America’s role in trade and investment around world

Key ideas of the development of US hegemony such as neo-liberalism

Neo-Liberalism.

Origin of neo-liberalism was in 1970 when economic crisis took place and second establishment of neo-liberalism started in period of 2000s which caused great depression in terms of decline in profit. Between these two periods it remained up to 3 decades and countries or region suffered in this were Latin world, later on Japan joined in lately with other major countries when it took place in Europe and America. China was the country which took full-fledge advantage of this phenomena in terms of division in international labor.

Political economists have concluded that neo-liberalism is actually class-based theory which explains the order of world and indicates the financial capital dominance of victorious power (Dumenil and Levy 2011; Harvey 2005). Neo-Liberalism is a global phenomenon or a social order of financial hegemony of every era. This phenomenon is actually consequence of strong capitalist victorious hegemony to its lower class the one called clerical-commercial class. It is actually gain of huge stock and capital income gained by managerial class of capitalist from popular classes. Huge income was contained in the period of World War ll was actually race about imperialism among countries to gain maximum stock and income from lower class. 

Development of US hegemony as neo-liberalism.

Studies reflect the pro-filtration of “financialisation” and refers it to the growth of financial hegemony and international markets in order to increase the structural dominance for accumulation (Krippner 2012). US hegemony arose after two world wars which changed political and financial order of world almost all regions of world and US emerged as the most powerful capitalist country than others because of its victorious dominancy in last world war. United States was leading from front as international power. Whereas, other imperialist powers lacked behind due to their involvement in defensing of their traditional empires like United Kingdom and France. However, the United States rejected traditional defense for empire and diverted it’s strategy with Wilsonian vision of dominancy with informal manner to other capitalist countries. This resulted the constant dominancy of dollar at international level and did not cause any fluctuations for dollar even some major crisis, United State hegemony maintained when world experienced some major economic crisis. 

World at some events experienced great depression regarding financial crisis in whole world, even this great depression did not affect hegemony of United States with it’s dollar stability and financial income around world. United States has huge contribution in pre and post-world War though it did not affect the financial stability to United States whereas, other capitalist countries consolidated by great loss to their financial status. United States was stick to its international trade and international movement policies and did not follow the Bretton Woods agreements of limiting its international trade and currencies according to the scenario of world. United States fought for free world and for the defense and got his dominant position around world though that war was ended with corruption and other factors and resulted United States dominancy in non-financial and financial economy of world. In 2000s United States financial model was introduced to other capitalist countries for further financial growth and he lead from the front in capitalist block (Piketty T. & Saez E 2003).

Development in International Financial Institutions.

International financial institutions (IFIs) are the major factors which describe the hegemony of financial reforms around the world and have been powerful agents which monitor the financial order of world and make policies of economic reforms for world. (Halliday and Carruthers, 2007). IMF and World Bank have great influence to introduce reforms for countries which experience financial crisis and provide them assistance for their stability. Over the years these institutions have great role in monitoring the financial status if world. These factors makes US financial hegemony and uplift her influence of leadership. United States has very strong role over international financial institutions like World Bank and the International Monetary Fund (IMF). It depicts the formal and informal dominance of United States on these organizations as they monitor the financial infrastructure of world. United States has financial influence over these institutions because he contributes major share into these organisations. After world wars and new era of post-war financial era had developed some conventions which have strong implications on the capitalist as well as communist block too.

World became under influence of United States and accepted his financial hegemony when his dollar showed its consistent stability and these two major United States originated organizations became the focus of world in order to overcome their financial crisis. Most of under developing countries around world prioritized these institutions over the time to overcome their financial crisis. However, these institutions depicts credibility and legitimacy of US influence in terms of power and policy over the world and monitor the funds throughout the world. After world war, most part of world became colonized and US focused on development of his financial status around world and imposed his strong implications by developing the institutions to dominate the financial and social order of world. 

Changes in international trade and investment including US policy changes.

Change in pattern of Global Trade and Investment.

As globalisation have changed every pattern and sector of world and has impacted great influence to every sector of world. Similarly international trade is major implication of globalisation and has changed trend of traditional merchandise trade which used to be employed in twentieth century has been converted into digitalisation trade and various developments have been seen over the decades and final stage have been reached digitalisation stage in particular terms across the border. These developments has influenced and has created great challenges for international trade and investment. As per the agreements of General Agreement on Trade in Services (GATS) which initiated in 1994 generally four modes of trade were introduced and cross-border provision which has now great implication in global trade and has been a major factor in trade services around the world. Current statistics of the United States Department of Commerce, has indicated that digitalisation of trade has created great opportunities in international trade as it has created speedy agreements and records are converted into digital documentations rather than manual one (Rachel F. Fefer, Shayerah Ilias Akhtar, and Wayne M. Morrison, 2017).

E-commerce has changed the trade implications around the world as digitalisation has made trade contacted and precise as distances have been decreased and it less time consuming as deals are getting faster around the world. Evolution of technology has made trade trends and raising questions on international production and volume. Multilateral trade system changes it’s trend as it is being pushed to the new forward blocks and other emerging powers which is creating trouble for US trade hegemony around the world in terms of investment and trade. This results in lacking of progress in trade agreements as world order is changing its trade focus to middle-income emerging powers like China and India which has questioned the international trade hegemony of US around the world. 

