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International Trade as a Significant Issue in International Political Economy Term Paper


Introduction

There are a number of economic issues which have to be evaluated by different scientists and philosophers in order to identify how it is possible to improve living conditions as well as introduce the most effective steps in the chosen field.

The idea of international relations is widely spread nowadays and provides the representatives of various countries with the possibilities to define their skills and promote services through the whole world. International trade is one of the main components under which international relations may be based. There are many writers who share their knowledge and ideas about the development of international relations, and each author achieves good results in the chosen activities.

In this paper, two different books will be analyzed in order to define weak and strong sides of international politics of trade and comprehend what may influence the trade process in different countries. The Politics of International Economic Relations is the book by Joan E. Spero and Jeffrey A. Hart about the peculiarities of the politics in current world economy.

With the help of this book, it is possible to understand how globalization promotes international relations and how developing nations may achieve the desirable success. Another book chosen for evaluation is written by Syed J. Maswood. International Political Economy and Globalization is the source of information about different trade issues and financial stability that is crucially important for different nations.

International trade is the way of how nations have to exchange different services, goods, and products. In order to select the right and, what is more important, effective way, it is necessary to have appropriate theoretical background and access to current changes and existed demands.

International trade is a complex issue in political economy that requires certain attention and evaluation: there are many historical events which influence the development of this industry like World War II and Great Depression, however, the appropriate promotion of the WTO and the GATT has a number of positive aspects which are properly discussed by Maswood, Spero, and Hart.

International Political Economy as a Discipline to Analyze the Relations between Countries

International political economy, also known as IPE, appeared not long time ago. During the 1970s, there was a need of investigations among the existed economic foundations in order to comprehend the reasons of world oil crisis in 1973 and breakdown of one of the most popular monetary order known as the Bretton Woods system according to which monetary relations with different nations could be developed.

However, the Bretton Woods system was not perfect and could not cope with a number of problems which challenged the vast majority of European countries (Spero and Hart 15), this is why businessmen as well as philosophers and researchers found it very important to promote the discipline the purpose of which would be the evaluation of current economic conditions and identification of political, legal, and even philosophical factors.

The relations between countries may be properly developed only in case all members are aware of special standards and ready to meet the demands and perform the functions set. Maswood calls international trade as the “source of dynamism and development” (21) that is characterized by a number of benefits and alternatives. The presence of alternatives makes this exchange of goods dependent on various outside factors like globalization, political conditions, and legal implementations.

In case one country undergoes some challenges and problems in the above-mentioned spheres, international trade could not be supported any more until appropriate solutions are found. And the discipline called international political economy aims at studying international relations taking into consideration such aspects of political economy like buying and selling in terms of law, government, custom, and so on.

Maswood’s achievements as well as Spero and Hart cooperation contributes considerably the field of international economic relations

One of the most successful attempts to evaluate international economic relations is made by Spero and Hart. Within a short period of time, international political economy has become a prominent field within the frames of which problems connected to a dollar or other currencies and challenges with international trade are discussed.

Economic growth based on technological innovations promotes fast development of international trade. Trade policy is the question evaluated by domestic politics constantly, this is why it usually “determined prosperity or adversity” and considered to be the “subject of frequent and often highly charged domestic political conflict” (Spero and Hart 72).

To find the most effective way to solve the conflicts, professionals offer a number of rules and regulations which have to be imposed on international traded and decrease the level of controversies appeared day by day. The process of international trade lies into the fact that goods are transported across several boundaries and have to be bartered. One of the most successful examples of international trade line is the Silk Road that is supported by the European and Asian representatives.

Information offered in the other source by Maswood helps to comprehend how international trade has been developed through times and which improvements have been implemented. In fact, international trade has been regulated by bilateral treaties between the nations which were going to exchange the goods or services.

Due to some uncertainties or inabilities inherent to mercantilists, the vast majority of nations restricted the development of international trade or set too high tariffs. “Mercantilists viewed international trade as a zero-sum activity and, consequently, emphasized the importance of trade controls to benefit the national economy” (Maswood 21).

Fortunately, at the beginning of the 19th century, the representatives of British government made a decision to support the idea of international trade and, as a result, the agricultural Britain turned out to be the industrial country with a variety of opportunities. This growth in the sphere of manufacturing promoted many new possibilities which lead to the fact that “consumption of manufactured goods had high income elasticity” (Maswood 23).

In other words, the ideas offered by the authors under consideration have a number of common ideas as well as differences which supplement each other: if Spero and Hart focus on past achievements and factors which predetermine the current situation in international trade, Maswood, in his turn, evaluates the achievements of modern political economy in different countries.

