The Impact of Incoming US Administration on Global Trade Relations: The Rise of Protectionism or Fairer Trade?

The Impact of Incoming US Administration on Global Trade Relations: The Rise of Protectionism or Fairer Trade?

Copyright: © 2018 |Pages: 21
DOI: 10.4018/978-1-5225-4131-8.ch002

Abstract

Why did it take decades and an “unconventional” President to realize that the United States had significantly lost out to a “trading partner”? For 2017, United States trade deficit with China was estimated as being over $300 billion. What can be said for now – and what is certain for sure, is that trade gains made by the United States' formidable trading partner, China, were evident – but that millions of Americans either failed to acknowledge its potential or the possibility that it could eventually – and even soon, replace the world's economic leader. It is also possibly the case that it is much clearer for the general populace that are worst hit by the “unbeneficial” trade deals, to see through the picture – and realize what is happening, than those wealthier classes living in “La La land”.
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Introduction

During the final and third US Presidential debate, held on the 19th October 2016, key points which featured as parts of the highlights of the debates include the following:

  • The current national debt levels;

  • Social and health benefits; and

  • Immigration.

The debate kicked off with the vital topic dealing with the selection of Supreme Court Justices whereby the President would be involved in nominating the Justices and the Senate would consent to the choice of nomination. Whilst the dominating issues here revolved around the right to bear arms,1 as well as abortion, the more challenging issue for the incoming Presidential and administration – and particularly in the event that a democratic candidate is elected as the next US President, would be to address the current political gridlock in Congress – an issue which has so persistently plagued the current administration and prevented the passing of key legislation in Congress.

The political gridlock as currently experienced in Congress – where a Republican majority presently exists, and whose resistance has generated much challenges and little progress for the present administration, constitutes a more challenging issue in need of attention – as well as crucial to addressing the nation’s challenges. If legislation such as those embracing NAFTA renegotiations are to be secured, a cooperative majority in Congress – who will work with the President, will be required.

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Background To The Challenges On Protectionism: A Shift In Political And Trade Approaches?

Preserving Peaceful and Amicable Relations Between Nations: The Trans-Pacific Partnership

As well as including a Preamble, whose objectives include amongst others, the:

  • Strengthening of bonds of friendship and cooperation between them and their peoples;

  • The promotion of transparency, good governance and the rule of law, the elimination of bribery and corruption in trade and investment.

The Trans-Pacific Partnership, an Agreement which is aimed at fostering the above-mentioned objectives – and particularly between those twelve nations which constitute parties to the Agreement, namely, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, VietNam, Singapore, the United States; also contains thirty chapters specifically dedicated to the following topics and sections:

During the third and final Presidential US debate on the 19th October 2016 and on the economy, and with particular respect to job creation, Hillary Clinton added that competing with high wage economies would be facilitated by raising the minimum wage. To which she added that” We need to go where the money is.”

From this perspective and topic, Donald Trump, continually reaffirmed his position and view on NAFTA stating that new trade deals were required where the present ones could not be renegotiated. Further, he added that he would renegotiate deals to bring back jobs and address the national debt.

Both candidates also affirmed their stance on the Trans Pacific Partnership – which is likely to encounter fierce opposition during the incoming administration as they both presidential candidates appeared to be clearly against the Agreement.

At a campaign rally in Delaware County Fair, Ohio on the 20th October, later that week, Donald Trump, as well as setting out plans to end government corruption and economic stagnation, reaffirmed his commitment towards the renegotiation of NAFTA, and regarded the Trans Pacific Partnership as a disaster which made no mention or reference to “currency manipulation” or safeguards against such an activity despite the Agreement containing huge volumes of documentation.

The incoming US administration also presents a stark contrast to the approach currently embraced by the current UK government – and new Prime Minister, Theresa May, an approach largely impacted by Post Brexit concerns. Current indicators also suggest and point to evidence of growing economic ties between the UK and China:

Brexiteers talk excitedly about the opportunities to improve access to India and China, to Commonwealth countries such as Australia and, most importantly, to the US. On closer examination, there doesn’t seem that much to be excited about.

The reality is that most of India’s services markets are heavily protected and it seems unlikely that they will suddenly be opened up to the UK in a way that hasn’t been offered under the EU-Indian free trade agreement negotiations launched almost a decade ago. (Financial News, 2016)

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