How USA Does Business With Other Countries Essay Example

Paper Type:  Research paper
Pages:  7
Wordcount:  1806 Words
Date:  2022-10-20

The USA is one of the leading participants in international trade in the world. The international trade in goods and services together with the flow of financial capital greatly affects all people living in the USA as well as some from other countries. Whether one buys imported cars, gasoline, clothes or computers or works in a competing firm within the industry across the world. The same case applies to the export of goods made in the USA to other parts of the world. In fact, regarding exports, the USA is one of the top three exporters in the world alongside Germany and China. At the same time, USA, is one of the top importers in the world, to the extent that the country often records internal trade deficits. This paper discusses how the USA takes part in imports and exports, through its foreign trade policies.

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To start with, U.S.A trade with other nations is mainly based on trade liberalization. Trade liberalization policy has been in existence in USA international trade policy for the last 60 years. This has been achieved through some bilateral agreements and multilateral negotiations, which have led to a decline in tariffs. In recent years, there has been increasing use of nontariff strategies to promote trade liberalization as well as reduction of protection policies. Even though the reduction of tax has been the main push of U.S.A trade policy from late 1920's, there have been significant changes in the extent and nature of the United States participation in liberalization of trade. These changes are a result of three main economic and political factors. These factors are: the rise and following decline of the country as a dominant power; the persistence during the entire time of political dominance of USA industries, where they opposed any effort to reduce import duty of imported products which gave them competition (Adams 57); the attempts by the Congress to limit the more authority given to the president in 1930's at the time of economic depression and later during the period of political emergency in World War II.

As a result of the factors above, some things can be seen in the way the USA has always participated in international trade. First, it is clear that U.S.A trade policy has depicted outstanding stability since the Second World War. During this time, the country has not been purely free-trade-focused, while at the same time, it has not moved towards isolationism. Instead, the country has promoted what is termed as "open but fair" policy with the negative effects such has lack of market for USA industries through imports considered fair (Parris 77). U.S.A imports relief policy is of great significance to Asian nations compared to other U.S policies because there exports to USA has greatly promoted their economic prosperity (Taylor 66). This import relief policy has also shown significant consistency. However, different strategies for delivering it have been used at different times. These strategies include, unfair trade remedies, escape clause, orderly marketing agreements, and adjustment assistance. For unfair trade and escape clause strategies, different combinations of tariff and nontariff measures have been used on different occasions. The choice of tariff and nontariff measures is significant since it has an impact on the predictability and complexity of U.S trade policy, and for the reason that it regulates the division of revenue between the country and its exports suppliers.

The effectiveness of U.S.A foreign trade regulations over time is notable despite the recurrent change of power by different political parties, in the Congress and mostly in the executive branch. It is, therefore, clear that party affiliation does not affect U.S.A foreign trade policies. However, the way the U.S.A participates in international trade is determined by the measures put forward by the Congress and the executive. These two organs of government have a varying perspectives on international trade because of the eminent difference in their constituencies. On matters of international trade, the relationship between the two branches of government has often been characterized conflicts based on political party affiliation. (Takagi and Reichmann 45).

Despite the decline in U.S hegemony, its leadership in trade policy remains potentially strong. The country is resilient in moving towards protectionism. Any attempt by the country to introduce aggressive insularity calls for the parallel aggression of trade policy among its trading partners. The country is equally strong in promoting liberalization trade policy. The country seems preferably calm in aggressive trade policy peacemaking, both bilaterally and multilaterally; with its traditional industrial partners and even with Asian countries and Japan.

The U.S trade policy has experienced unprecedented freedom since the Second World War and is also subject to unique limitations. These policies have greatly served the external and internal security goals without having any severe repercussion to the home market. Those objectives persist, with the widespread hopes that the U.S.A should design effective trade policy that will balance the external and internal goals of international trade. These expectations have, in recent years, experienced new challenges caused by known domestic political pressure.

Regarding U.S.A participation in international trade, the government uses policies that aim at serving two masters, a foreign and a domestic constituency. In recent years, though, U.S.A leadership in the trade have become quite challenging because of the increased strength of the domestic constituency. These new demands are considered as the "domestication" of U.S.A foreign trading policies. This domestication policy put the president in dilemma, yet the president's strategies aims at benefitting both masters. Congress, on the other hand, continue to fight for the U.S.A commercial interest against any non-financial foreign-policy objectives (Anjaria 45).