The key country of Spero and Hart is the United States of America with their rich history and achievements, and Maswood writes more about Great Britain and its primary steps on the field of international trade.

Current Changes on Political Arena That Influence International Relations and International Trade

Political, economic, and social factors define the way of how different countries may promote the idea of international trade as a significant part of business.

Still, there were many historical events which deprived tradesmen of the opportunities to develop relations and create appropriate conditions for their activities. The World War II provided the United States of America with a chance to ask its allies commitments for freeing of international trade that served as a basis for “a postwar international commercial order” (Spero and Hart 73).

This is why nowadays, the Unites States of America is the country with properly developed trade system and clearly defined partners. This sphere of business helps to meet the needs of citizens as well as share services and goods with other countries. The USA took a significant leadership role with such countries like Japan, France, Russia, and some more European countries.

In spite of the fact that nowadays European countries and Japan demonstrated successful achievements in international trade and the results of American trade system decrease considerably, Americans still perform the functions of the leaders and do not find it necessary to lose their positions. Due to the US firms which dominate in the computing industry (Spero and Hart 111), American tradesmen are able to evaluate various spheres of life and define the demands of citizens in regard to their interests.

Maswood’s book helps to identify the most crucial steps in the development of international trade and attempts of different countries to dictate their own conditions and rules.

Various improvements have been observed in the first half of the 20th century: Italy increased tariffs for the representatives from France and the United States of America in the middle of 1930; Canada wanted to take as much as possible from its American neighbours in 1930; and Australia did not differentiate countries but increased general tariffs at the beginning of the 1930 (Maswood 26).

The results of such changes made some countries reject some partnerships, and some countries got a chance to earn a lot. In 2005, it was stated that the value of world merchandise trade was about $1,2 trillion. These achievements are rather promising, this is why the vast majority of restrictions in the past are justified by the author.

World Trade Organization as an Attempt to Liberalize International Trade

For each country, it was crucially important to establish the rules and standards which could be optimal for all members of international trade, still, numerous attempts were not as successful as they expected to be. Maswood defines a World Trade Organization as “an important step toward minimizing the de-liberalization of international trade” (43).

The ideas offered by Spero and Hart are similar to those offered by Maswood, still, these authors admit that such international organization should help to supervise trade between the participating countries. In fact, the role of World Trade Organization is huge indeed; after it replaced the General Agreement on Tariffs and Trade, also known as the GATT, in 1995, the conditions under which countries had to exchange services and goods improved considerably.

On the one hand, this organization is responsible for negotiations and formulations of trade agreements between different countries taking into consideration the demands and requirements of all sides on new bases.

On the other hand, in both books, it is admitted that the conditions of WTO agreements and work focus on derive from past agreements offered by UR (Uruguay Round) and the GATT. This is why in order to comprehend how the WTO may work and what conditions are considered, it is better to evaluate past achievements in the chosen sphere, evaluate each organization separately, and compare the WTO with them.

Spero and Hart identify three organizations as “cornerstones of international economic governance” (2). They are the World Bank that was created to facilitate the process of recovery after the war, the International Monetary Fund (IMF) that clearly defined the functions of international trade and tradesmen, and the GATT that aimed at establishing the principles for multilateral traffic negotiations.

In comparison to Maswood who define the last organization the most favourable and effective means to promote international trade, Spero and Hart seem to be more passionate with the World Bank and the possibilities offered. Actually, the World Bank supported only developing countries so that they could have leveraged loans and use them for capital programs.

The main purpose of the World Bank was always to reduce the level of poverty and help all countries achieve the same success. However, the existed inequality is one of the key promoters of trade: those who do not have something have to do something in order to earn and reach the desirable goal. And those countries that are rich in some particular production can sale good and services and increase incomes.

In its turn, the International Monetary Fund set the purpose to stabilize international exchange rates and encourage liberalising economic policies by means of enforcement.

So, it may be observed that all trade organizations had the same purpose – to improve the conditions of international trade; still, the methods differed considerably, this is why it was obligatory to implement one system that could meet the needs of both developed and developing counties because of personal desire. In the books under analysis, the authors underline how successful and well-timed the World Trade Organization was at the first day of 1995.

International trade would be incomplete without the conditions offered by the World Trade Organization. The point is that the WTO does not predict possible outcomes of the activities; but what the organization decides to do is to formulate a number of principles in accordance with which trading countries have to work.

One of the most effective principles is the idea of non-discrimination. It means that each country has the right to develop the relations with other countries on the same basics. There is no need to identify one country that deserves special attention and tariffs, and another country due to its low financial position should undergo different trading conditions.

