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The global economy and international trade
The global economy and international trade
The global economy and international trade
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Imports and exports between countries is one of the most important factors of any economy. Imports into a country create income for our trading partners, and our exports create income domestically. Each trading partner is inter-dependent upon the other, and any shift in production or consumption can have a significant effect on a country's Gross Domestic Product. Examining the Unites States top trading relationships will shed light on the amount of economic dependence America maintains with the World's top traders. In 2013, the World Trade Organization published its World Trade Report. Found within this report were the details on the World's top importers and exporters of merchandise. In ascending order, the top exporters were; #1 China, #2 United States, #3 Germany, #4 Japan and #5 Netherlands. The top importers were; #1 United States, #2 China, #3 Germany, #4 Japan, #5 United Kingdom. But even a developing country can dominated the world's economy because in 2013, China became the World's number one exporter of merchandise and held the number two position behind the United Stat...
Canada and the United States are the largest trade partners in the world. It is the result of the geographical position of two countries and the free trade between two countries. It should be a great thing for the economies of both countries, but since the North American Free Trade Agreement was signed, American businesses almost took over the Canadian economy. When the American companies started to make more business in Canada, it brought more jobs and money to the country in the short-term. But as a long-term effect Canadians became even more depended on the U.S. as the American companies started dominating Canadian companies in Canada. Also, today Canadian manufacturers have little protection from the government when ch...
Trade is essential to overcome the dollar gap that prevented foreign marketing of United States goods (Melanson and Mayers, 159). There are many economic issues which face the nation at this time. A recovery from World War II and the Korean War, a recession, a change in the political party of the president, and several other issues. Thus, this must be a time of strong economic leadership. The policies made and legislature passed must steer the United States through this apparent storm and give the nation a chance to rest from the hecticness of the first half of the century.
The United States and China share the most imbalanced bilateral trade relationship in the world. The United States imports more goods from China than it exports to a tune of $202 billion dollars each year. All told, China alone accounts for nearly 26% of the United States' $725.8 billion trade deficit. “Increasingly, this imbalance has been the subject of a major political backlash within the U.S. congress, where some have charged that the US is destroying its industrial base to support a communist country's industrialization." http://worldnews.about.com/od/china/a/china_trade.htm
When we look at just a few of the specifics of our trade with the U.S., we find that:
The United States has for over two centuries been involved in the growing world economy. While the U.S. post revolutionary war sought to protect itself from outside influences has since the great depression and world war two looked to break trade restrictions. The United States role in the global economy has grown throughout the 20th century and as a result of several historical events has adopted positions of both benefactor and dependent. The United States trade policy has over time shifted from isolationist protectionism to a commitment to establishing world-wide free trade. Free trade enterprise has developed and grown through organizations such as the WTO and NAFTA. The U.S. in order to obtain its free trade desires has implemented a number of policies that can be examined for both their benefits and flaws. Several trade policies exist as options to the United States, among these fair trade and free trade policies dominate the world economic market. In order to achieve economic growth the United States has a duty to maintain a global trade policy that benefits both domestic workers and industry. While free trade gives opportunities to large industries and wealthy corporate investors the American worker suffers job instability and lower wages. However fair trade policies that protect America’s workers do not help foster wide economic growth. The United States must then engage in economic trade policies that both protect the United States founding principles and secure for tomorrow greater economic stability.
The Triangular Trade was the fundamental foundation of many economic and social developments of this nation. However, this historical turning point in America’s history did not develop overnight. In Africa, the practice of enslavement had been occurring internally for centuries, but as the Triangular Trade developed between the Old World and New World, the slave labor system transformed and began to become an integral part of many nation’s economic systems. As the demand for agricultural products, such as tobacco and sugar, increased, the Atlantic Slave Trade also expanded as the need for laborers proliferated. Thus, the Triangular Trade was the building blocks of the United States, economically affected the world, and ultimately impacted racial
Globalization and industrialization contribute to the existence of sweatshops, which are where garments are made cheaply, because they are moving production and consumption of those cheap goods. Industrialization has enabled for global distribution, to exchange those goods around the world. They can also set apart the circumstances of consumption and production, which Western countries as mass consumers, are protected from of producers in less developed countries. These factories are usually located in less developed countries and face worker exploitation and changes in social structures. Technological innovation allows for machines to take the place of workers and do all the dirty work instead of workers doing hours of hard work by hand.
In 1993, the North American Free Trade Agreement (NAFTA) was signed by President Bill Clinton. It was said that Clinton hoped the agreement would encourage other nations to work toward a boarder world-trade pact. In 1994, the agreement came into effect, creating one of the world’s largest trade zones between United States, Canada, and Mexico.
