What sort of measures might an Obama administration take to protect the US economy from foreign trade? Do you consider that he would be right to limit free trade in the interests of American workers?

Free Trade Agreement has it pros and cons like any trade union. NAFTA is already protected union, taxes, tariffs, quotas, are limiting its activity in most of trading sectors. Measures, which can be taken by Obama administration in way to protect middle class: for example tax relieves. Most of U.S population blames NAFTA for the decrease in job opportunities; the job outsourcing is their main argument. We might assume that employment problems are not due to free trade union but to U.S. decline in competitiveness, huge potential from Chinese market is starting to overwhelmed American market. More and more people are graduating universities, specialising in engineering and science. In 2004 China’s exports were equal to $180 billion comparing to $ 149 billion of U.S exports. Most of technology goods companies are used to invest in China market, because of Endowment Theory and because of over all gain in final balance shit. We can also see difference in U.S. education investment, most of working class people are either specialised in one career that usually are simple factory skills and those who are short-minded and are not willing to make a change. Obama is particularly concerned about this group of people, because they are also his potential voters. Both McCain and Obama are fighting for almost each of voter because their chances are pretty the same, each of them announcing his campaign in any state has to make small changes in how to approach their audience. Their campaign plans have to be flexible and changeable according to how they are taking too. Free Trade Agreement aims to help U.S economy, increasing new, broader trade opportunities. Open trade increases benefits (NAFTA from $2797 billion to $810 billion). We can see real example of job increase in Europe after United Europe creation. It increased by 600,000 jobs from 1994 – 1998. The idea of free trade is there should be no limits; every future limitation brought by Obama will slow America’s economic growth. Main thing, which Mr. Obama should take under consideration, is the result of closing borders, this will not only cause a layoffs but also the same response from other countries. U.S. wants to trade with every one but only when they are benefiting and setting rules which in today’s world is impossible. In case of Mexico most of America’s citizens see it as coming Mexicans immigrants and “steeling” their jobs but they don’t see how much U.S. is gaining from exporting their products to Mexico worth over $200 billion.
http://www.youtube.com/watch?v=vyq4gzvAeRc

The EU is the biggest free trade block in the world. Its economic success is unquestionable with countries queuing to become members. In response the

The EU is the biggest free trade block in the world. Its economic success is unquestionable with countries queuing to become members. In response the USA promoted a free trade zone – NAFTA. It does not appear to have had the same success. Using the trade theories studied in class, can you explain why the success of the EU and the difficulties of NAFTA?

 

NAFTA is a free trade agreement between United States, Canada and Mexico. NAFTA consist of North America agreement on Environmental Cooperation and North America on Labour Cooperation. First of them obligates it parties to enforce environmental laws. It aims to reduce air pollution and other environmental threats. Labour Cooperation agreement was set up to fight labour problems with all three countries. Trade theory, which in this case NAFTA, is using the prescriptive theory. It means that free trade was set up and interfered by government. General idea of NAFTA was to raise the access to foreign market and to give the opportunity to export and import globally. The union without trade barriers is more prosperous, as the example of European Union followed by US, Canada and Mexico to allay and become more powerful and provide each of member countries opportunities of growth and wealther. Difficulties of implementing NAFTA are mostly assigned to fear after 09.11.01 when most of the people lost their trust and become more precocious. NAFTA introduction like almost any change has to sacrifice some things in order to gain in a long run. In all of the three countries there are minorities of workers who are against the union, usually we wouldn’t care but those people are also voters and over last decade constituents and especially working class had a great impact on Democratic Party in USA. By being scared that those people wouldn’t vote for a party candidate in the next elections, they decided not to go in a favor of the agreement. Another factor, which had a negative impact on NAFTA agreement, was the fact that first time in the history three huge nations with such a radical differences (not only in development but also in culture and behavior) wanted to merge. The rules of NAFTA agreement were very strict especially for Mexico, which has to achieve all the requirements and make a change in domestic laws. In the case of European Union most of the countries are based on the same rules and are similar in most of the terms. Plus there are much more concentrated and connected. One of the examples to show how differently US people think comparing to Mexican people is that most of them are assured that by this union only Mexicans are going to gain in so called “opening of borders”. This would bring huge amount of people to US seeking for better job opportunities.

