Analyze The Effect Of Political Economy On Trade Agreements

Analyze The Effect Of The Political Economy On Trade Agreements And Po

Analyze the effect of the political economy on trade agreements and policy. Analyze the various countries to which the United States actively trades or has an embargo upon. How does this fluctuate with the political economy? Use contemporary examples or examples from history to illustrate your point. Your response should be at least 500 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.

Paper For Above instruction

The intersection of political economy and international trade policy is a complex and dynamic aspect of global economic relations. The political economy, which encompasses the interaction between political forces and economic systems, profoundly influences the formation, implementation, and evolution of trade agreements and policies. This influence manifests through various mechanisms, including national interests, power dynamics, diplomatic relations, and domestic political considerations. In examining how the political economy affects trade relations, it is essential to analyze specific case studies, such as the United States’ trade agreements and embargoes toward different countries, and understand how these are shaped by broader political and economic factors.

The political economy's influence on trade agreements is evident through the way governments leverage trade policies to serve strategic interests. For instance, during the Cold War, the United States sought to contain Soviet influence by forming alliances and trade agreements that aligned with its geopolitical interests. An example is NATO and various trade treaties that aimed to boost economic stability among Western nations while isolating the Soviet bloc. These agreements were often driven not solely by economic considerations but also by political alliances, national security concerns, and ideological commitments (Feenstra & Taylor, 2014).

Contemporary examples further illustrate how domestic political economy considerations influence trade policies. The U.S.-China trade relationship exemplifies this dynamic, where economic interdependence is intertwined with political rivalry. The Trump administration's imposition of tariffs and the subsequent trade war reflected concerns over intellectual property rights, economic security, and strategic dominance. These measures aligned with domestic political narratives emphasizing protecting American manufacturing and technological leadership (Bown, 2020). Conversely, bipartisan support for engaging with China on trade highlights the recognition of mutual economic benefits despite political tensions, demonstrating the nuanced role politics plays in shaping trade policies.

Moreover, the U.S. has actively engaged in trade agreements with various countries such as Canada, Mexico, and members of the Trans-Pacific Partnership (TPP). These agreements are often influenced by economic interests, such as securing markets for U.S. exports, protecting intellectual property, and ensuring supply chain stability. However, political considerations often influence negotiations and outcomes. For example, the renegotiation of NAFTA into the USMCA was driven by U.S. political objectives to increase American manufacturing, trade deficits, and to renegotiate terms deemed unfavorable (Hufbauer & Schott, 2019).

In stark contrast, U.S. embargoes, such as those imposed on Cuba, Iran, and North Korea, reveal the use of economic sanctions as strategic tools rooted in political objectives. These embargoes often stem from security concerns, human rights issues, or efforts to contain perceived threats (Plyer, 2020). The embargo on Cuba, for example, dates back to the Cold War era and reflects political hostility stemming from ideological differences and security concerns. While some argue that sanctions can pressure regimes into change, others contend that they often reinforce political hostility and economic hardship for civilian populations, illustrating the complex relationship between political motives and economic outcomes.

Historically, trade policies influenced by political economy have had profound effects. During the Great Depression, protectionist policies, such as the Smoot-Hawley Tariff Act of 1930, were motivated by political motives to shield domestic industries but inadvertently deepened the global economic downturn. This exemplifies how domestic political pressures can lead to economic policies with widespread international repercussions (Irwin, 2017).

In conclusion, the political economy significantly shapes trade agreements and policies, reflecting a blend of strategic interests, domestic political agendas, and international power dynamics. Whether through trade agreements aimed at economic integration or embargoes used as strategic tools, the influence of political considerations is evident across historical and contemporary contexts. Understanding this interplay is essential for comprehending global trade relationships and predicting future policy developments.

References

• Bown, C. P. (2020). US-China Trade War Tariffs: An Up-to-Date Chart. Peterson Institute for International Economics.
• Feenstra, R. C., & Taylor, A. M. (2014). International Economics. Worth Publishers.
• Hufbauer, G. C., & Schott, J. J. (2019). NAFTA: An Assessment. Peterson Institute for International Economics.
• Irwin, D. A. (2017). Closer Commerce: The Economics and Politics of U.S. Trade Policy. Harvard University Press.
• Plyer, L. (2020). Economic Sanctions and U.S. Foreign Policy. Congressional Research Service.