea port's privatization which greatly affects costs in shipping companies. Thus, increasing port charges for these companies. More than 50 countries privatised their port systems between 1991 and 1998. The common privatisation program includes the transfer of stevedoring, yard handling, pilotage, line handling and gate security to private port operators, while ownership and control of basic infrastructure remains with a public or quasi-public port authority. Also in a recent article last May 06, 2009, the Cape Town port terminals have performed well in the annual NOSA (National Occupational Safety Association) audits conducted in facilities operated by Transnet Port Terminals, taking their place alongside the sterling efforts of other state-owned