The Political Economy of International Trade



Table of Contents

Introduction2

Discussion2

International Trade Policies3

International Political Economy4

The political economy of trade policy: Theoretical framework5

History of U.S. Free Trade6

Effect of Dumping on Free Trade7

Effects of Tariff on Free Trade8

Obstacles to Free Trade8

Compromise Considered9

Defense of government intervention10

Determination of Trade Policy11

Defense of free trade11

Conclusion and Recommendations12

Introduction

The international political economy is a branch of political science and economics that studies international relations theories and methods for using political economy. Specialists in international political economy study trade relations and financial relations between countries. Also, try to understand how countries have developed and maintained institutions to regulate the flow of economic and financial transactions worldwide. Two of those considered as specialists in international political economy major British are Susan Strange and Robert W. Cox led the British School of International Political Economy.

International trade involves the study of trade in goods and services between nations. The globalization process that integrates the world in the economic, political and cultural life has been a favorable environment for the expansion of international trade, with increasing participation of the different economies and economic actors in the global market. Thus, the world becomes the object of study of international trade professionals. Trade between nations has implications for decisions of the different actors involved in it, as the state that in order to achieve economic development and welfare of the population, an economic policy designed in the field of trade, exchange, fiscal, monetary and other, so the theoretical aspects which justify the exchange between nations and the design of trade policy become the basic foundation that guides the study of International Trade.

Discussion

Since 1994, policy makers in North, South and Central America have been discussing a proposal that would eliminate trade barriers throughout the Western Hemisphere. Recently, leaders from 34 nations agreed to finalize that pact, the Free Trade Area of the Americas (FTAA), by 2005. Yet opposition to the FTAA is fierce. Free trade agreements have been a controversial topic among U.S. policy makers for years. Under a free trade treaty, participating nations agree to eliminate tariffs--special taxes imposed on imported goods to make them more expensive than domestic products--and other trade barriers in order to encourage trade with one another. Economists say that increased foreign trade spurs economic growth by encouraging competition and opening up new markets for exports (Leontieff, 1999). U.S. policy makers reduced barriers to foreign trade, the U.S. economy flourished.

International Trade Policies

International trade policy is a government order to maximize their own interests, to promote their rapid economic development, achieve equitable distribution of national income taken to restrict or to encourage free-trade policies. Theories of international trade and liberalization of international trade policy have long been dominated; however, this is a world in which implementation of free trade policies have not been implemented yet. Most of them are to take all the trade restrictions or protectionist policies (Cohn, 2002).

The objective of the International Trade Policies is focused towards an extension of the integration between nations' economy, which means not only expanding markets, ...