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Introduction

The United States and the Global Economy

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TALK ABOUT DAVOS. EU TRADE AND NATO

The world is a global village. This truism has been ever
more evident in recent decades with the phenomenon known as globalization – the
growing interconnectedness of the various economies, cultures and ideas around
the world. The advancement in science and technology, particularly in less
developed countries have greatly benefited from elements prominent in this
global era: migration, the transfer of capital and investments, trading and transaction,
and the dissemination of knowledge. While arguments could made to support the
positive impacts of globalization, there has equally been dark sides to it. The
2008 financial crisis has been viewed as a downside of globalization rearing
its ugly head. Other demerits include threats to the environmental like global
warming and air pollution and threats to global security by way of
international terrorism. In light of this, countries formulate policies that
minimize the costs and maximize the benefits of this growing phenomenon, with
the United States, moving strong in this direction.

Globalization and America First

“America First” was a slogan that featured quite prominently
in the 2016 presidential campaign trail. Popularized by the President Trump,
the slogan which guides America’s foreign policy, is aimed at channeling
resources into furthering America’s interest, locally and at the world stage.
Following from this, the Trump administration pushed an agenda that emphasized
getting the most out of trade agreements for American citizens. Woven around
the policy is a narrative that stresses the need to soft-pedal financially on
matters at the international scene that the administration perceives, do not
directly affect Americans. In line with the America First agenda, the Trump
administration sought for a renegotiation of the North American free Trade
Agreement (NAFTA).

 

 

Top on the list was a lowering of the United States’ trade
deficit.  The Trump administration equally
sought for the removal of provisions that gave Canada and Mexico trade rights
to appeal duties imposed by the United States and restricted the ability of the
US to impose import limitations on Canada and Mexico.

Wesley (2017) sheds more light on the America’s wariness to
forge global partnerships. One of the major reasons for the longevity of
diplomatic ties between the US and its allies is that their benefits have been
seen to immensely dwarf their costs. For much of their history, US alliances
have not exactly cost much, both America and its allies. While it has become routine
for American defense policymakers to be critical of their allies’ inadequate spending
on defense, there is not a lot to show that America’s alliance commitments
contributed to higher US defense spending than would otherwise have been the
case while for most part of their tenure. Most US basing commitments in Asia
and Europe have been financially supported by its smaller allies. The United
States is to a large extent guided by the maxim, “there is no free lunch in
International Relations”. President Trump made this clear in the 2016
presidential campaign when he committed to requiring US allies in Europe and
Asia to pay more of their security or risk comprising America’s deep ties with
her allies in those places.

 

 

The exit from the Trans Pacific Partnership (TPP) was another
eventuality that dealt a heavy to globalization. Twelve countries including the
US situated around the border of the Pacific Ocean signed up to the TPP in
February 2016, representing roughly 40% of the world’s economic output. The
pact aimed to strengthen economic ties between these nations, lowering tariffs
and fostering trade to boost growth. President Obama spent a great deal of his
presidency working towards the actualization a deal. Members had equally hoped
to forge closer ties on economic policies and regulation. All that changed when
Donald Trump assumed office as President. President Donald Trump made
abandoning the Trans-Pacific Partnership (TPP) trade deal a key part of his
election campaign and on his first day in office, he fulfilled that bit of the campaign.
The agreement was structured so that it could eventually create a new single
market, something similar to that of the European Union. US involvement was an
essential fulcrum for the deal. It may be possible for the other countries to
forge a smaller scale pact in its place, but it can’t go ahead in its current
form. Trump has repeatedly said that the deal was a horrible deal, following
from the comments of critics of the TPP who say that the deal would cost US
jobs and provide a platform for companies to sue governments that change policy
on health and education to favor state-sponsored programs. And it was also seen
as escalating competition between countries’ labor forces. America’s economic
prosperity is required before the agreement can be ratified and set in motion.
As Japan’s Prime Minister put it, “a TPP without the US – and its market of 250
million consumers – would be “meaningless”.”

