Global political economy

Answer the Following Questions:

1. Please use our three perspectives to explain why the issue of trade has always been so controversial.

First of all, we need to remember that there is not a single country in the world that can produce all goods and services required by its economy to satisfy local consumption in an efficient manner or at a reasonable cost, due to the differences inresources among the countries.

For example; it is a fact that Japan depends on food imports to satisfy their internal demand. In the other hand, other countries may depend on Japanese exports. This same example can be applied to any other country with almost every commodity. In other words, it will seem that all countries depend on each other to satisfy their needs. As a result, the marketbecomes this way self-motivated, self-cooperative and self-regulated.

The economical integration of the markets (mostly known as globalization) has promoted the growth of international trade at an exponential rate in the last 30 years. Many nations around the globe have promoted free trade policies to incentive international trade, local consumption and to attract domestic and foreigninvestments. As a result, the wealth of the Countries has increased and the consumers in general can find almost any good with a good quality level from any part of the world at fare prices.

On the flip side, this same globalization process has inevitably caused many trade disputes between the nations, because many economical and even political interests are affected by this process. This is explainedbecause persons, companies and even governments from one country are competing with their counterparts of others countries to increase their wealth or economical and political influence.

In many cases the gain (jobs, investments, etc.) of a country means the loss of another one, given the tremendous competition that exists nowadays. The ramifications or consequences of these disputes are notonly limited to the economical arena, but they may also have deep internal and external political repercussions; even sometimes a trade dispute has turned into armed conflicts. Finally, some poor undeveloped countries that are not in conditions to compete in an equally manner seem excluded of this process (i.e. Haiti).

For all the reasons mentioned above, some countries will adopt aliberal, mercantilist or even structuralist approach according to their own economical interests and political agenda. Regardless of the approach used, there will be controversies because every country is looking to accomplish their respective interest and sometimes some nations may not play fair (dumping, trade tax barriers, etc) when doing business.

2. Regional trade arrangements have proliferatedin recent years. Are these good or bad from a liberal point of view? Why or why not?

A regional trade arrangement (RTA) exactly reflects the spirit of the free market.

When two or several countries decide to sign a RTA with the objective to benefit the consumers on both sides of the borders by offer them cheaper and better products, other expected effects are the increase in theinvestments flows that will create more jobs opportunities that will improve the income of the families and their respective consumption, at the end of the day the economy of the members becomes bigger and stronger with better opportunities for all.

By gradually eliminating trade barriers (like taxes, importation quotas, etc) the markets will be in a much better position to allocate all productionresources like money, labor and production in a much more efficient manner to accomplish the process described above.

So, a RTA is definitively a good thing from a liberal point of view, the concerns are much less than the benefits.

3. What are intellectual property rights (IPRs) and why are they so controversial in today’s global markets? Briefly compare and contrast the mercantilist,...