By Dike Onwuamaeze
As the heartbeat of global capitalism, the United States’ trade policy is unabashedly in support of free and open trade among nations. For this reason, President Barack Obama’s administration is committed to a trade policy that “provides new opportunities for workers and that supports economic growth by opening markets, enforcing our agreements, and levelling the playing field for our workers.”
The US believes that creating markets around the world for high quality American products and services will generate millions of jobs in its economy and redress income inequality. Data from 2013 shows that every $1 billion in U.S. goods exports supported an estimated 5,400 American job, and every $1 billion of U.S. services exports supported nearly 5,900 U.S. works. In furtherance of this goal, America is in the forefront of strengthening agencies such as the World Trade Organisation and enforcing its resolutions as well engendering negotiations that can eliminate barriers in international trade like the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. Moreover, the United States practises what it preaches abroad at home. With low or no tariffs on the vast majority of products, a transparent and sensible regulatory environment, and an open investment regime, U.S. barriers to imports and investment from abroad are among the lowest in the world.
South Korea is a testimony of how a well thought-out trade policy can change a country’s fortune. 60 years ago, South Korea’s economy was at the same level with most of the poor African and Asian countries. But today, the country is ranked among the most prosperous and most industrialised economies in the world. It is currently the 12th largest economy in the world. South Korea’s transformation from an agrarian and aid-dependent economy to technologically advanced economy is as a result of an adept manipulation of trade policy. It began in the1950s and1960s with a deliberate policy of import restriction that encouraged importation of industrial raw materials and technology that weaned it from dependence on foreign aid to finance its national budget. South Korea later re-directed its trade policy toward export promotion and by 1986 achieved a trade surplus of $4.2 billion. The need to secure export markets for its products and services also encouraged the restructuring of the Korean economy and the decision of Korea to reduce its trade barriers and go for Free Trade Agreement with the United States. The EU has also signed a free trade agreement with South Korea.
The major characteristics of Netherlands trade policy is the openness of its economy. Its trade policy consists of reducing in import tariffs and other trade barriers and the creation of the EU internal market has a significant impact on trade growth. It is believed that trade policy has contributed between six and eight per cent to the growth of national income in Netherlands since the 1970s. The Netherlands liberal trade policy enabled it to enjoy 26 years of uninterrupted economic growth that spanned between 1983 and 2009. It has also encouraged the increasing inflow of foreign direct investments to its economy.
Japan’s difficulties in paying for its imports from 1945 to the mid-1960s provided it with the impetus to tilt its trade policy toward export promotion. It restricted import by subjecting them to government quotas and high tariffs. Japan had two pronged approach toward the attainment of its export-oriented trade policy. The first is the creation of world-class industries that can satisfy local consumption and thrive in the international market. The second was to provide incentives for firms to export. Japan later pursued import liberalisation from the 1960s as a result of external pressure against its protectionism.
Russia has no clearly defined trade policy. This is in spite of its attempt to liberalise its economy since the collapse of the Soviet Union. Russia does not accommodate the underlying principles that promote free trade like the reduction of barriers to global trade. Rather, Russia is more inclined to use its trade policy as a foreign policy instrument to stifle the economies of some former members of the Soviet Union like Ukraine and Lithuania.
The absence of an identifiable policy is also a source of concern to the international community, especially the United States and the European Union. According to Michael Punke, United States Ambassador to WTO, “Russia is perceived as moving increasingly to build walls around its economy, whether through implementing trade restricting measures such as those already mentioned or by adopting import substitution and local content rules that have the same trade restrictive result.”
Although trade has been a very significant factor of China’s booming economy, foreign trade did not account for a large part of the Chinese economy for the first thirty years of the People’s Republic. However, China reversed the Maoist economic development strategy and, by the early 1980s, committed itself to a policy of being more open to the outside world and widening foreign economic relations and trade.
China’s trade liberalisation policy led to the reorganization and decentralization of its foreign trade institutions that not only benefited the Chinese economy but also integrated China into the world economy. China joined a number of international economic organizations, becoming a member of the World Bank, the International Monetary Fund, the Asian Development Bank, the General Agreement on Tariffs and Trade (GATT), and the Multi-Fiber Agreement. China became an observer of GATT in 1982 and formally applied to participate as a full member in July 1986.The result is that today China is the largest exporter in the world.
The trade policy of the United Kingdom is aimed at achieving three core objectives. They are meant to create opportunities for UK business to trade and invest overseas; attract investment to the UK, and lastly, to strengthen international trading links and help developing countries benefit from trade and investment. UK’s trade policy also favours the removal of import inhibitive tariffs. It believes that achieving these goals should increase international opportunities for British trade. According to Gareth Thomas, MP, Minister of State for Trade, Development and Consumer Affairs, the UK’s trade policy positions were meant to foster the benefits of open markets and on how to make the most of those benefits work for the good of both the UK and reduce poverty developing world. “Our ambition is to help create global prosperity and security through open and fair markets.
Similarly, the trade policy of Germany is geared toward the promotion of open markets, especially for its exports. It uses three major channels, which are made up of the country’s 227 diplomatic missions abroad (embassies and consulates), the 125 members of the German Chamber Network (AHKs), delegations and representative offices of the German economy in 85 countries, as well as German Trade and Invest (GtaI), which are present in the world’s most important export markets. These bodies help German companies to access foreign markets and work towards improving overall trading conditions. However, the trade policies of Italy and France are subsumed in the European Union’s policy.
The priorities of Canada’s trade policy are to continue to seek better market access for its agricultural and fisheries sectors, eliminate tariffs on the import of foreign-made good, as well as machinery, aerospace, green technology and other and promote access to Canadian services, including banking and insurance, commercial services, construction and design, education, resource development.
Like most western nations, Canada is interested in the liberalisation of international trade. A trade policy document entitled “Winning in a Changing World: A Canadian Strategy for Emerging Markets,” which was presented to Prime Minister Harper on June 26, this year, advocates for the re-direction of Canada’s trade policy in favour of trading with world’s fastest growing economies.