Pearl Harbour Bombing Case Study
The involvement of the United States of America in global issues had been very passive with more focus on domestic issues and development until the “Pearl Harbour Bombing” of 7th December 1941 which drew it into the second world and thereafter the US-British Staff conference in Washington DC, maintained a leadership role in world economics and political policies. Following several conferences which were mostly joint chaired by Winston Churchill and Franklin D. Roosevelt, the Bretton Woods Conference of July 1944 served as one jeered towards global economic revival and this conference led to the birth of the International Monetary fund and the International Bank for Reconstruction and Infrastructure. These two bodies were primarily mandated
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to help the economies which were devastated by the war to rebuild. According to (Trebilcock and Howse, 1995) the International Trade Organization was part of aforementioned agencies but did not materialise due to US Congress concerns about a loss of sovereignty to the proposed trade body. The World Trade Report (2011) revealed that the countries returned to the provisional GATT agreement that had already been negotiated among 23 parties in 1947 with a mandate of provide the foundation for an expanding multilateral trade system until it was subsumed in 1995. Between 1944 and now, there has been no turning back for the United States in terms of world trade and interactions with other nations.
Trading with other nations require trade agreements which would spell out the regulations and rules for the countries involved must abide. Examples could include tariffs, taxes, subsidies and other duties that constituent countries can impose on their exports and imports. The USA has been in a wide variety of trade agreements since the end of the second world war. However, the evolution of US trade agreements was in 1934 when the Reciprocal Trade Agreements Act was passed. According to Irwin (1998) this legislation (i) granted the president the authority to reach tariff reduction agreements (ii)agreements that did not require congressional approval with foreign countries.
Despite the benefits of trade agreements, most trade agreements have been accompanied by red flags which are worth deliberating upon. According to Baggaley (1998), there had been substantial differences between NAFTA members: The United States is a large trading partner of both Canada and Mexico, but the latter two are almost insignificant trading partners with each other. The current major trade agreements of the United States are the Trans-Pacific Partnership (TPP) with countries of the Asia-Pacific, Transatlantic Trade and Investment Partnership (T-TIP) with the European Union (which has not been started yet though negotiations are still ongoing), a Trade in Services Agreement (TiSA) and a WTO Environmental Goods (EGA) Agreement. It can be noticed that each of these countries do also have production effect on the crops that are major exports crops for the United States, namely wheat, corn and soybean. For instance, Canada and Australia are major forces in global wheat trade, whiles a country like Vietnam is a dominant producer and exporter of rice, mostly being ranked within the top ten traders of rice on annual basis. It is interesting to identify the way the dynamics of these play a role on the production of these crops at state level considering the extent of autonomous production that each state indulges in.
It had also been observed in October 2016 that, total export of goods and service of the USA had decline by 1.8%. Specifically, key agricultural products like corn and soybean had experienced significant declines of $0.5 billion and $1billion respectively. The production and exports of agricultural commodities have been an integral part of the United States economy for ages. This is highly evident with the majority of its universities being started as land grant universities for agricultural research and this had led to massive improvements in the agricultural sector. Despite decreasing percentage contribution due to industrialisation, it still holds a huge place of importance based on its use as the pivot of development for all other sectors. This study as such concerns itself with focus of three key agricultural products; corn, soybean and wheat. Furthermore, it’s an undeniable fact that despite the numerous studies on the impact of FTAs on the United States as a country, practically little or nothing has been done on its impact on individual states within the country.
In attempt to summarize the extent of openness of an economy, the World Economic Forum generated a trade openness index using seven pillars which are merged to produce four sub-indices. This general objective of this study seeks to identify the effects of trade openness of This study therefore seeks to identify effects of the four sub-indices of the trade openness index on the export of selected USA agricultural exports (Wheat, Corn and Soybean).
2.0 Literature Review
2.1 Brief Retrospective of Trade Meetings and Agreements after World War Two
The passing of the Retrospective Trade Agreement in 1934 marked a significant milestone in the history of US trade agreements.
The basis of this agreement was attributed to two main reasons; firstly, the Smooth-Hawley Act of 1931 which raised import duties by 53% and 59% in 1931 and 1932 respectively had led to retaliatory policies by other countries which caused a shrink in world trade, secondly the great depression of the 1930s was severe enough to prevent countries from existing on their own hence the need for coexistence through reliable trade agreements. This trade act served as a precursor for 29 multiple bilateral trade agreements between US and other countries from 1934 to 1947.