US-China share a significant relation in terms of trade which has expanded substantially over past three decades. This can be understood by the fact that total trade between U.S and china grew exponentially from $2 billion in 1979 to staggering $562 billion by year end of 2013. Currently China is United States second largest partner in terms of trading, its third-largest market for export, and its biggest import source. With a total estimate of approximately $300 billion China is one of the biggest market for U.S. firms (this fact is based on U.S. exports to China and sales by US firms which have significant investment in China). In fact for many companies it is important to participate in China’s market to stay relevant and competitive in current business scenario. For example automobile major General Motors (GM) has invested heavily in China, sold more cars in China as compared to United States for year range 2010-2013. Whereas on other hand, consumer in United States benefit greatly from the import of low-cost goods from Chinese manufacturer. Currently China is rated as the largest foreign holder of US Treasury securities (approximately $1.4 trillion as of December 2013). Another major aspect is that because of China’s purchases of US government debt has helped United States in keeping the prevailing interest rates low.
A nation that possesses strong industry, a favorable trade balance, and a lack of dependency upon foreign states is optimum. This ideology is one that has been strongly advocated throughout America’s existence, by politicians from Alexander Hamilton to Pat Buchanan. When a nation faces a trade deficit, it means that competing states are producing more efficiently, and ultimately making profiting. Also, a deficit means that industry and jobs, which could exist domestically, are being “stolen” by foreign nations. According to mercantile policy, this is a zero-sum game; when a competitor is winning, we are losing. The United States faces this situation, having evolved from the world’s largest creditor nation during and following World War II to its current position as the world’s largest debtor. Because America imports much more than it exports, an additional 600 billion dollars is needed every year to balance the equation. This money is “borrowed” through the sale of government assets, sometimes to domestic investors, but increasingly to foreign ones. Many circumstances can be blamed for this situation: cheap foreign labor, foreign government subsidy, and closed foreign markets, among others. The question therefore arises: how to negate obstacle...
Few governments will argue that the exchange of goods and services across international borders is a bad thing. However, the degree to which an international trading system is open may come into contest with a state’s ability to protect its interests. Free trade is often portrayed in a good light, with focus placed on the material benefits. Theoretically, free trade enables a distribution of resources across state lines. A country’s workforce may become more productive as it specializes in products that it has a comparative advantage. Free trade minimizes the chance that a market will have a surplus of one product and not enough of another. Arguably, comparative specialization leads to efficiency and growth.
China’s economical strength comes from its international trades as the economy has grown to a rate of 10.3% in 2010. It has become the world’s largest exporter in the global economy. In the area of trade, three major strengths of China are 1) it is the single most important challenge for the European Union (EU) trade policy, 2) China is the second trade partner behind the U.S., and 3) it is the EU’s biggest source of imports by far with the dramatic increase in the EU-China trades over the recent years. The EU exports of goods to China were 113.1 billion Euros and in imports was 281.9 billion Euros in 2010. The service exports were 18 billion Euros and in imports were 13 billion Euros in 2009. China has also established trades with Australia. Recently, the two countries have been cooperating and assisting each other in industries such as agriculture, energy and minerals as they continue their free trade agreements (Jia Qinglin).
During the twentieth century, the world began to develop the idea of economic trade. Beginning in the 1960’s, the four Asian Tigers, Hong Kong, Singapore, South Korea and Taiwan, demonstrated that a global economy, which was fueled by an import and export system with other countries, allowed the economy of the home country itself to flourish. Th...
Globalization, the acceleration and strengthening of worldwide interactions among people, companies and governments, has taken a huge toll on the world, both culturally and economically. It’s generating a fast-paced, increasingly tied world and also praising individualism. It has been a massive subject of matter amongst scientists, politicians, government bureaucrats and the normal, average human population. Globalization promoted the independence of nations and people, relying on organizations such as the World Bank and also regional organizations such as the BRICs that encourage “a world free of poverty” (World Bank). Despite the fact that critics can argue that globalization is an overall positive trend, globalization has had a rather negative cultural and economic effect such as the gigantic wealth gaps and the widespread of American culture, “Americanization”; globalization had good intentions but bad results.
Free trade is a form of economic policy which allows countries to import and export goods among each other with no government interference. In recent years there has been a general consensus in economist’s stance on free trade. They view free trade as an asset. Free trade allows for an abundance of goods with increased varieties and increased availability. The products become cheaper for consumers and no one company monopolizes an industry. The system of free trade has been highly controversial. While free trade benefits consumers it has the potential to hurt manufacturers and businesses thus creating a debate between supporters of free trade and those with antagonistic positions.