The Contemporary World and Ongoing Challenges - Global Trade

The Contemporary World and Ongoing Challenges HIST 1301 | History Global Trade Global industrialization and economic growth persisted even throughout the Cold War and decolonization. Two notable instances were West Germany and Japan, which were decimated and vanquished in the 1940s. Each threw themselves into the postwar reconstruction activities, which proved to be quite fruitful. Throughout the 1950s and 1960s, they witnessed a meteoric rise in industrial output and economic growth as a result of significant economic investments. Both had emerged as regional economic titans by 1970. There have been smaller-scale economic miracles elsewhere, particularly in Europe. In the 1960s, Spain saw phenomenal expansion spurred by increasing tourist, industry, government support, and foreign technology. Italy got started even earlier. Its annual GDP growth, or the rise in the value of all the commodities and services the nation was generating, peaked at just over 8 percent by the early 1960s. After the war, France saw a population boom and the emergence of an astounding new consumer culture. This culture grew used to a high quality of living and the availability of contemporary amenities like televisions, cars, and home appliances. Greece, the Netherlands, and Belgium all had comparable gains. The advent of regional economic cooperation in Western Europe had a role in the postwar economic expansion. The European Coal and Steel Community (ECSC) was established in 1951, marking the start of the process. West Germany, France, Italy, the Netherlands, Belgium, and Luxembourg were the founding members of the ECSC. These members decided to remove trade barriers by establishing a common market for coal and steel in order to promote economic integration and maintain peace. These goods were free to move between the six nations without any barriers, such as customs charges. The establishment of the European Economic Community (EEC), often known as the Common Market, in 1957 was made possible by the ECSC's eventual success in paving the road for greater economic integration throughout Europe. The European Economic Community (EEC) lifted trade and investment barriers between its member states well beyond coal and steel by utilising the economic-cooperation model that the European Community (ECSC) had devised and considerably enlarged. The EEC's attempts at economic union, while largely successful, occasionally ran into opposition. Farmers who stood to lose financially objected to the opening of national markets to agricultural goods made more cheaply abroad and pushed for protectionist measures. However, the EEC kept growing in spite of these objections and worries. Britain was initially uninterested in the political cooperation that the EEC offered, although supporting the group's economic objectives. Britain requested further exemptions for its Commonwealth ties, such as Canada, and particular safeguards for its agriculture when it did indicate its intention to join. This required holding talks with France, the most potent member of the EEC at the time. France's consent was essential since decisions were taken at the time by unanimous vote, and member nations may veto proposals unilaterally. However, French President Charles de Gaulle disapproved and ended talks with Britain in 1960. Britain formally sought to join the EEC twice during the following few years, in 1961 and 1967. De Gaulle was concerned both times that Britain's deep connections to the United States might cause the organisation to become an Atlantic community under Washington's authority. When de Gaulle was no longer president of France, Britain, Denmark, and Ireland were accepted in 1973. However, many in the UK, particularly those in the Conservative Party, had preferred to remain outside. The UK's membership in the EEC had to be confirmed by a vote in 1975. The European Economic Community (EEC) was merged into the newly formed European Union (EU) in 1993. By 1995, the EU had fifteen members, and by 2022, there were twenty-seven. The idea of the EU was to create a single market for the unrestricted flow of people, money, products, and services. Just as they can work lawfully at home, citizens of EU member states are allowed to migrate and work anywhere in the EU. The EU debuted the euro, its own currency, in 1999. By the beginning of 2002, euro notes and coins—which were previously exclusively accepted for business and financial transactions in eleven EU member states—had become the official form of money in most of these nations. However, not all of the member nations embraced the euro. A few countries, like the UK, Denmark, and Sweden, retained their own currencies. The EU quickly expanded to include numerous Central and Eastern European nations, notably Poland, Hungary, and the Czech Republic, when the euro was adopted. Nevertheless, 52% of British residents voted in favour of leaving the EU in 2016, and on January 31, 2020, the country formally severed its connections with the bloc, which was its biggest commercial partner. A few opponents of the EU in the UK have stated that the organisation diminished British sovereignty and was economically dysfunctional, particularly in the wake of the 2008 crisis. Many also objected to the fact that Britain's EU membership made it simpler for immigrants from other parts of Europe, particularly recent arrivals from the Middle East and Africa, to join the country. Remainers contended that Britain would become poorer and its commerce with Europe would suffer if it left. A few others contended that losing the trade benefits of EU membership may lead to shortages in stores and higher prices for goods. The split, popularly referred to as "Brexit," was far from cordial. Many British supporters of remaining in the EU were stunned by the outcome and called for another referendum, but none was held. The European Parliament, which is the legislative body of the EU, expressed fury about Brexit's potential to undermine the EU project as a whole. The European Parliament wanted the breakup to be as painful as possible for the United Kingdom in order to express its disapproval and maybe discourage any other member states from leaving, and many member nations backed this strong approach. Following Brexit, there are new rules governing British products entering the EU, and British professional licences are no longer automatically recognised in the EU. British nationals now need to apply for visas in order to enter EU nations for extended stays. The desire for greater European independence from the United States was one of the factors propelling European economic union. With the enormous economic and political might the United States gained during World War II, this goal made sense. The United States was the envy of the world not just for its enormous military might with stations spreading throughout Europe and beyond, but also for its booming economy. After going through the Great Depression in the years leading up to the war, the US became a global economic superpower with a highly developed industrial sector. More crucially, it had spared the devastation that Europe and Asia had endured during