Question

Consider the impact that trade, politics, and religion has in this unit. Of the three, which do you feel made the greatest impact on this period? Provide at least one example from the reading to support your choice.

Please use a minimum of 200 words

Answer 1

• From the perspective of the U.S. economy as a whole, trade is one among a number of forces that drive changes in employment, wages, the distribution of income, and ultimately the standard of living. Most economists argue that broad macroeconomic forces, including technological advances, are generally considered to be more important than trade.
• Economists generally conclude that trade provides net overall positive benefits to economies. Changes in trading patterns associated with changes in trading partners and composition or with new trade agreements, however, may entail certain adjustment costs, including changes in employment, which can be highly concentrated with some workers, firms, and communities affected disproportionately.
• In discussions of trade agreements, both proponents and opponents use the results of a variety of trade models and underlying assumptions to estimate the impact on the U.S. economy. Such models have various strengths and weaknesses, although not always in equal proportion. Most economists argue that such estimates represent a partial accounting of the total economic effects and, therefore, are not representative of the overall impact of trade agreements on the U.S. economy.
• Some argue that trade, trade agreements, and globalization more broadly contributed to growing wealth and income equality within countries. Growing income inequality domestically is not unique to the United States, or even to developed countries, but is found in both developed and developing countries. Despite intense focus in the academic literature, there is no consensus on the direct impact that trade or trade agreements have on income inequality.
• Congress faces a number of challenging policy issues relative to trade and the impact of trade agreements on the U.S. economy. These challenges include assessing the quality of data on trade and what, if any, additional resources should be devoted to collecting trade data and analyzing the role of trade in the economy. Congress also has legislative and oversight responsibility over various government programs that assist workers and firms adjust to increased competition from trade.

The effects that trade and trade agreements such as the TPP have on economic growth and employment are often among the most controversial issues. Economic theory concludes that the economy as a whole benefits over the long run from a more open trade environment and greater competition, because such an environment pushes an economy to use its resources more efficiently. Standard economic theory also recognizes that some workers and producers in the economy may experience a disproportionate share of the short-term adjustment costs that are associated with shifts in resources stemming from greater international competition. Although the attendant adjustment costs for businesses and labor are difficult to measure, some estimates suggest they may be significant over the short run and can entail dislocations for some segments of the labor force, for some companies, and for some communities. Closed plants can result in depressed commercial and residential property values and lost tax revenues, with effects on local schools, local public infrastructure, and local community viability.

Many research organizations, academics, and others are analyzing the impact of trade on employment. A group of 10 international organizations, including the Asian Development Bank, the International Labor Organization, the World Bank, the Organization of American States (OAS), Organization for Economic Cooperation and Development (OECD), World Trade Organization (WTO), and the United Nations Conference on Trade And Development (UNCTAD), among others, joined together to form the International Collaborative Initiative on Trade and Employment (ICITE) to analyze the relationship between trade and employment.

A study published by ICITE surveyed the economic literature on trade and employment and restated the general position that over the long run higher levels of international trade are associated with positive rates of economic growth, rising wages, and higher levels of employment. Similarly, higher levels of economic growth are associated with higher levels of international trade, which complicates efforts to disentangle cause and effect relationships between economic growth and trade. The study also concluded that countries that experienced greater trade liberalization also experienced higher levels of investment, higher levels of productivity, and improvements in both physical and human capital. In addition, the study indicated that the positive correlation between trade and economic growth seems to be predicated on companion policies that countries adopted, including policies to create a positive investment climate and labor market as well as social protection systems that support trade liberalization

International trade is the exchange of goods and services between countries. Total trade equals exports plus imports. In 2017, world trade was $34 trillion. That's $17 trillion in exports plus $17 trillion in imports.

Exports create jobs and boost economic growth. They give domestic companies more experience in producing for foreign markets. Over time, companies gain a competitive advantage in global trade. Trade also makes companies more efficient. Research shows that exporters are more productive than companies that focus on domestic trade.