According to Irwin (1998), despite the impact of RTAA in changing the process of U.S. trade policy making, it actually had a relatively minor effect on the height of U.S. tariffs. And further explained that the United States experienced major swings in the average ad valorem tariff (tariff revenue as a share of dutiable imports) during this period-from 40 percent in 1929 to 59 percent in 1932 to 14 percent in 1948. In a bid to aid the resuscitation of the European Countries disrupted by the war, the US signed the General Agreement on Tariffs and Trade. By that time, the significance of the RTAs had declined. The GATT was a trade setting based on multilateral trade
agreements.
to help the economies which were devastated by the war to rebuild. According to (Trebilcock and Howse, 1995) the International Trade Organization was part of aforementioned agencies but did not materialise due to US Congress concerns about a loss of sovereignty to the proposed trade body. The World Trade Report (2011) revealed that the countries returned to the provisional GATT agreement that had already been negotiated among 23 parties in 1947 with a mandate of provide the foundation for an expanding multilateral trade system until it was subsumed in 1995. Between 1944 and now, there has been no turning back for the United States in terms of world trade and interactions with other nations.
Trading with other nations require trade agreements which would spell out the regulations and rules for the countries involved must abide. Examples could include tariffs, taxes, subsidies and other duties that constituent countries can impose on their exports and imports. The USA has been in a wide variety of trade agreements since the end of the second world war. However, the evolution of US trade agreements was in 1934 when the Reciprocal Trade Agreements Act was passed. According to Irwin (1998) this legislation (i) granted the president the authority to reach tariff reduction agreements (ii)agreements that did not require congressional approval with foreign countries.
Despite the benefits of trade agreements, most trade agreements have been accompanied by red flags which are worth deliberating upon. According to Baggaley (1998), there had been substantial differences between NAFTA members: The United States is a large trading partner of both Canada and Mexico, but the latter two are almost insignificant trading partners with each other. The current major trade agreements of the United States are the Trans-Pacific Partnership (TPP) with countries of the Asia-Pacific, Transatlantic Trade and Investment Partnership (T-TIP) with the European Union (which has not been started yet though negotiations are still ongoing), a Trade in Services Agreement (TiSA) and a WTO Environmental Goods (EGA) Agreement. It can be noticed that each of these countries do also have production effect on the crops that are major exports crops for the United States, namely wheat, corn and soybean. For instance, Canada and Australia are major forces in global wheat trade, whiles a country like Vietnam is a dominant producer and exporter of rice, mostly being ranked within the top ten traders of rice on annual basis. It is interesting to identify the way the dynamics of these play a role on the production of these crops at state level considering the extent of autonomous production that each state indulges in.
It had also been observed in October 2016 that, total export of goods and service of the USA had decline by 1.8%. Specifically, key agricultural products like corn and soybean had experienced significant declines of $0.5 billion and $1billion respectively. The production and exports of agricultural commodities have been an integral part of the United States economy for ages. This is highly evident with the majority of its universities being started as land grant universities for agricultural research and this had led to massive improvements in the agricultural sector. Despite decreasing percentage contribution due to industrialisation, it still holds a huge place of importance based on its use as the pivot of development for all other sectors. This study as such concerns itself with focus of three key agricultural products; corn, soybean and wheat. Furthermore, it’s an undeniable fact that despite the numerous studies on the impact of FTAs on the United States as a country, practically little or nothing has been done on its impact on individual states within the country.
In attempt to summarize the extent of openness of an economy, the World Economic Forum generated a trade openness index using seven pillars which are merged to produce four sub-indices. This general objective of this study seeks to identify the effects of trade openness of This study therefore seeks to identify effects of the four sub-indices of the trade openness index on the export of selected USA agricultural exports (Wheat, Corn and Soybean).
2.0 Literature Review
2.1 Brief Retrospective of Trade Meetings and Agreements after World War Two
The passing of the Retrospective Trade Agreement in 1934 marked a significant milestone in the history of US trade agreements.
The basis of this agreement was attributed to two main reasons; firstly, the Smooth-Hawley Act of 1931 which raised import duties by 53% and 59% in 1931 and 1932 respectively had led to retaliatory policies by other countries which caused a shrink in world trade, secondly the great depression of the 1930s was severe enough to prevent countries from existing on their own hence the need for coexistence through reliable trade agreements. This trade act served as a precursor for 29 multiple bilateral trade agreements between US and other countries from 1934 to 1947.
According to Irwin (1998), despite the impact of RTAA in changing the process of U.S. trade policy making, it actually had a relatively minor effect on the height of U.S. tariffs. And further explained that the United States experienced major swings in the average ad valorem tariff (tariff revenue as a share of dutiable imports) during this period-from 40 percent in 1929 to 59 percent in 1932 to 14 percent in 1948. In a bid to aid the resuscitation of the European Countries disrupted by the war, the US signed the General Agreement on Tariffs and Trade. By that time, the significance of the RTAs had declined. The GATT was a trade setting based on multilateral trade
agreements.