Part 1. Question 1. International political economy
Part 1.
Question 1.
International political economy
It studies issues that emerge or are influenced by the presence of global politics, economics and finance, and various social structures (e.g., capitalist and communism) and social classes (e.g., small farmers, different ethnicities in a country, immigrants in an area like the European Union, and the disadvantaged who live transnationally in all nations). It discusses several relevant issues (‘problematics’) that emerge from problems such as global trade, international finance, ties among more affluent and disadvantaged countries, the position of foreign corporations, and the issues of dominance (physical or social domination). The economy will continue to differ with the issue being studied. Topics can be perceived from several conceptual viewpoints, like mercantile, progressive, and systemic (Marxist or neo-Marxist) perspectives. Libertarian socialists are closely linked to pragmatists, concentrating on conflicting national interests and resources in a strategic struggle to gain control and safety (Ghushchyan, 2019). Liberals are hopeful about the potential of citizens and states to establish good ties and world order.
Social liberals, in particular, could restrict the position of the government in the market to allow market factors to settle on economic and social results. Systemic theories are grounded in Marxist theory and focus on how the existing financial systems of society are affected of these viewpoints is frequently applicable to issues at a range of different levels of study that lead to complicated underlying causes of violence due to human existence (personal level), national interests (global scale) and the framework of the global system (which requires a central ruler to avoid war). For instance, evaluation of the U.S. A policy on immigrants from Mexico must bear into account trends of trade and development among the two nations and political priorities on all sides of the border.
Question 2.
Reasons for the imposition of steel tariffs by Bush administration
Several cycles of restrictions have been introduced and imposed by the Bush administration, and other nations have reacted to these measures. The use of the Tax Framework Taxes and Economic model, we examine the impact of levied, expected, and intimidatory tariffs on the economies of the U.S. Tariffs are harmful to financial well-being and result in a total loss of revenue and work and a reduced income level. Tariffs often appear to be regressive, placing the most pressure on lower-income customers. As per the model of the Tax Foundation, the restrictions implemented so far by the Bush administration would decrease long-term GDP by 0.23 percent cent ($58.02 billion) and salaries by 0.15 percent and remove 179,800 comparable full-time jobs. If the Bush government were to proceed with pending threats to levy new tariffs, GDP would fall by a further 0.24% ($59.40 billion), leading in 0.17% lower salaries and 184,200 less corresponding full-time jobs. Many nations have reported plans to place tariffs on U.S. exports. If such taxes are entirely levied, that is calculated by the U.S. GDP would decline by another 0.04% ($9.79 billion), and it would cost an extra 30,300 full-time corresponding positions. If all of the tariffs declared so far have been completely implemented, the U.S. GDP will decline by 0.51 percent ($127.21 billion) in the long run, mostly offsetting about one-third of the long-term effects of the Tax Reductions and Employment Act.
Consequences of the imposition of tariffs by Bush administration
Economic experts usually agree that free trade raises the amount of commercial production and revenue and, alternatively, that obstacles to trade reduce future output and earnings. Empirical evidence suggests that tariffs increase costs and decrease the number of goods and services accessible to U.S. firms and customers, resulting in lower wages, decreased jobs, and lower socioeconomic performance. Tariffs may reduce U.S. production across a few channels. One explanation is that duty will be passed on to suppliers and customers in the form of higher. Taxes increase the cost of raw materials that would raise the price of products using such products and decrease the production of the private industry. This will lead to reduced wages for both asset owners and employees. Likewise, higher commodity prices due to tariffs will increase the after-tax benefit of both employment revenue and capital income. Since these higher costs would minimize the return on labor and capital, they could motivate Americans to work and spend less, contributing to reduced production.
Question 3.
Multinational corporations and their global economies are dominant in the world. The OECD (2018) reports that MNCs account for part of global exports, approximately one-third of world GDP (28%) and about one-fourth of international employment. Each of these companies produces a large share of its foreign revenue.1 Crucially, their multinational operations have changed the essence of global trade, innovation, and technology transfer in the age of globalization. Large global supply chains (GVCs) prevalent in today’s global environment have also been influenced by how Multinational Corporations organize their international operations by restructuring and outsourcing. Nevertheless, their judgments have tremendous consequences for a wide range of policy concerns, such as taxes, investment security, migration, along with a large number of countries with specific economic and political organizations.
