Introduction
The international political economy is a study that relates to the connection between fiscal and governmental forces. At its center, there have been growing concerns about human welfare and how they are linked to the nation’s behavior and corporate interests in various regions of the globe. Despite these issues, significant approaches in the segment have concentrated substantially on the global system perspective (Lerner 2019). Similarly, two approaches, such as analytical liberalism and neoclassical realism, presently have widespread popularity amongst policy analysts. Both topics accentuate local aspects and how they contrast. Neoclassical is therefore essential to researchers tackling security guidelines, while analytical liberalism dominates studies related to international political economy (Lerner 2019). Therefore, this paper aims to discuss and assess the impacts of international trade, globalization, and free trade on the political influence of specific countries by equating international globalization phenomena with Mark R. Brawley’s realist opinion on the decisions that shape the international economic associations. Furthermore, it intends to analyze the substance and analysis of intercontinental relations.
International Political Economy
Trade openness and its influence on national political influence are researched under the umbrella of international political economy. Before the current study on globalization, politics and economics had been regarded as topics with a distinct perspective on global associations and globalization. Conversely, a growing emphasis on international outlook and interrelatedness of political and fiscal occurrences, such as the launch of OPEC and the Saudi Arabian oil crisis in the previous decades, has contributed to a merger of both studies.
Therefore, international political economy is the study of the interrelatedness of global administration and economy. It is a universally accepted understanding that political reforms and actions are enacted to realize national fiscal advantages. On the other hand, fiscal conditions in a state or area further significantly contribute to the resultant political atmosphere. According to Brawley, international political economy (IPE) is multidisciplinary and can be assessed by focusing on specific contexts such as a regional and focus on a particular country (Brawley 2019). The topic is therefore diverse and contains three basic fundamental principles that classify various IPE studies. First, the political relationship is a substantial means through which economic structures are created and changed in the marketplace. Second, there is a genuine link between local and global level fiscal and administrative assessment, and the two topics cannot be addressed separately. Finally, political and economic aspects are jointly researched and should not be separated.
International Trade
World Trade Organization
World Trade Organization, created in 1995, is a global association that promotes free commerce internationally. Its main goals are to supervise international industry guidelines, organize commerce negotiations, enforce trade agreements, and settle trade disagreements between the member states. However, before its establishment, its predecessor was the General Agreements on Trades and Tariffs (GATT), which was launched in 1943 (Oatley 2019). The main objective of the business body was to control trade tariffs on exported commodities among member countries. Following the Uruguay concession rounds that lasted from 1986-to 1993, the World Trade Organization was created as a multinational organization whose main objective was to liberalize trade (Oatley 2019). In contrast, GATT only comprised tariffs for exported commodities. The WTO has 143 member states and encourages commercial negotiations, and conflict resolution is also employed on services and intellectual assets. The international trade body has presided over 400 trade issues between member countries since its establishment, and such disputes, mainly recorded by the plaintiff country, have instigated judgments that impact the current fiscal policies of specific nations (Oatley 2019). Such actions illustrate the influence of the international society over individual monetary guidelines suppose they are opposed to global commerce.
Recent Growths in International Trade
Since its establishment in 1995, the World Trade Organization has actively pursued some specific regulations, such as transparency, reciprocity, safety acts, binding and enforceable commitments, and non-discrimination among its member countries. Due to its international appreciation and the membership of new economies, such as China, the rules and acts have significantly increased since the organization’s commencement (Oatley 2019). Furthermore, product exports rose by 9 percent, whereas businesses in commercial services increased by 18 percent. China has further emerged as a major export and import economy, and its market share in world trade has continued to progress progressively since joining the organization. The shares of the Asian country in exports and imports in numerous member states have doubled significantly from 2000 to 2005 (Oatley 2019). The growing production of Chinese commodities and its emergence as an international leader in product exportation would not be possible without the trade organization.
Similarly, India and Russia have also opened their boundaries to international commerce due to their membership requirement of the WTO. The move has presented various opportunities for the established nations, such as the United Kingdom and the United States to outsource commercial procedures into the economies and trade corporate services. The prospect for international trade to continuously grow in the future years is therefore significant. Such is aligned to the increasing appreciation of free trade by the traditionally communist-burdened countries.
Traditional Perceptions of International Political Economy
Liberalist View of Global Trade
Liberalism is the administrative perception that backs the lack of national political power and growing fiscal freedom since it actively correlates to higher standards of livelihood, community stability, and peace. Scholars such as Koehane and Katzenstein conclude that the main objective of political, and economic liberalism is to encourage business openness and free trade, and restrict administrative laws in local and global commerce, as opposed to the international relations view expressed by Brawley (Lerner 2019). The scholars further state that liberalism focuses on promoting the free exchange of intellectual assets, commodities, and services, amongst states without the demerits of tariff restrictions and import prohibitions.
Liberalism, therefore, concentrates on the preferences of each country rather than their military or fiscal abilities. Instead of encouraging multinational trade with no state rules, liberals overwhelmingly back the creation of supranational organizations, such as the European Union (EU) and the World Trade Organization, and custom societies among neighboring economies (NAFTA and ASEAN) (Lerner 2019). The inception of these unions and trade groups focus on promoting liberalism by protecting trade discussions, decreasing tariffs, and endorsing unrestricted commerce internationally. Moreover, the emergence and dominance of such groups and societies in the contemporary period significantly enforces the responsibility of liberalism in the international political economy (IPE).
