AssignmentJuly 1 2017 Some handpicked global issues have been discussed from United States’ perspective and attempts have been made to understand the implications of some such actions. ITWTO-Group Assignment Contents TOC o “1-3” h z u 1United Sates (U.S) PAGEREF _Toc486686556 h 2The U.S. is a country of 50 states covering a vast swath of North America, with Alaska in the northwest and Hawaii extending the nation’s presence into the Pacific Ocean. Major Atlantic Coast cities are New York, a global finance and culture center, and capital Washington, DC. Midwestern metropolis Chicago is known for influential architecture and on the west coast, Los Angeles’ Hollywood is famed for filmmaking. PAGEREF _Toc486686557 h 22Key Issues w.r.t U.S PAGEREF _Toc486686558 h 23U.S Relationship with NAFTA PAGEREF _Toc486686559 h 23.1What is NAFTA? PAGEREF _Toc486686560 h 23.1.1Advantages ; Disadvantages of NAFTA from U.S perspective PAGEREF _Toc486686561 h 23.1.2Advantages: PAGEREF _Toc486686562 h 23.1.3Disadvantages of NAFTA PAGEREF _Toc486686563 h 33.2Relationship with WTO PAGEREF _Toc486686564 h 33.3President Mr Donald Trump – Climate Change, Trade Policy ; Unemployment PAGEREF _Toc486686565 h 33.3.1Climate Change ; Action PAGEREF _Toc486686566 h 33.3.2Trade Policy ; Unemployment PAGEREF _Toc486686567 h 43.4Facts of U.S PAGEREF _Toc486686568 h 6Currency: United States Dollar PAGEREF _Toc486686569 h 6Gross domestic product: 17.95 trillion USD (2015) World Bank PAGEREF _Toc486686570 h 6GDP per capita: 55,836.79 USD (2015) World Bank PAGEREF _Toc486686571 h 6Minimum wage: 7.25 USD per hour (Jul 2015) PAGEREF _Toc486686572 h 6Unemployment rate: 4.7% (Dec 2016) PAGEREF _Toc486686573 h 6GDP growth rate: 2.4% annual change (2015) World Bank PAGEREF _Toc486686574 h 6Gross national income: 18.14 trillion PPP dollars (2015) World Bank PAGEREF _Toc486686575 h 64Bibliography PAGEREF _Toc486686576 h 6 United Sates (U.S)The U.S.
is a country of 50 states covering a vast swath of North America, with Alaska in the northwest and Hawaii extending the nation’s presence into the Pacific Ocean. Major Atlantic Coast cities are New York, a global finance and culture center, and capital Washington, DC. Midwestern metropolis Chicago is known for influential architecture and on the west coast, Los Angeles’ Hollywood is famed for filmmaking.Key Issues w.r.t U.SRelationship with NAFTA Relationship with WTO ( Dispute settlement) President Mr. Donald Trump – Climate Change, Trade Policy ; Unemployment U.S Relationship with NAFTA What is NAFTA?North American Free Trade Agreement is a piece of regulation that came into effect on 1st January, 1994 among three counties i.e.
U.S, CANADA ; MEXICO to eliminate most of the tariffs on goods and services traded among these countries. Numerous tariffs (with a particular focus on those related to agriculture, textiles and automobiles) were phased out on a gradual basis. About one-fourth of all U.S. imports (especially crude oil, machinery, gold, vehicles, fresh produce, livestock and processed foods) come from Canada and Mexico, which are the United States’ second- and third-largest suppliers of imported goods.
The Clinton administration, which signed it into law in 1993, believed NAFTA would create 200,000 American jobs within two years and one million within five years because exports played a major role in U.S. economic growth. Advantages & Disadvantages of NAFTA from U.S perspectiveAdvantages: Definitely there were advantages of NAFTA which was noticed. The following straight advantages are Trade was eased out between three countries which led to economic growth of all the three countries. Trade between three countries have witnessed more than 4 fold growth in last 23 years. Groceries were imported at cheaper prices to U.S.
Since, there were no tariffs; grocery was imported at cheaper price to U.S. U.S could import more oil from Mexico and Canada which means there was lesser dependency on Middle East for oil import. U.S. farm exports to Canada and Mexico grew 156 %. That’s compared to a 65 % increase in farm exports to the rest of the world.
Farm exports to Canada and Mexico alone were greater than exports to the next six largest markets combined. NAFTA exports created five million new U.S. jobs. Most of those jobs went to 17 states, but all states saw some increases. U.S.
manufacturers added more than 800,000 jobs between 1993 and 1997. That’s because manufacturers exported $487 billion in 2014. It generated $40,000 in export revenue for each factory worker. (Source: “NAFTA Triumphant: Assessing Two Decades of Gains,” U.S.
Chamber of Commerce, October 27, 2015.) Since NAFTA was enacted, U.S. foreign direct investment in Canada and Mexico has more than tripled. It reached $452 billion by 2012 (NAFTA Website). That boosted profits for U.S. businesses by giving them more opportunities to develop, and markets to explore. Government Spending was reduced since, member countries allowed to bid for government project for U.S. Disadvantages of NAFTASince labour is cheaper in Mexico, many manufacturing industries withdrew part of their production from the high-cost United States.
Between 1994 and 2010, the U.S. trade deficits with Mexico totalled $97.2 billion. In the same period, 682,900 U.S. jobs went to Mexico. Mexico lost 1.3 million farm jobs.
