Question

Discuss non-monetary benefits open trade has contributed to the world since the end of WWII. Provide at least 2 examples. Why do you think these are important?

How have changes to US trade and tariff policies affected US trade with other nations? Consider recent (less than 2 years old) credible news sources to support your response.

Answer 1

1. After the end of WWII, world has seen greater cooperation, formation of multilateral economic and trade institutions such as WTO, and an increase in shared prosperity in the world. All these would not have been possible without open trade between countries.There are many non-monetary benefits that open trade has contributed to the world since the end of WWII.

( I ) Transfer of technologies:- Open trade has allowed many technologically advanced nations to share their highly advanced technologies with the developing world, which has led to an increase in production of goods in relatively underdeveloped countries as well. This has helped reduce poverty and increase industrialization of these countries.

( II ) Less conflicts between countries:- Open trade has also bound countries with economic relations which has led to decreasing conflicts between the countries around the world, as their prosperity is inter-linked with each other.

It is important for the world to have a peaceful environment and more equitable opportunities to all, especially poor countries, which will lead to shared prosperity for all.

2. Recently US government has imposed tariffs on imports of steel and aluminium from almost all the countries in the world, and tariffs on almost all the imports from China. It has led to fall in trade participation by US, as those goods are now locally manufactured. However, it has also increased cost of production for US companies, making them relatively inefficient and unproductive.

US trade with China has been of special significance, as trade war between the world's two largest economies has led to fall in economic activities in China.