Political Economy of International Relations †MyAssignmenthelp.com

Question: Discuss about the Political Economy of International Relations. Answer: Introduction: Along with economic, social and welfare aspects, there are political perspectives also regarding the pros and cons of free trade in the international framework. There are political arguments both in favor of as well against free trade economics. The political arguments which exist in the international scenario in favor of free trade primarily suggests that it can be beneficial for the well being of the residents of a country as a whole if there is political commitment on part of the country to free trade (Mansfield Milner, 2012). This is because in the absence of free trade, though imposition of tariff and other trade restrictions and export subsidies can benefit some sectors apparently, however, in practice, often these steps go in favor of several interest groups. This in turn works towards economically benefitting the sectors, which are politically influential by diverting the advantages of these restrictions to those sectors. There has been mixed responses and outcomes regarding the above-discussed political argument for free trade. While some countries, especially the developed ones have benefitted from free trade, which actually increased the overall wellbeing of the people and headed for a more equitable income distribution, in many low developed and poor countries free trade actually aggravated the problem of poverty and class based inequality in income (Hillman, 2013). In the contemporary global economic scenario, China and India are evidently emerging as the new economic giants for the near future era, with both the countries showing growth trends and economic booms, which are sometimes highly surpassing those of the developed western world. In 2015, the growth of the per capita GDP of China was 6.4% and that of India was 6.3%, while in 2016, the growth became 6.2% and 6.6% respectively for the two countries. These growth rates are evidently few of the highest growth rates ever achieved by any country, including the western economies. Compared to these countries, the developed economies had hugely low rates of growth (1.3% in the USA, 0.2 in Japan and 1.6% in the European Union in 2016). As can be seen from the above the GDP grew hugely for the two countries between short intervals of 2007 to 2015. Apart from GDP, the consumption, especially household consumption of both the countries experienced a considerable pace in growth, thereby indicating that both the countries are experiencing economic boom (Bardhan, 2012). One of the primary things, which are common in the economic framework of both the countries, is that both the countries have experienced a tremendous boost in the state investment during the current period, with the goal of the governments of the countries being achieving higher economic growth. This phenomenon, being highly subjective to these two countries, has possibly contributed significantly to the impressive economic growth trends, which both of these countries are showing (Rodrik, 2014). It has been observed in many cases that there remains a striking difference between the theoretical notions regarding trade, especially free trade and the practical implementations of such policies in the real global economic scenario. A significant share of these differences can be attributed to the political construct and the political behavior prevailing in the concerned countries (Gilpin, 2016). What type of trade policies a country will adopt, depend on the political pattern prevailing in the country. In general, a country with democratic framework supports the free trade policy for the greater welfare of people in the country. However, in the countries with a more autocratic political framework, there are mostly protectionist patterns regarding trade agreements and trade policies. It often happens in many such cases that the politically influential classes incline the trade policies towards their own benefits and forces the implementations of restrictive and facilitative trade policies targeted to fulfill their vested interests, thereby creating a distortion in the benefit from trade across the different societal and economic strata of the concerned countries. The trade relations of the United States of America, in the international trading scenario, are highly influenced by the political influences and the political parties, which come in power with time, in the country. The USA, being the largest and the most influential and powerful economies in the world, has significant implications in the international trade and commerce. Their policies, both economic as well as political, have immense implications on the global trade scenario as well as on the countries, which are actively in trade relations with the country or are in the list of embargoes of the same (Draper, 2017). Among the top trading partners of the country are Canada, China, Mexico, Japan, Germany and the United Kingdom, with the first three enjoying significant shares of the total valuation of the trade sector of the USA and having strong export and import relations with the country. The strong bilateral commercial ties between the USA and these countries have contributed immensely to the growth of the economies of both the countries over the decades. On the other hand, there are several countries, which lie in the list of trade embargoes of the United States of America. Among these countries, the primary ones are Burma, Cuba, North Korea and others. The main reasons behind these sanctions on part of the USA are political or military unrest, which reflects on their on their deteriorated and non-progressive economic conditions of the countries (Oatley, 2015). The embargoes and trade relations of the country, however, largely fluctuates with the changes in the political conditions prevailing in the country. For instance, with the recent political trends prevailing in the country, according to the proposed executive orders of the new president, there can be a more stringent embargo on the North Korea and a proposed on China. This, however, if gets implemented will have tremendous implications on the trade relations as well as on the overall economic and economic growth conditions of both the global economic giants. References Bardhan, P. (2012).Awakening giants, feet of clay: Assessing the economic rise of China and India. Princeton University Press. Draper, T. (2017).American business and public policy: The politics of foreign trade. Routledge. Gilpin, R. (2016).The political economy of international relations. Princeton University Press. Hillman, A. L. (2013).The political economy of protection. Taylor Francis. Huffingtonpost.com. (2017).Why Are China and India Growing So Fast? State Investment.HuffPost. Retrieved 23 October 2017, from https://www.huffingtonpost.com/john_ross-/china-india-growth_b_11655472.html Mansfield, E. D., Milner, H. V. (2012).Votes, vetoes, and the political economy of international trade agreements. Princeton University Press. Oatley, T. (2015).International political economy. Routledge. Rodrik, D. (2014). The past, present, and future of economic growth.Challenge,57(3), 5-39. https://www.gcf.ch/wp-content/uploads/2013/06/GCF_Rodrik-working-paper-1_-6.17.131.pdf