There are 2 questions :
1. give your opinion on three (3) outcomes that you believe the US recession has had on developing countries and their ability to trade. Provide specific examples of the recession’s effects to support your rationale.
Suggest two (2) approaches that national and international leaders could use in order to develop fair and effective trade policies that would benefit both developing and developed nations. Provide a rationale for your response.
2. suggest whether or not you believe the effects of the evolving global recessions are temporary or permanent. Provide two (2) specific examples of current economic events to support your rationale.
Propose two (2) methods you believe would reduce the impact of global recessions on the U.S. economy. Justify your response
· The Globalization of Trade and Finance
Globalization has many different characteristics. First, it refers to the way the cost and time it takes to move almost anything around the world are decreasing. Second, it refers to the growing importance of international trade to local and domestic economies. Finally, it refers to the way the world is increasingly defined by a single market rather than by many separate markets.
Today, private international financial transactions dwarf the financial resources controlled by states. States have less influence over their own economies, and firms can move more easily around the world. Comparative advantage is based on other factors, including technology, education, and network effects. States have lost control over globalization.
This wee we will focus specifically on the globalization of trade. Prior to World War I, there was no agreed on international framework to facilitate international trade, but there was still a significant amount of international trade that was largely carried out through bilateral agreements. World War I destroyed those trading relationships, and, after World War I, the Great Depression continued to hurt trade, as states enacted protectionist measures. After World War II, there was agreement on the purpose of improving trade cooperation, and the United States pushed this effort forward with the Bretton Woods system.
The Bretton Woods system was made up of trade and financial provisions with a goal to promote free trade and increase wealth around the world. It included the General Agreement on Tariffs and Trade (GATT), which eventually became the World Trade Organization (WTO).
· GATT’s main mechanism was the principle of nondiscrimination. It meant that a state’s tariff on a specific good would be the same for all GATT members, and one state could not simply choose to give another state a better deal. GATT’s main achievement was to put all foreign producers on equal footing.
GATT had several problems. It only covered certain classes of products, and it left agriculture out of the agreement. In 1994, the WTO took the place of GATT. The main provisions of GATT were incorporated into the WTO. One of the main changes in the WTO was the incorporation of an enforcement mechanism that allows states to challenge each other’s laws. Under the WTO, trade has continued to grow, and states have eagerly sought membership in the WTO.
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