the war, save from the attack on Pearl Harbour. As a result, American-made goods flooded international markets, and the Marshall Plan was able to offer money to war-torn countries to reconstruct their infrastructure and economy. The United States GDP increased to $543 billion annually (in current amounts) by 1960. With a GDP of $73 billion (in current dollars), the United Kingdom had the second-largest economy in contrast. In the decades following the war, the population's quality of life increased and saw remarkable expansion thanks to the economic strength of the United States. The middle class expanded greatly in the 1950s and 1960s due to easy access to well-paying industrial employment. Customers were keen to utilise their wartime earnings to buy new cars, televisions, home appliances, and suburban houses after their purchasing was restricted during the war years due to the rationing of commodities. With newly obtained union benefits like paid vacation time and weekends off, many were able to enjoy stable work. Additionally, they started sending an increasing number of their kids to college. Approximately 3.6 million young people were enrolled in higher education by 1960, a 140 percent increase over the two decades prior. Higher education served as many people's ticket to the middle or upper classes. The U.S. economy started to contract by the 1970s, in part due to rising international competition and internal inflation. Due to consumer shortages of petrol brought on by oil embargoes imposed by Organisation of the Petroleum Exporting Countries member states in retaliation for US support of Israel in the 1973 Arab-Israeli War and a broader oil-producing nation strategy to raise prices, the economy was further strained. The embargo also had negative effects on other nations that had backed Israel, such the Netherlands. By the end of the 1970s, American manufacturers were facing challenges from Western European and Japanese competitors in virtually major industrial areas, including the manufacturing of cars and steel. This fact caused the US to undergo several challenging economic changes. However, it also inspired a few national leaders to pursue regional international economic union along the same lines as the success of Western Europe. Negotiations to establish a regional free-trade area were initiated by the US and Canada in the 1980s. This made sense because the United States' main economic partner, Canada, also shared a lengthy border with the United States. The Canada-U.S. Free Trade Agreement (Canada-US FTA), which was signed by the two nations in 1988, removed trade restrictions between them. Mexico expressed interest in drafting a comparable free trade pact with the US very quickly. Ronald Reagan, the president of the United States, had proposed the idea in his 1980 campaign. But the Canada-US Free Trade Agreement's successful conclusion persuaded Mexican officials that the timing was right to implement the proposal. In the end, Canada and Mexico signed the North American Free Trade Agreement (NAFTA) at the end of 1992, marking the participation of all three nations in the plan. NAFTA was designed to lower trade obstacles and provide unrestricted commerce in products between the three nations. The deal was accepted by all three nations and entered into force in 1994, despite strong opposition inside the United States, mostly from industrial workers who worried their factories and jobs would be moved to Mexico where wages were much lower. An fundamental change in US policy was brought about by the formation of the Canada-US Free Trade Agreement and then NAFTA. Prioritising the pursuit of allencompassing global accords above restricted regional trade agreements, the nation had mostly shunned them until the early 1980s. The General Agreement on Tariffs and Trade (GATT), which was signed by twenty-three nations in 1947, was the result of such efforts that had started very shortly after World War II. GATT was initially intended to support other postwar economic recovery initiatives. Its goals included lowering trade barriers generally, preventing the resurgence of trade barriers similar to those from the prewar era, and establishing a framework for international trade dispute arbitration. In order to further free trade and foreign investment, GATT has undergone several amendments since it was first accepted in 1947. These adjustments have been carried out in what are known as rounds of negotiations. During the Uruguay Round in 1995, GATT changed its name to the World Trade Organisation (WTO), paving the way for free trade between 123 nations. The WTO's goals were the same as those of GATT: to promote global commerce, lower trade barriers, and settle trade disputes between nations. But the WTO isn't a free trade pact as the GATT is. Instead, it is a body that guarantees commerce amongst WTO members without discrimination. This implies that trade restrictions are permitted as long as they are applied equitably to each member. Many commentators viewed the establishment of the World Trade Organisation (WTO) as a success of globalisation, or the rise of a single, linked world economy. China's entry into the global market system in 2001 was a blatant indication of its integration. Meetings of the World Trade Organisation (WTO) frequently draw protests against corporate dominance and the economic, political, and cultural impact of affluent industrialised nations on less developed ones, since the WTO is seen as a significant factor behind globalisation. A broad coalition of students, labour union officials, environmentalists, and other activists demonstrated against the wrongdoings of globalisation in Seattle, Washington, in 1999. Rubber bullets and tear gas were used by police to confront demonstrators holding marches and sit-ins, and trade negotiations came to an abrupt end. Protesters are still drawn to WTO meetings. The EU and NAFTA are examples of how the ratification of international trade accords such as GATT, which was signed by nations on six continents, did not stop areas from forming their own free trade blocs like MERCOSUR, the trading bloc that was formed in South America in 1991. Moreover, these blocs have not just existed in the West. The most prominent to arise in Asia are the Asia-Pacific Economic Cooperation (APEC) and the Association of Southeast Asian Nations (ASEAN). When Indonesia, Malaysia, the Philippines, Singapore, Thailand, and other countries decided to work together economically to promote regional growth and thwart the spread of communism throughout Asia, ASEAN was born. Due to its general success, the organisation grew to include more nations in the 1980s and 1990s. It was publicly pushing for the establishment of EU-style integration in the region by the early 2000s. When APEC was established in 1989, it was mostly a reaction against the expansion of regional commercial blocs such as the EEC and ASEAN. It was once made up of twelve AsiaPacific nations, which included Australia, the US, South Korea, Singapore, and South Korea. Over time, it has expanded to include more nations including Mexico, China, Chile, and Russia. Among its members, it encourages free trade and global economic cooperation.