The World, Politics and Economics.
I don’t usually mix politics in much of anything as it pertains to my firm. However, I feel compelled to comment on the American Presidential Election. The enormity of such a Presidential Election will weigh heavily on America’s domestic economy as well as the world at large. Additionally, the outcome of who becomes the President of The United States of America could impact our economic trade agreements and how we operate in the world markets. I might add that I have studied Globalization and Labor for almost two years along with my EMBA studies. Thus, the content that I provide in this article is cited and credible.
Let’s begin with the World Markets and define what Globalization really is. The term Globalization depicts an international integration of world markets and businesses to further enhance the economic prosperity of such participating countries. Further, the way in which the world operates through its world views, culture, ideas, products and legislation share an interdependence that creates globalization as we know it today. In addition to domestic legislation (from countries that participate in the free world market), the world markets are typically involved with agencies such as the IMF and the World Bank. Both the IMF and the World Bank are entities that were designed to help expand and monitor economic and business opportunities relative to the world at large. Moreover, these two world agencies help provide assistance to countries that do not have access to traditional networks that would otherwise support their economic needs. Further, the agencies provide financial assistance to countries that cannot borrow from traditional sources in light of improving their regional or local economies overall.
The world market is fascinating and worth expanding upon. The world operates in a multilateral political climate to the extent that what happens in one country may impact the outcome of an economic or political landscape in another country. Here in the United States of America, we are in the midst of a National Election in which the citizens of the collective United States vote in a democratic process to determine the future leader of the free world and the future leader of our United States of America. The president of the United States of America will have an enormous impact on the world markets and trade balance, embargo, sanctions and the like. As such, the two candidates, incumbent President Barack Obama and Governor Mitt Romney are engaged in a democratic contest that will end shortly and the people of the United States of America will speak to the world and announce the leader.
The election outcome here in the States will determine and contribute to economic policy and trade policy in the world markets at large.
The chosen leader will (usually) actively interact with the world at large. The leader will also actively engage as it relates to enhancing the business of the United States of America and its trade relations and operations of the world markets at large. Some leaders have been more active than others in the past. The past two Presidents and the current President of the United States of America have contributed to global economic trade policies as such:
President Bill Clinton worked tirelessly to establish NAFTA with much resistance and push back. This statement sums it up:
1993: NAFTA passed, but at a high price of dividing Dems
“November offered two examples of sound policy and questionable politics. After Al Gore plainly bested Ross Perot in a heavily watched TV debate in NAFTA, it passed the House, 234-200. Three days later the Senate followed suit, 61-38. Al and I had called or seen two hundred members of Congress, and the cabinet had made nine hundred calls. President Carter also helped, calling members of Congress all day long for a week. We also had to make deals on a wide range of issues; the lobbying effort for NAFTA looked even more like sausage making than the budget fight had. Our whole team had won a great economic and political victory for America, but like the budget, it came at a high price, dividing our party in Congress and infuriating many of our strongest supporters in the labor movement.” http://www.ontheissues.org/Celeb/Bill_Clinton_Free_Trade.htm
Source: My Life, by Bill Clinton, p.557 , Jun 21, 2004
President George W. Bush discussed the financial markets and the world economy at The Federal Hall National Memorial in New York, New York 2008. According to a transcribed statement, “President George W. Bush addresses his remarks on financial markets and the world economy Thursday, Nov. 13, 2008, at the Federal Hall National Memorial in New York. President Bush said, “While reforms in the financial sector are essential, the long-term solution to today’s problems is sustained economic growth. And the surest path to that growth is free markets and free people.” White House photo by Eric Draper It will focus on five key objectives: understanding the causes of the global crisis, reviewing the effectiveness of our responses thus far, developing principles for reforming our financial and regulatory systems, launching a specific action plan to implement those principles, and reaffirming our conviction that free market principles offer the surest path to lasting prosperity. (Applause.)” http://heartland.org/policy-documents/president-bush-discusses-financial-markets-and-world-economy.
President Barack Obama supports NAFTA and has created a new trade agreement “nine nations trade agreement” that focuses on leveling the playing field of trade balance. According to Bloomberg news 2011, “President Barack Obama, working to put his own stamp on the rules of international trade, is pursuing an agreement with eight Pacific nations and looking beyond them to the prospects for adding Japan and China.
Obama and leaders of nations from Chile to Vietnam will report on their efforts to forge a Trans-Pacific Partnership on the sidelines of the 21-nation Asia-Pacific Economic Cooperation conference in Honolulu this weekend.” http://www.bloomberg.com/news/2011-11-07/obama-pushes-nine-nation-trade-deal.html
The Obama legislation for the New Nine Nations Agreement should help free trade space in world markets in light of creating profitable revenue paths for countries where progress has been impossible or severely impeded. Australia is one such country that is hopeful for such an agreement.
According to Australian Prime Minister Julia Gillard, “AUSTRALIAN farmers and manufacturers will benefit from a nine-nation free trade deal that leaders hope to have in place within a year.” Source:http://www.heraldsun.com.au/news/victoria/nine-nations-agree-to-trans-pacific-partnership/story-fn7x8me2-1226194023191
“US President Barack Obama, Prime Minister Julia Gillard and the heads of seven other Asia-Pacific nations have agreed on the broad outline of a Trans-Pacific Partnership.”
“Ms Gillard said agriculture stood to benefit “a great deal”.
“We have very efficient and productive farmers. And when you talk to them they are very alive to the barriers that prevent them getting full access into other markets,” Ms Gillard said.
“If they had full access they would well and truly compete on price and quality.”
Australia’s manufacturing sector also faced barriers to selling goods into the region.
“It frustrates many of our manufacturers that they can’t get their products to market at a fair price,” she said.