Mark R. Brawley’s Interpretation
As a field within political science, global relations are a mixture of research on diplomatic history and various existing events and international laws. According to the scholar, two factions of idealists who dominated the field have distinct opinions on international relations. The first debate between the two factions had one party tracing the lineage of international relations to the past research on diplomatic accounts, whereas the other proceeded with their investigations from work in global regulations (Brawley 2019). The author states that both parties were interested in the probability of international law. The group that focused on legal research approached the mission by stressing the benefit and utility of international regulations since they influenced individuals’ behaviors. According to Brawley, the researchers concluded that in the absence of laws, nations are compelled to behave differently (Brawley 2019). Therefore, if the laws are created and vary from each other, the individuals can change the way they behave during the trade.
Furthermore, the author believes that since laws guide a person’s behavior, those who make them are inclined to make humans relate in more desirable ways that are suitable for conducting trade. Laws and regulations, therefore, establish better citizens and favorable environments for conducting commercial operations. Therefore, those who emphasized the possibility for multinational acts to create a peaceful international community became identified as the Utopians or idealists (Brawley 2019). Such is linked to their emphasis on perfecting the conduct of people, thus perfecting the behaviors of states during business transactions.
Additionally, the main supposition of classical idealism is that human behavior can be perfected; there exists a harmony of appreciation between states conducting business and the communities. According to Brawley, the concept of classical idealism, therefore, concludes that war is not a suitable method to resolve conflicts; instead, the fundamental coherence of interests should be discovered and stressed (Brawley 2019). Consequently, if appropriate regulations and acts are created to guide the individuals’ actions, there will be a harmony of benefits between individuals and states, especially during the business.
Discussion
Based on the current writings and practical evidence, it can be concluded that the WTO is the proposed international body that oversees the process of exchange amongst its 143 member nations. Consequently, the single authority of every member state promotes mutual arrangements and discussions based on the objective of endorsing free trade. It is indisputable that laws and regulations play a significant role in managing the conduct of individuals. International trade regulations introduced by the WTO have, therefore, promoted cohesion between nations through overseeing successful trade.
Political Power
The growing authority and international acknowledgment of the WTO have significantly reduced the state political influence of each member country and its ability to enforce tariffs and campaign against imported commodities. The laws introduced by the commerce body have further influenced the harmony between the member states (Zeng 2019). The organization has encouraged global trade, thus realizing its mission objectives. Therefore, the capability to manage the economies of the state in an autonomous event is hence centered on the consideration of foreign and domestic political and fiscal aspects.
Social Stability
Relating to social stability, trade openness has resulted in an influx of foreign competitors and companies that require human labor. The opening of the boundaries to international trade in nations without the technological appreciation to produce competitive commodities and services has therefore resulted in social instability whereby labor is limited (Zeng 2019). Therefore, confirming Brawley’s view that international relations create more social uncertainty in developing economies contrary in developed states. For instance, China, upon joining the WTO has experienced a shortfall of agricultural produce and a rise in manufactured products (Zeng 2019). Domestic manufacturers are therefore unable to compete efficiently against foreign businesses. Such has been attributed to the absence of brand awareness to compete effectively in the global marketplaces. Therefore, imposing tariffs and protections is vital for governments to protect their local companies.
Impacts of Trade Openness on the Developing States
A country’s decision to open up its boundaries to free global business has its merits and demerits. One of the advantages, it leads to an increasing volume of foreign direct investments in specific segments within the developing economies. Administrations and local businesses value FDIs since it results in economic development and aggregate state revenue in the nation. They further positively impact infrastructure growth comprising hospitals, roads, and schools (Zeng 2019). Such international ventures also introduce innovations into the market that inclines to boost productivity, thus the competitiveness of the corporations within the developing economy.
Conversely, the opening of borders has impacted trade as promotion of specific businesses such as financial segments and manufacturing, while lacking the backing for non-competitive businesses, such as agriculture (Zeng 2019). The move will result in a diversion of budget funds towards the development of profitable global industries while ignoring sectors that are vital for community welfare and standards of livelihood.
Conclusion
Considering the review of the existing literature outlined in this essay and progressions that have taken place since the establishment of WTO and international laws and regulations, it can be affirmed that trade openness influences the shift in power towards developed economies. Furthermore, these countries comprising China, America, and India usually have technological, socio-cultural, and economical capabilities to compete effectively in the global marketplace. The international laws and regulations that govern humans’ behavior further play a significant role in the success of international trades and relations between economies. The development of world trade laws, therefore, confirms Mark R. Brawley’s research that laws and regulations result in the shift in power between developed and developing economies, thus influencing effective global trade.
References
Brawley, Mark R. 2019. Liberal Leadership. Cornell University Press.
Lerner, Adam B. 2019. “Theorizing Collective Trauma in International Political Economy.” International Studies Review 21 (4): 549–71.
Oatley, Thomas. 2019. “Toward a Political Economy of Complex Interdependence.” European Journal of International Relations 25 (4): 957–78. Web.
Zeng, Ka. 2019. Handbook on the International Political Economy of China. Edward Elgar Publishing.