From the foregoing, it is abundantly clear, that the US
wields some kind of hegemonic influence on the global political economy.
Haggart (2017) examines key factors that grants a nation some leverage to act
autonomously in the international system. Using the Strangean framework he points the interaction of four key sources
of structural power, each responding to a fundamental human need. They include:
security, production, finance, and knowledge. In his work, he ranks security
and finance as two very prominent factors that has placed the US at the helm of
affairs in a unipolar world. In 2017, America contributed 22.1% to NATO budget.
The highest contribution of any nation. The US also ranks number one in terms
of Share of Nominal GDP. These confer on it, a status that makes it almost an
invaluable country in the international system.

The United States again took a back seat in the world of
globalization when President Trump announced in June 2017, his intention to
withdraw the United States from the Paris Agreement. The agreement, reached within
the United Nations Framework Convention on Climate Change (UNFCCC), is concerned
with recognizing the need for an effective and progressive response to the urgent
threat of climate change on the basis of the best available scientific knowledge.
It also concerns itself with recognizing the specific needs and special
circumstances of developing countries, party to the agreement, especially those
that are particularly vulnerable to the adverse effects of climate change, as
provided for in the Convention, taking full account of the specific needs and
special situations of the least developed countries with regard to funding and
transfer of technology. The agreement equally acknowledges the fundamental
priority of safeguarding food security and ending hunger, and the particular
vulnerabilities of food production systems to the adverse impacts of climate
change.

The largest human influence on climate change is the
emission of greenhouse gases carbon dioxide, methane and nitrous oxide. The US
is the world’s largest emitter of greenhouse gases, second only to China.
Notwithstanding, the Trump administration has chosen to steer clear of
committing financial resources to actualize the goals of the Convention. The
President chose to do so in a bit to further America’s interest in abroad,
saying he was “elected to represent the people of Pittsburgh not Paris”.

A personal take (EDIT)

Supporters say he has delivered: a military defeat of the
Islamic State, greater spending by U.S. allies on defense and a commitment to
transform or abandon international agreements such as NAFTA, the Iran nuclear
deal and the Paris climate accord. But the “America first” approach
has also left the United States far more isolated. The overall impact of the
policy, say diplomats, politicians and analysts interviewed around the world,
has been a clear retrenchment of U.S. power — and an opportunity for U.S.
adversaries such as China and Russia.

In his recent speech at Davos, the administration attempted
to allay concerns about its agenda. And Gary Cohn, the head of Trump’s National
Economic Council, put it this way: “America first is not America alone.” However,
America might indeed be alone in the international system. While she greatly
recognized as a global power, the Trump administration has forced nations to
conceive ways of operating in the global market without reckoning America’s
economic clout at the world stage. A case in point, is America’s decline to
grant nearly $2 billion in military aid to Pakistan, while China stepped in to
offer support. Among their actions, the Chinese have committed in recent years
to a $62 billion infrastructure plan in the region. Pakistan has taken pains to
differentiate between the two powers.

Based on the aforementioned facts, I strongly support American
economy enmeshed in globalization. My parents stand with me on this. However,
it may be that we are from a developing and look for more support from the
developed nations like the United States

 

Conclusion

Over the years, countries across the globe have increasingly
relied on one another in virtually in every aspect of their economies. The unipolar
system

 

 

References

September 20, 2017. President Donald J. Trump at the United
Nations General Assembly: Outlining an America First Foreign Policy. https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-united-nations-general-assembly-outlining-america-first-foreign-policy/

January 23, 2017. TPP: What is it and why does it matter? http://www.bbc.com/news/business-32498715

December 12, 2015. Adoption of the Paris Agreement http://unfccc.int/files/essential_background/convention/application/pdf/english_paris_agreement.pdf

 

MICHAEL WESLEY. ANU Press. (2017). Comparing US Alliances in
the 21st Century. Stable URL: http://www.jstor.org/stable/j.ctt1sq5twz.4

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