MNCs can also have a high domestic political impact. Nonetheless, their international economic supremacy can go hand in hand with their strong internal political role. The latest political trends have brought international lobbying activities to the fore. Multinational companies have firmly criticized the Trump administration’s rising trade tensions, increasing migration controls, and undermining global value chains. Intense lobbying, though, is not necessarily equal to political power. Although the Bush administration has generally rejected MNC’s attempts to retain preferential trade deals, individual firms have forcefully pressed for tariffs waivers. In other political areas, like corporate taxes and the planned Destination-Based Cash Flow Tax, multinationals have worked intensely on both aspects of the issue.
Question 4.
The propositions of classical mercantilism
Mercantilism has substituted the patriarchal socio-economic system in Western Europe. At the time, England was the center of the Empire at the time but had minimal resources. To maximize its assets, England adopted economic policies that prevented colonizers from purchasing foreign goods, while at the same time developing opportunities to buy only British products (Elobeid, 2019). For instance, the Sugar Act of 1764 increased duty on international processed sugar and brown sugar manufactured by the colonists in an attempt to give British sugar farmers a stronghold on the colonial sector in the Subcontinent. Similarly, the Trade Act of 1651 forbade international merchants from interacting with the British Coastal, and colonial shipments had to overcome British regulation first despite being dispersed across Europe. These policies have resulted in a favorable trade balance that has boosted Britain’s national wealth. Through mercantilism, states have increasingly employed their strategic influence to help guarantee that food markets and resource outlets are secured, to promote the belief that the economic performance of a country heavily relies on its capital supplies. Mercantilists also assumed that the financial performance of a state would be measured by its degree of possession of base metals, such as gold or silver, that continued to increase with increasing current home building, improved agricultural output.
The ideal challenge
The most successful advocate of mercantilism studied international trade financial theories and was ideally qualified to carry out such ideas. As a religious monarch, Colbert asked for an economic policy to defend the French monarchy from the growing Dutch mercantile class. Colbert also raised the scale of the French Navy, claiming that France needed to monitor its trading lines to maximize its resources. Though his methods eventually became unsuccessful, his theories were immensely prevalent until they were overwhelmed by the philosophy of free-market economics.
Part 2.
Question 2.
Arguments in favor of international organizations
RTA advocates see them as foundation blocks for a freer, more competitive, international trade. We are required to fulfill this task as it is simpler for a couple of countries to achieve an understanding of complex trade issues than for a considerable number of nations to negotiate similar agreements (Baji, 2020). Moreover, the internal consequences of raising barriers to trade are less severe as fewer parties are involved. Production flows and work cuts and displacements are lower and more straightforward to handle. Also, RTA representatives will experiment with existing agreements, such as labor and ecological standards, which are too controversial in a more extensive collection of negotiations. Defenders challenge these premises and claim that RTAs undermine progress in multilateral negotiations, like the WTO Doha Process.
They claim that RTAs radicalize nations since they are biased towards semi-members and since they weaken smaller nations that join into talks with big ones because small states cannot compromise efficiently and are therefore not able to reap the benefits of the markets open of a bigger country owing to their small networks and other assets. Bangladesh may be affected by a free trading deal among the United States and Tropical America as a consequence of a potential transfer of trade. If Bangladesh is the cheapest cost manufacturer of clothes, for instance, the U.S. duties on Center America will be reduced.
Works cited
Baji, P., Farkas, M., Golicki, D., Rupel, V. P., Hoefman, R., Brouwer, W. B., … & Péntek, M. (2020). Development of Population Tariffs for the CarerQol Instrument for Hungary, Poland and Slovenia: A Discrete Choice Experiment Study to Measure the Burden of Informal Caregiving. PharmacoEconomics, 1-11.
Elobeid, A., Carriquiry, M., Swenson, D., & Hayes, D. (2019). Analysis of the Eeffects of chinese and mexican retaliatory tariffs on select U.S. agricultural commodities on U.S. and global markets. Serie Documentos de Trabajo; 22/19.
Ghushchyan, V. (2019). PNS237 TIME TRADE-OFF TARIFFS BASED ON SF-12 QUESTIONNAIRE. Value in Health, 22, S326.