This is why all WTO members have the same rights, possibilities to be improved and developed. The same attitude is observed with the services and goods which are sold. Import production should be treated the same way domestic products are treated: all technical and security standards should be met in accordance with the requirements mentioned in the agreement.

Globalization as a Significant Factor in International Trade

The issue of globalization is considered to be an important aspect to take care of. For example, it is stated that globalization is the main reason of why more markets for goods and services have to be open, why multiple distribution should be provided by all businessmen, and why global markets need to be available 24/7 (Spero and Hart 8). Of course, technological progress supports the process of globalization, still, it is not always possible for all people to get used to the new improvements and innovations.

The vast majority of developing countries admit that globalization is the process that creates a number of disadvantages: the examples are numerous labour mobility challenges and investment capital that is repatriated by workers. In spite of the fact that governments try to assist the workers to adapt to a globalizing economy by means of retraining or special education, this support is always enough for the required professional level.

Another aspect of globalization in countries which are not adapted for innovations is constantly increasing losses: people have to pay more money to get an idea on how to overcome globalization and comprehend the demands which are set by time and fashion. This is why to meet the conditions introduced by the WTO and be a worthwhile trading member, it is very important to get an appropriate level of knowledge, find financial support, and evaluate the conditions under which trade may be developed.

Improvements in the Field of International Trade

In the current world, there are many aspects which have to be reformatted and improved considerably, and one of them is international trade. Taking into consideration that there are a number of rules and policies which have to evaluated by all tradesmen, it is very important to formulate them so that each member of international trade is satisfied.

Nowadays, there are many methods of how international trade may be organized, this is why it seems to be not that difficult to decide on the steps which should be chosen. First, controversies around the World Trade Organization should be solved. It is said that the WTO that is based on democratic principles offered by the GATT does not introduce itself as a pure democratic organization that tries to meet the interests of all member countries.

What is more important, the WTO is now recognized as the instigator of the trade that is managed by corporations. Public interest is not taken into account, however, enough attention is paid to large organizations which have money and want to have more. This is why nowadays, the WTO has more opponents as all those workers and consumers who were waiting for some help and support became upset with the conditions they have to work under.

There are many debates on how it is possible to improve the situation and return a true essence of the WTO and its possibilities. The authors of the books under analysis suggest the government to take control over the activities and evaluate the public opinion with the help of which international trade continues developing and improving.

It is necessary to remember that international trade is based on ordinary people who create production, provide services, and perform the role of contributors. This is why it is wrong to neglect their opinions and demands just in order to earn money and take leading positions in some particular sphere.

Conclusion

The two books chosen for the analysis in this paper are considered to be interesting and educative sources. With the help of Maswood’s International Political Economy and Globalization, the reader is able to understand how different countries promote international trade and achieve appropriate results in their activities. Attention to the process of globalization makes the reader comprehend how challenging innovations could be for ordinary people as well as for professional tradesmen.

Spero and Hart introduce another powerful source called The Politics of International Economic Relations that supplements the ideas offered by the previous writer. International relations are complex, and there are many objectives which should be considered to understand a true nature of international trade. This is why it seems to be rather effective to evaluate the past of political economy and international trade in particular and define how it is possible to improve the present and future conditions.

Works Cited

Maswood, Syed, J. International Political Economy and Globalization. Hackensack, NJ: World Scientific, 2008.

Spero, Joan, E. and Hart, Jeffrey, A. The Politics of International Economic Relations. Boston, MA: Cengage Learning, 2009.

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IvyPanda. (2019, January 16). International Trade as a Significant Issue in International Political Economy. Retrieved from https://ivypanda.com/essays/international-trade-as-a-significant-issue-in-international-political-economy/

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"International Trade as a Significant Issue in International Political Economy." IvyPanda, 16 Jan. 2019, ivypanda.com/essays/international-trade-as-a-significant-issue-in-international-political-economy/.

1. IvyPanda. "International Trade as a Significant Issue in International Political Economy." January 16, 2019. https://ivypanda.com/essays/international-trade-as-a-significant-issue-in-international-political-economy/.


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IvyPanda. "International Trade as a Significant Issue in International Political Economy." January 16, 2019. https://ivypanda.com/essays/international-trade-as-a-significant-issue-in-international-political-economy/.

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IvyPanda. 2019. "International Trade as a Significant Issue in International Political Economy." January 16, 2019. https://ivypanda.com/essays/international-trade-as-a-significant-issue-in-international-political-economy/.

References

IvyPanda. (2019) 'International Trade as a Significant Issue in International Political Economy'. 16 January.

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