Even though there is great demand for protection trade policy from the domestic constituencies, the government is not in a position to openly champion for import protection policy due to the many multilateral and bilateral agreements made between the U.S.A and other nations. In the eyes of other major industrial countries, U.S.A is still seen as the controller of the international liberal trading order. These nations are in favor of the U.S.A anti-protection policy and feel that any effort by the U.S.A to approve global protectionism, will encourage other trading partners to do the same. If protectionism is adopted across the world, there would be a massive loss of jobs in export business and extensive financial losses among industries with foreign and export interest (Adams 8). Due to the great economic and political power of these sectors, in combination with external constituencies' pressures, the government would not make a political risk in publicly pursuing protectionism policies. At the same time, though, the government leadership must protect certain industries whose overall impact on the political fate of those in power.

A relatively new U.S.A trade policy of aggressive peacemaking still needs acceptance from abroad and at home. Foreign and domestic constituents of the United States trade regulations are similar in the way they are divided over the most effective way of conducting global trade (Kiesling 40). As a result, the U.S.A government has embarked on an effort to make multilateral and bilateral agreements to protect its industries against harmful business practice from its trading partners.

To achieve conducive international business environment, the government has introduced several trade policies through bilateral treaties that put USA in a strategic position for competing for international markets. With the lack of well-developed international treaties pertaining acceptable conduct, and coming up with a mechanism for effectively settling conflicts that may arise as a result doing business, there is a risk of unfair trading practice among the trading partners (Taylor 26). When each nation effortlessly champions for aggressive peacemaking policies, and strike back against others who have similar policies, it is therefore, possible that all countries will eventually have lower income levels and employment than expected, since the order of events might lead to a negative-sum game.

The government leadership is trying to inform the public of these potential costs of adopting an aggressive peace trade approach to both the international partners and the American public. The government trade policy is, therefore, guided by the current fact and its past history. The U.S has remained true to using trade facts due to its comparative advantage in economic research and education and has remained strong in its tradition of objectivity and independence among its commentators and analyst (Lloyd 70).

For many years, the United States has embarked on international approach, which has proved to work quite well. However, the most important shift in economic power among nations, including the rise of recently third world countries experiencing industrialization, characterized by difference between countries to the point considered either active and reactive trade regulations, which have assisted in reducing the impacts of the regulations under which the postwar trading administrations used. What the government is currently targeting through aggressive peacemaking is to develop a new cooperative approach (Rickford 60).

The new cooperative approach has called for multilateral and bilateral agreements by the government on many important aspects of trade regulations. One of the most important of these agreements relates the interventions by the government, is subsidization, which is not counteracted through offsetting moves by other governments. The current GATT practices and rules are not adequately precise on subsidization policies (Kelly, et al. 60). The government has been coming up with new national laws to address modern conditions affecting the international trade. In a partner, the government has come up with sufficient recognition of the trade regulation proposed by different trade activists in the international trade. However, these regulations are not by any means aiming at gaining by the U.S in international trade to the disadvantage of others. Some may lead to benefits to all trading partners.

The U.S has been at the forefront in making agreements with the industrialized and newly industrializing nations pertaining momentary assistance to areas experiencing serious adjustment problem. Sometimes, though, nations using their aids strictly for adjustment reasons discover that their adjustment challenges are made even worse by counter duties that others have imposed. The government has also embarked on developing new safeguards code such as anti-dumping. The government is also integrating these fresh safeguard codes with special treatment, for developing nations. This strategy has played an important role, in maintaining the good import-export relationships with developing countries.


The government has also made several multilateral and bilateral agreements to address possible issues concerning competition policies. This is because the international market is imperfect, and therefore, characterized by abnormal profits. These high profits are often the target of government trade policies. With the international understanding developed through business agreements, there are great discouragements of abuse of dominant market position, cartel-like behavior, and efforts to monopolize (Anjaria 45). Through, such bilateral agreements more fin...

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