United States Trade Policy: Current and Future Role in a Global Economy

The open markets are filled with competitors trying to trade and sell their goods and services. Fair Trade laws are enacted to provide an equal opportunity in the marketplace for developing countries and small producers of goods. To protect their financial economies, .governments intervene by placing huge taxes and quotas on exports, to restricting producers who try to flood the markets with their products. This intervention also helps those producers who are facing unfair trading practices. Companies who provide cheaper made products, can cause a deficit for any country by flooding their economy with these exports.

Eliminating trade barriers creates a field which people can play a role internationally to compete one another in order to improve national as well as international economy (Balaam, and Dillman, 2011b). Liberal trade theorists argue that foreign investment accompanies increased trade and that

Proponents of globalization put forward that the benefits of free trade out weigh the costs. International investment and trade have been the machines that drive growth and development... ... middle of paper ... ...developing nations it is the nation's lower standards of labor that make globalization possible and indeed profitable. Allowing a company to pay a laborer a fraction of what his counterpart would be paid in a developed nation. Globalization has a tremendous amount of support as well as a tremendous amount of opposition. While multinational companies tend to push for globalization and therefore higher profit margins, opponents work hard to make sure that developing nations are not taken advantage of in the process.

Asset Allocation Free trade enhances the allocation of worldwide assets. if the countries or individuals can do a trade for the things they require, they can concentrate on making the ones they do best. Imports have a tendency to suppress inflation,... ... middle of paper ... ...wever under fix exchange the government needs to maintain the exchange rate and in order to do so they have to sell their foreign assets and reserves against the local assets leading to a reduction in the foreign reserves of the country. Therefore the monetary policy is ineffective under fix exchange rates. REFERENCING: Jackson, J (1993) Basics of macro economics, Macro economics journal, 833-14 Keynesian (1899) Keynesian Theory and its implication, Journal of Macro Economics, 248-95 Ferguson, Brian S. (2013) General theory of employment, University of Guelph, Discussion papers, 2013-06, 186-49 Vroey, M (1994) Nash equilibrium & working, Journal of Business Economics, 208-89 Jacob, B (1987) Fixed Exchange rate policies, University of Cambridge, London, 293-97 Walt, H(1993) Monetarist theory & Classical Theory, McGraw Hill, London Press, London, 98- 122

FTA’s are agreements between two or more nations which remove tariffs on certain products (NZ Customs Service, n.d.). This ultimately provides international businesses with a larger likelihood to succeed, as they can sell their products for more competitive prices in order to compete with home grown ones, providing less barriers to entry (NZ Customs Service, n.d.). While the most common focus of trade policy is international trade, the use of trade policy differs in many nations and in some instances, trade can be very restrictive. Trade policy plays a vital and important role in ensuring the success of a nation’s economic

In this essay I am going to explain such transformations and illustrate the ideas above. Neoliberalism, though considered by some people as equivalent to globalization, is more like a terminology of economics. Basically “neoliberal” refers to free market, which favors little government interference, free trade, open market, high competitions, emphasis on human rights, etc. Supporters of neoliberalism want governments to deregulate the economies, to reduce (or even eliminate) tariffs, to allow free trade, so that the entire global economy would be better off. In the contemporary globalization, the nature of international trade has made great changes.

(Micheal, Stephen. 2011) Protectionism Economists since the time of Adam Smith have believed that free trade across national borders leads to good effects on labor division among countries, that free trade leads countries to increase their production and consumption, increase the living standard of nations across the world. Protectionism is an economic policy that restricts free trade in order to protect domestic market from foreign competition in the way of different interventions by the government. Countries engage in protectionism in order to achieve political, social and economic goals, to benefit the domestic goods or interests. To create jobs by protecting industries from foreign competition and to change the competitive environment.

When new industries are introduced, trade barriers help to ensure that these businesses become established domestically instead of allowing foreign competition to overtake the new industries quickly. Protecting again foreign countries creating monopolies by selling goods for a price below what other countries can even produce them for is a high priority among many nations. Trade barriers also protect against cheap foreign labor from flooding the market and increases employment domestically. Tariffs generate additional revenue for the federal government, which benefits the economy. Overall, trade barriers, including tariffs, quotas, and subsidies, provide necessary protection in order to maintain a healthy

Globalization may be championed as a gateway to financial growth for all nations, but only certain nations benefit from it. Global trading and integration has a negative effect on undeveloped nations and developed nations in many ways including; political systems, sovereignty, economy, way of life and much more. Earlier in the essay I asked ‘do the pros outweigh the cons when it comes to globalization’ and from my research I don’t see any real benefit. I don’t believe we should eliminate global business, but better the already lacking regulations and probably increase the standard of living equally for the world.

There are many arguments for and against globalization, some pros and cons include: • Pros of globalization: o Free trade reduces barriers o Promotes global economic growth: creates jobs, and the market becomes more competitive for companies, which lowers prices for consumers. o Information is being shared: technology and becoming culturally aware, companies outsource to each other. • Cons of globalization: o Makes the rich richer and the poor poorer o Large companies can exploit tax havens in other countries o Outsourcing of jobs/exploitation of labor: A major problem for developed countries is that jobs are being lost to lower cost countries. Companies outsource to other countries because it’s cheaper, but they usually ignore safety standards to produce