“So it’s important.”
The agreement is also set to benefit the services sector, including accounting, legal and engineering.” source: http://www.heraldsun.com.au/news/victoria/nine-nations-agree-to-trans-pacific-partnership/story-fn7x8me2-1226194023191\
So, what has President Barack Obama and the US Congress done to move this and other trade initiatives forward?
October 13, 2011
Congress Approves Biggest U.S. Trade Agreement Since 1994
“The U.S. Congress cleared free-trade agreements with South Korea, Colombia and Panama, bringing an end to years of stalemate and offering what supporters said was the biggest opportunity for exporters in decades.
The bills go to President Barack Obama, who spent two years seeking to broaden Democratic support for pacts revised from initial agreements reached by his predecessor. The South Korea deal, the biggest for the U.S. since the North American Free Trade Agreement in 1994, removes duties on almost two-thirds of American farm exports, and phases out tariffs on more than 95 percent of industrial and consumer exports within five years.
Yesterday’s step may diminish concern that the U.S. will turn to protectionism amid unemployment that exceeds 9 percent and an Oct. 11 Senate vote designed to punish China for an undervalued yuan. The approval may also give impetus to Obama’s trans-Pacific trade initiative, which Japan, the world’s third- largest economy, is considering joining.”
Additionally, “The South Korea deal would boost American exports by as much as $10.9 billion in the first year in which it’s in full effect, according to the U.S. International Trade Commission. The accord with Colombia would increase exports as much as $1.1 billion a year. The U.S. Chamber of Commerce said the accords will prevent the loss of 380,000 jobs.
Companies such as Ace Ltd., Citigroup Inc. (C) and Pfizer Inc. have led the effort to get the South Korea deal passed, while Caterpillar Inc., General Electric Co. and Whirlpool Corp. were among the biggest backers of the accord with Colombia.”
And last…President Obama states, “I’ve fought to make sure that these trade agreements” with three nations “deliver the best possible deal for our country,” Obama said in an e-mailed statement. “American automakers, farmers, ranchers and manufacturers, including many small businesses, will be able to compete and win in new markets.”
Thus, the result of the New Nine Nations Trade Agreement to date:
TPP nations put off decision / Delay in trade agreement seen as beneficial to Japan
Daily Yomiuri, Japan
TPP nations put off decision / Delay in trade agreement seen as beneficial to Japan
11 September 2012
VLADIVOSTOK, Russia (Jiji Press)—The United States and eight other nations negotiating an expansion of the Trans-Pacific Partnership trade deal have effectively postponed the conclusion of their talks, originally planned for the end of the year.
In a statement issued Sunday, leaders of the nine nations reaffirmed their commitment “to concluding a comprehensive, next-generation regional agreement that liberalizes and promotes trade and investment, and addresses new and traditional trade issues and 21st-century challenges.”
“We are confident that this goal is within our reach,” the leaders emphasized. But the statement did not say when the goal will be reached.
As it relates to the IMF and the World Bank
The statistics depict:
- Substantial growth in Developing Asian Markets
- Moderate Growth in Europe and the Western Hemisphere
- Slow Growth in Middle East, North Africa and Sub-Saharan Africa
I also encourage you to look at the World Bank Stats as it relates to Emerging Markets and how they are financed on a global scale. I will further encourage you to think about sustainability in the financial markets of developing countries relative to that countries credit rating, GDP and GDP per capita.
The World Bank states:
Leveraging Trade for Development and inclusive Growth: The World Bank Group Trade Strategy 2011-2021: builds on the types of support the WBG has already started to provide in response to developments in the global trading system that have emerged in recent years. From programs once focused narrowly on trade liberalization, the WBG has moved its support towards greater efforts at promoting export diversification; lowering transport and other trade-related costs; improving access to trade finance; and, focusing more on the poverty implications of greater openness to trade.
But trade does not take place in a policy vacuum. As an essential driver of economic growth, it must be better integrated into national development strategies and associated Bank programs. To this end, the WBG will work with its client countries and development partners in a more coordinated and effective way to ensure the gains from trade are maximized and its benefits more equally shared.
The stats are as such:
World Bank Group’s Aid for Trade Program
|The Aid for Trade is a multilateral initiative to assist developing countries, especially low-income countries, integrate into the world economy as a way to spur growth. Launched formally in 2005 at the Hong Kong Ministerial of the WTO, the initiative was designed to help developing countries take advantage of market openings by overcoming obstacles hampering trade – poor infrastructure, trade-stifling regulations, and policy disincentives – as well as finance domestic adjustment to any new liberalization. The The Aid for Trade Program of the World Bank Group (WBG) is multifaceted, encompassing concessional lending to low income countries and non-concessional lending to middle-income countries for trade-related projects, investments by the World Bank’s private sector arm – the International Finance Corporation (IFC) -in private sector activities such as trade finance, as well as policy advice and technical assistance embodied in studies such as Diagnostic Trade Integration Studies (DTIS) undertaken in the context of the Integrated Framework for Technical Assistance to Least Developed Countries. At present, the WBG is in the process of consultations with all stakeholders to prepare a new trade sector strategy which is intended to further enhance the responsiveness of the WBG‘s trade programs to the needs of developing countries.
Now that you are a “WIP” (Well Informed Person) make sure that weigh in on the broader stage of the world market(s). I encourage you to understand how the world operates and how decisions from a domestic perspective will impact you and your family locally. To that extent, national elections are extremely important. Your voice and your vote will make a difference. Be empowered and be savvy. Do your due diligence and fact-check your candidate of choice. Learn (for yourself) how he/she operates on the broad world stage. Globalization is here to stay and the multilateral political climate will influence and perhaps create policy that will impact all peoples in all nations and especially you and your family.
All the Best,