Recent developments of free-trade and free-tariffs under the Doha Development agenda has raised difficulties for the industrialisation to less developed countries which are already facing the issues of poverty. Every country along developing country prioritises to multilateral trade system as it has to encounter the poverty reduction and makes policies which give strong financial status and make reciprocal policy for how to make it’s trade strong at international level. This multilateral trade system has raised questions over US economic hegemonic dominancy over the world as every country is seeking it’s ways to enter the international trade (Andrew L. Stoler,2011)

US Trade and Investment Policy

International leadership of United States has been undermined and question is raised for U.S hegemony as it is establishing liberal policy for trade policy. Hegemonic trend has been changed and it has several factors which are responsible for it and major one is openness of world trade to every emerging power whereas U.S has strong implications due to its international financial institutes and its implications. As post war was prosperity era for U.S because it had dominated place and influence over world and its a general perception (Krasner 1976; Goldstein 1981; Lipson 1982). Over the few decades US trade has been doubled due to globalisation perspective and US has major role to appreciate this trend and which has positively affected the US trade policy across the world. United States has strong restrictions in cross border trade and put huge tariffs even on the goods to be used domestically and first government is the largest consumer of the goods this makes the filtration of illegal goods supplied across the border.

United States is a capitalist country and leads this block from front so his policy regarding trade is bilateral or multilateral affairs for trade to the governments, organisations. It promotes the foreign investments and trade inside country to gain maximum capital. Private sector is highly encouraged to invest in country so most of the corporations across the world has given opportunity to invest in United States. United States provides opportunity to international markets and trades to do business according to the rules and regulations of USA. Most of the organisations are attracted to USA because he provides security and safe environment to enterprises which encourage the investment of every kind of positive trade though it can be in bilateral manner or multilateral manner. Bilateral affairs include government to government as the countries do their bilateral trade with United States and supplies huge amount of commodity to USA. Whereas, multilateral trade is actually the large corporations in the world are provided opportunity to make trade agreements and investment in USA. Most of the countries and corporations prioritise United States for its trade and gain their earnings.

United States policies and international trade and investment affect US hegemony.

In 1990s there was a huge collapse of socialism so there need a replacement of this system and needed to be reformed therefore capitalism became the substitute for socialism and new reforms and order was introduced in world at that time which has still strong dominancy over the world. So capitalism arose as the alternative of socialism. As that time capitalism promoted free trade across the world and provided huge opportunities for trade and investment therefore international migration took place and huge number of lower class diverted it’s direction towards the leader of capitalist block like United States who introduced capitalism and promoted trade and private capital investment around the world as they are indicated in Washington consensus. Besides that flow of short-term capital flow resulted stability in region and relationship of United States with Latin region as they had so many agreements on trade and investment this provided both inter relation between two regions and created opportunities for trade and investment. Some emerging powers of world has snatched the US hegemony and economical production for less developed consumers are making their directions towards China and United States is compromising it’s hegemony in-front of China. Subsequently, U.S hegemony is affected in all sectors and economic race is major in today’s era. 

Change in Status Quo of World Order

World order has been changing and this has impacted the status quo or world order. China is producing economical products for under developing countries and consumers are preferring to buy these economical stuff and this has changed the market penetration order as China is penetrating into consumer market  and it has provided huge number of commodities to Indo-Pacific and Latin regions which are the most important markets around the world. US hegemony had strong implications in these regions but by changing the order of world China has replaced US hegemony in most of the markets in world. China has become major trade partner to most of countries if these regions and economies of these countries than the U.S. Besides economy US is also losing his military hegemony as China is producing number of military arms and supplies to number of countries. Over the years bush administration was diverted to wars and had not much attention to western hemisphere some major were not the part of discussions. These major issues like drug trafficking and illegal immigration were the major issues before (Office of the President, The National Security Strategy of the United States of America, March 2006). Most of Latin Americans have mostly rejected the international forums of US backed and this has lacked back the commitments of these regions with U.S markets. 

Globalisation has imposed its marks in every region. US is mostly engaged in militarisation in most of the countries and it has diverted its direction towards the defence sectors. Just like past when United Kingdom and France were most of the time engaged in defence instead of getting stronger in economy. Economy is the most powerful tool for a country to combat the interior matters and problems of a country. Similarly, US is mostly engaged in defence which provided opportunity for emerging powers to follow it’s model and pattern and replace the hegemonic status of USA. China is getting stronger day by day in trade across the world even Indo-Pacific region where it got some rivals but he does not compromise on trade and does not affect trade between these countries. China has imposed its marks almost every market and provide the commodity with reasonable value which is quite affordable for lower classes. On the other side US is mostly engaged in international politics and diverted it’s attentions from economic sector but recent developments of Trump policy of ‘America First’ is totally based on economic dominance as before.

Trump’s ‘America First’ policy is based on trade hegemony of US to world and this policy emphasises that USA should focus on economy, trade and investment instead of engaging into world politics and providing assistance to some countries for countering terrorism. US has been gone through several losses. Besides that China is establishing its own institutions which provide temporary assistance to some countries like IMF and World Bank similarly China has established Asian Development Bank. Apparently it does not seem any danger to hegemonic status of US but it has message that these China oriented institutions are actually competition and challenge to US hegemonic status. Along this organisation China is producing trade corridors across the regions in order to do safe trade and efficient trade throughout the world. Over the decades US had strong hold and influence on the world and this was because of major factors which helped US in hegemonic status of US across the world and neo-liberalism produced enough profit for USA. From the colonised world US gained huge amount of profit and labor and shifted it to place and enjoyed its consistent dominancy over the world in different terms and status quo.