Worldwide shipping concept: row of cardboard boxes around blue Earth globe isolated on white background
Introduction
It should be noted that in the international system, there are no permanent friends, no permanent enemies but just permanent interest. One of the ways through which countries project and protect its national interest is through the establishment of specific trade policies. These policies are aimed at securing the best out of international trade. Notably, the trade patterns of countries could be favourable to allies and antagonistic to unfriendly countries. The United States is largely regarded as the hall mark of democracy and a world power. However, in recent times, its trade policies have been widely criticized for been predatory. This is no surprise as issues regarding trade liberalization have become topical in the discourse between state and non-state actors. This report aims at presenting a critique of the United States Trade Policy.
Trade
Trade implies a transaction in which a buyer pays a seller for a commodity or service, or in which two parties exchange products and services (Hayes, 2021). International trade is the transfer of capital, goods, and services across international borders or territory. Exporting products and services across national borders is made possible by international trade (Hayes, 2021). It is important to note that the World Trade Organization (WTO) was established in 1995 to replace the General Agreement on Tariffs and Trade (GATT). The WTO is responsible for regulating international trade and resolving disputes ensuing from International Trade.
Trade Policy
The collection of agreements, regulations, and procedures that affect a government’s trading with other countries is known as its trade policy. Each country has its own trading standards, including taxes, subsidies, and regulations (Logue, 2022). The global economy and financial markets are profoundly affected by trade policies. Economic issues such as currency exchange rates, the availability of goods and the price consumers pay for them are all influenced by trade policies (Logue, 2022).
Trade Liberalization
International trade liberalization is the process by which trade restrictions and obstacles between countries are reduced or eliminated (Banton, 2019). Tariff barriers, such as levies and surcharges, and nontariff barriers, such as licensing rules and quotas, are all examples of obstacles to trade liberalization. Easing or removing these barriers is frequently seen by economists as a step toward promoting free trade. As a result of increased foreign competition brought on by trade liberalization, domestic enterprises are motivated to improve efficiency and lower production costs.
The importance of applying theories to global challenges cannot be overemphasized. People utilize theories to generate predictions based on what they have observed (Hollis & Smith, 1990). The exclusion of blockades to commerce and free trade is a core part of the modern interdependency theory which is also called the theory of liberal institutionalism. States can expand the conceptions of self-interest to broaden the scope of collaboration by belonging to international institutions (Keohane & Nye, 1977). Liberal institutionalist seeks to demonstrate that states can cooperate in the absence of a powerful player to implement obedience to treaties.
Methodology
It should be noted that this report is qualitative and employs the use of comprehensive explanations. Data in this report is derived from secondary sources including books, journals, and internet sources.
Critique of the United States Trade Policy
It is critical to recognize that the United States’ trade policy towards developing countries or economies is discriminatory. It imposes increased tariffs on a majority of agricultural and light manufactured products, particularly footwear and clothing. US trade policies are not ideal as a means of assisting underprivileged people and third world countries. It should be noted that, as of 2003, US tariffs on imports from developing countries were up to 20 times higher than those on imports from developed countries (Irish times, 2003, September 2003). Discriminatory tariff systems have the overall effect of lowering demand for items produced by the poor and excluding them from a level of global prosperity. In other words, the global north’s tariffs are designed to stifle developing country exports in sectors where they have a competitive advantage.
In a similar vein, US trade policy has done little to help vulnerable American workers and companies. As a general rule, tariffs in the United States tend to have a greater impact on the poorest members of the population than on the wealthier ones and this in turn reinforces social inequalities and class stratification-widens the gap between the rich and the poor. Also, assistance for workers who might be displaced by imports is shrinking and ineffective. Moreover, the tariff barriers that once shielded companies and workers from one another have long since crumbled. In this light, the burden of the cost of production rests on the consumers and the producers barely have any benefit.
The US trade agreements often take an aggressive front through positional bargaining which often strains the countries relationship with its counterparts in the international community. Poor countries are frequently forced to make sacrifices in order to trade with richer countries. President Trump, for example, imposed iron and steel tariffs on national security grounds, but included longstanding US allies among the penalized exporters (Hillbery, 2022). These countries retaliated by placing taxes on a wide range of US exports, including agricultural and food products. In June 2018, the previous US administration placed a 25% tariff on European steel and a 10% tax on aluminium on national security grounds.