The 2002 Farm Bill subsidized U.S. agribusiness by as much as 40 % of net farm income. When NAFTA removed trade tariffs, companies exported corn and other grains to Mexico below cost. Rural Mexican farmers could not compete. U.S wages were suppressed.
Relationship with WTOAs of now U.S has already files 254 dispute cases to WTO out which 114 cases were filed as complainant and 140 cases were files as third party. China’s entry in WTO in 2001 created rift for different reasons. U.S perceived China’s entry is major cause of loss of manufacturing jobs in U.S. In the 16 years before China joined the WTO – from 1984 to 2000 – U.S. industrial production grew by almost 71 %.
In the period from 2000 to 2016, U.S. industrial production grew by less than 9 % (THE PRESIDENT’S 2017 TRADE POLICY AGENDA, 2017). WTO members agree to settle their trade disagreements within the organization’s trade dispute settlement system, which is designed to be unbiased. But evidence suggests that the WTO system may favor U.S. and European Union exporters. One paper finds WTO dispute settlement panels actually moderated the scope of judgments against the E.U.
and the United States — the organization’s most powerful members. Moreover, the United States has pushed to keep the WTO panel more pro-American (Washingtonpost, 2016). President Mr Donald Trump – Climate Change, Trade Policy ; UnemploymentClimate Change ; ActionThis is an agreement between UN countries to work towards dealing with greenhouse gas emissions with one of the objective to “Holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change” (Forbes.com, Sep 2016). Paris Agreement for Climate was a weak pact since there was no compulsion on target nations. It was voluntary and there was no penalty for non-compliance of target after 2020.
U.S withdrew from Paris Climate accord on the ground of imposing unfair environmental standards on American businesses and needs to be renegotiated. Moreover, new government of U.S cancelled the aid of USD 2.5 billion to developing nations (Initiative of Obama government) for pollution control. Withdrawal of U.S may be the reasons or excuse for developing nation for not being the environmental actor. Climate action will be in backtracking in the absence of U.S and UK/EU may take the lead. Trade Policy ; Unemployment By withdrawing from the Trans-Pacific Partnership (TPP), the President sent a clear signal that the United States would take a new approach to trade issues, and paved the way for potential bilateral talks with the remaining TPP countries.
Combined trade deficit in goods with Canada and Mexico was more than $74 billion. U.S can withdraw from NAFTA if such renegotiations were unsuccessful. Unemployment is 4.7 % (3.4 Facts) is H1-B visa rule has been tightened vide executive order. Expected change in minimum income of H1-B visa holder is $130000. That will affect Indian IT industry forcing to employ more and more Americans. Figure 1 TOC h z c “Figure” No table of figures entries found.Overview Last Reference Previous Range Frequency GDP Growth Rate1.4 % Mar/17 2.1 -10 : 16.9 Quarterly Unemployment Rate4.3 % May/17 4.4 2.5 : 10.8 Monthly Inflation Rate1.9 % May/17 2.2 -15.8 : 23.7 Monthly Interest Rate1.25 % Jun/17 1 0.25 : 20 Daily Balance of Trade-47617 USD Million Apr/17 -45283 -67823 : 1946 Monthly Government Debt to GDP106 % Dec/16 101 31.7 : 119 Yearly Figure 2Chart of NAFTA Pros and Cons List Pros Cons Worth It? Trade Increased Yes Jobs Created 5 million U.S.
jobs 682,900 U.S. manufacturing jobs lost in some states Yes Wages Average wages increased Remaining U.S. factories suppressed wages Yes Workers U.S. unions lost leverage Mexican workers exploited No Environment Canada exploited shale fields Mexican environment deteriorated No Oil U.S.
costs lower Improved Mexican economy Yes Food U.S. costs lower Mexican farmers went out of business No Services U.S. exported finance and healthcare services Yes FDI Increased None Yes Government Spending Reduced due to more competitive bidding Yes Facts of U.S Currency: United States Dollar Gross domestic product: 17.95 trillion USD (2015) World BankGDP per capita: 55,836.79 USD (2015) World BankMinimum wage: 7.25 USD per hour (Jul 2015)Unemployment rate: 4.7% (Dec 2016)GDP growth rate: 2.4% annual change (2015) World BankGross national income: 18.14 trillion PPP dollars (2015) World BankBibliography BIBLIOGRAPHY http://data.worldbank.org/indicator/NY.GDP.MKTP.KD?locations=US. (n.d.). Retrieved July 1, 2017 http://unctad.org/en/Pages/statistics.aspx.
(n.d.). Retrieved July 1, 2017, from http://unctad.org/en/Pages/statistics.aspx http://www.investopedia.com/terms/n/nafta.asp. (n.d.). Retrieved July 1, 2017 https://tradingeconomics.com/united-states/indicators. (n.d.). Retrieved July 1, 2017 https://ustr.gov/sites/default/files/files/reports/2017/AnnualReport/Chapter%20I%20-%20The%20President%27s%20Trade%20Policy%20Agenda.pdf.
(n.d.). Retrieved July 1, 2017 https://ustr.gov/trade-agreements/other-initiatives/asia-pacific-economic-cooperation-apec/us-apec-trade-facts. (n.d.). Retrieved July 1, 2017 https://www.bls.gov/eag/eag.us.htm. (n.d.).
Retrieved July 1, 2017, from https://www.bls.gov/eag/eag.us.htm https://www.forbes.com/sites/stratfor/2017/06/06/paris-and-beyond-a-climate-change-accord-without-the-u-s/2/#1415acda51eb. (n.d.). Retrieved July 1, 2017 https://www.thebalance.com/disadvantages-of-nafta-3306273. (n.d.).
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