 My point is that not only Mexicans are going to gain a trade without barriers but also USA, which is already gaining over $200billion from exports to Mexico is going to benefit from it. Most of ordinary USA people are not aware of this. This is also main difficulty toward union, most of USA seems not to get the idea that this agreement is more of the investment and the nature of investments is that it brings profit in time. The theory we can apply to European Union is Country Similarity Theory – if countries are there, there is a better chance to trade and to become prosperous. In the terms of NAFTA, USA, Mexico and Canada can make use of Factor Endowment theory, which in this case can combine it. In example Mexico can give a labour force and USA and Canada can contribute Capital Technical complexities. By this alliance NAFTA can produce products at low prices and export them globally by gaining higher profits than by working alone.

 

http://www.youtube.com/watch?v=vyq4gzvAeRc&NR=1

Consider this information and try and evaluate if globalisation is benefiting the whole world. Which areas are benefiting the most/least?

Consider this information and try and evaluate if globalisation is benefiting the whole world. Which areas are benefiting the most/least?


Globalisation is a long process, which started in the beginning of industrial revolution in 1760, which evolved into Capitalism and than extended to globalisation after 1989. This concept can be described as interdependence between countries. Trade, transport, cultural change increased and developed massively in last years. Countries that had made a huge progress during globalisation are followed by significant consequences such as economical, political, ecological, and cultural factors. Technological progress put all trade markets into different level, by connecting distance communities and making their economical activities easier. The players and in the same way those who benefits the most in this system are rich, multinational companies, corporations, governments of developing and developed countries. Any one who wasn’t scared of the risk and decided to go nationally (globally) in this time became very profitable. Creation of international trade and business, new labour markets, development, human rights, security, health system, education, infrastructure, multicultural societies, awareness of what is going on in other countries, ecological awareness are the positive results of globalisation. Although globalisation is generating more wealth in developing countries the effort putted into reducing the gap between them and world’s poorest countries is not meaningful. Usually globalisation works in interest of rich communities especially North and West areas where they dominate the trade. In case of supporting MEDC’s economy most of the poorest countries are used in providing them with raw materials and cheap labour. For example big investments in less developed countries are not contributing as much as they should to development of those communities. The lack of restrictions in poor countries gives them competitive advantage, for example: setting up plants that don’t have to take under consideration polluting environment, safety policies, or decreasing standards to minimum wages of local workers. Some of anti-globalisation campaigners are even talking about threat to culture’s traditions and distinction of local languages and national diversity. The huge inequality is seen between western countries, i.e. Africa where world leaders under United Nations Millennium Development Goals program try to fight extreme poverty and ensure economical stability. They are aiming to achieve that by 2015 especially targeting to combat HIV/AIDS, malaria and other diseases. Promote gender equality and give power to women as a full participating citizens who contributes workforce to their countries. By this move social progress is going to be achieved by women having less children, being more educated and in the same way spend their incomes in different way than men (health, nutrition in their families, education). This action was seen in so called North and West countries when women fought for their independence. This brought huge improvement in different areas of the economy. By ensuring health policies Millennium Development program not only wants to improve general health but also wants to focus on maternal health and child mortality. One of the main goals is to introduce universal primary education. This is the factor that is going to affect all younger population, educating them with all the necessary knowledge to provide them with opportunities for future. Millennium Goals seems to be perfect and most of people believe in their achieving, but globalisation is the system where there are people who gain a lot and people who can gain just little. This tells us that without those who benefit the least there won’t be those who are winning the fortune. Those are rules which are very hard to play and are unfair but, even the huge gap between the richest and the poorest we should remember about the world middle class which was spotted around 1990’s. After big success of the multinational corporations many people found well paid job or even opened their small businesses that started to live on their own in prosperity.