Correspondingly, most US trade policies are not green inclined, or climate based. This is partly because their trade agreements tend to favour multinational corporations over working people. These multinationals. Some of these multinationals have been accused of tax evasion and corrupt practices in their host countries (Igwugwum, 2015; Schwikowski, 2018). These Multinational Corporations have been heavily criticized for contributing to environmental pollution which fundamentally puts people and the environment at risk (Pettinger, 2019).
The United States’ trade policy jeopardizes accessibility to antiretroviral drugs. Despite its pledge to eliminate AIDS, the US government is enacting stricter intellectual property restrictions through trade agreements and bilateral pressure, which will sabotage the battle against AIDS by limiting developing nations’ access to affordable antiretroviral drugs. The US is pressing for increased monopoly protection on new medications, particularly drugs to treat HIV and AIDS, under the influence of the multinational pharmaceutical business, driving up the cost for people living in poverty (Oxfam, 2012).
Many statements have been made in recent years about whether trade liberalization strengthens or weakens human rights, and if trade agreements should do more or less to promote human rights. Trade policy is infamous for being untransparent and undemocratic. Inconsistent human rights outcomes are facilitated by a lack of transparency. In many circumstances, it provides business a bigger role than public interest groups, because governments are more likely to engage business groups and promote their interests over those of civil society. For example, the Pharmaceutical Research and Manufacturers of America (PhRMA) interests are frequently reflected in US bilateral agreements, resulting in the exclusion of many people from affordable medications, which is opposed to the right to health premise of facilitating access to medicines.
The current trade policy diverts the leaders’ attention away from what they should be doing — addressing climate change and promoting peace — and diverts everyone’s attention away from the greater underlying flaws with this global trade regime. Concentrating exclusively on steel quotas (however necessary) and peanut butter tariffs obscures the forest for the trees (Stanton, 2018). While we should be worried about our world leaders’ capacity to constructively come to agreements in the face of a ‘trade war,’ we must also tackle the more significant concerns of this global trade framework and the repercussions trade regulations have on our health and the environment. Also, the current prescriptions do not allow for the development of key critical supporting institutions in the agriculture sector, which is holding back vital productivity gains and preventing the sector from contributing fully to economic growth, poverty reduction, and enhanced food security.
Recommendation
A greater level of transparency in the discussions could assist developing nations reach trade agreements that are more development-friendly and meet the requirements of the most vulnerable elements of their population, all while adhering to human rights norms.
There is need for the United States government to modify its trade policies to be more climate friendly and in line with sustainable development goals. In the same vein, the regulations governing agricultural trade should be more transparent and equitable, with no preferential treatment given to any countries or commodities in particular. agricultural producers who are effective and efficient should have as many opportunities as possible to compete.
Banton, C. (2019). Trade Liberalization Explained. Retrieved March 23, 2022, from Investopedia website: https://www.investopedia.com/terms/t/trade-liberalization.asp
Hillbery, R. (2022) Trade and trade policy outlook, 2022. Retrieved 1st March 2022, from ag.purdue.edu
Igwugwum, C. (201511th February) the impact of multinational corporations (foreign direct investment) on the Nigerian economy. retrieved july25th, 2020, from chrisdonasco.blogspot.com/2015/02/the-impact-of-multinational.html?m=1
Jawara, F & Kwa, A (2003) Behind the scenes at the WTO- The real world of international trade negotiations. London: Zed Books.
Kripke, G. (2019 5th November) how can us trade policy work for working people? RetrievedMarch 1st, 2022, from politicsofpoverty.oxfamamerica.org/us-trade-policy-working-people-dignity/
Logue. A. (2022, January 25). What is Trade Policy? Retrieved March 23 2022, from The Balance website: https://www.thebalance.com/what-is-trade-policy
OXFAM (2012). United States trade policy undermines access to anti-retroviral medicines. Retrieved 27th February 2022, from www.oxfam.org/es/node/9345
Stanton, S. (2018). The big trade war distraction. [online] Greenpeace International. Available at: https://www.greenpeace.org/international/story/16997/the-big-trade-war-distraction/.
An interesting discussion is worth comment. Theres no doubt that that you need to write more on this subject matter, it might not be a taboo matter but usually people dont speak about such subjects. To the next! Many thanks!!
An interesting discussion is worth comment. Theres no doubt that that you need to write more on this subject matter, it might not be a taboo matter but usually people dont speak about such subjects. To the next! Many thanks!!
Thank you so much.
Thank you so very Much.