International Relations And The Global Economy - Essay Example

Running header: International Relations Student’s name: Instructor’s name: Subject code: Date of submission: Why multilateralism became a hallmark of international economic relations after 1945 International economic relations and hence international trade has rapidly grown since 1945 after the end of World War II. This has seen the number of exports by countries increase by 6 percent annually since 1950 to a value of $7.6 trillion by 2000 according to Johann (2008). In fact, the value of international trade has grown consistently more rapidly than the world economic output. This unprecedented expansion in international economic relations since 1945 is largely a product of multilateralism. Multilateralism is about multiple countries working together on certain issues and has been defined as international governance of the many. As such, most international organisations such as the world trade organization, the UN and other regional bodies are multilateral in nature. By coming together, the countries are able to address issues that affect them and remove barriers to trade that may hinder international trade. It is no doubt that multilateralism became the hallmark of international economic relations after 1945 due to the emergence of multilateral organisations that were aimed at improving international relations and hence avert any crisis that could lead to further hostilities between nations. This essay explains why multilateralism became a hallmark of international economic relations since 1945. After world war II, there was need to correct the problems arising from protectionism and trade restrictions that had been imposed between the world wars (Francis, 2005). This saw the emergence of multilateral trade agreements and international economic corporations which eventually lead to the establishment of multilateral organisations such as the general agreement on tariffs and trade in 1947 by 23 countries that controlled four fifths of the world trade. The establishment of the organisations helped boost international economic relations in a number of ways. First, the organisation helped improve relations between the member countries. This was essential in ensuring smooth flow of goods and services between the nations and hence to some extent, this led to improvement of economic relations and hence trade between nations. Secondly, the multilateral organisations came up with principles which would guide the members on a reciprocity and mutual advantage basis (Miles, 2002). This would result in substantial reduction in various impediments to trade as well as reduction in custom tariffs. Furthermore, they would lead to elimination of discriminatory trade practices in the international front. It should be noted that GATT was replaced by the world trade organisation (WTO) with the aim of supervising and liberalizing world trade. This way, the level of international economic relations greatly improved especially as more and more countries became members. Furthermore, the multilateral organisations hold regular meetings to resolve any problems that might stand on the way of international economic relations. The establishment of the organisation for economic corporation and development also went a long way in boosting international economic relations. The multilateral organisation had the aim of fostering free trade between signatories in addition to allowing them participate in custom unions and similar organisations. The organisation achieved much in facilitating recovery of intra-European trade through abolition of many quantitative restrictions on international trade. Other aims of the organisation was promotion of economic growth of members, contributing to economic growth of less developed countries and fostering of world trade on a multilateral non discriminatory basis. Thus, the growth of such multilateral organisations made trade between nations easier by boosting international economic relations. Multilateralism has also seen the rise of various forms of economic integrations which may include preferential tariffs, customs unions, free trade associations, economic unions, common markets as well as full economic integration (Emirhan, 2012). All these forms of economic integrations have greatly boosted international economic relations through preferential trade of members which to some extent may also include free trade between members. Conclusion Prior to 1945, there was hostility in international economic relationships characterized by various barriers including protectionist policies which hindered trade between nations. However, the period after 1945 saw the rapid establishment of multilateralism. Multilateralism led to reduction in protectionist policies and hostilities between nations. Furthermore, trade barriers were reduced and terms of trade improved. The improved relations is largely attributed to the rise of such multilateral organisations as the united nations organisation, GATT, WTO and other forms of economic integrations. This way multilateralism helped improve international economic relations. Multilateralism indeed has been and continues to be the hallmark of international economic relations as it has created a platform through which nations overcome barriers between them and while providing better terms for economic relations. References: Emirhan, Y2012, Regional multilateralism, London, Rutledge. Francis, T2005, Multilateralism: International economic relations since 1945, Oxford, Oxford University Press. Johann, K2008, Contemporary issues in international economic relations, International Economic Journal, vol.56, no.2, pp.65-72. Miles, K2002, Multilateralism with small and large numbers, International organisation, vol.46, no. 3, pp. 681. ‘China does not present a model for economic success that can be followed by other developing states. Its circumstances are unique and cannot be emulated.’ When china announced an economic growth rate of 7.6%, this was analysed as an economic slowdown. This clearly illustrates the difference between China and other world economies in that such a growth rate would have been considered a blistering economic growth in any other economy. In fact, china’s economy is one of the fastest growing economies in the world. While many believe that strong economic fundamentals such as abundant savings, huge domestic markets as well as labour surplus are responsible for china’s economic success, it is also believed that the nature of the Chinese economic model is a unique case that is highly authoritative. In fact, the model is described as one that is only concerned with economic growth while ignoring the people’s political and human rights (Chen, 2002). The model although resulting in high levels of economic growth has been blamed for enriching a few rich while leaving the poor to get poorer. This being the case, can china’s present economic success model be followed by other developing states? This essay argues that although the model is unique with numerous negative aspects, there are some positive aspects that developing states can emulate in stimulating their economies. As such, the model should not be ignored in totality. China’s economic success model is based on a strong authoritarian state that makes use of capitalism in wealth creation. Its major characteristics include a muscular hand of the state that controls almost all aspects of trade which allows no political liberalization. In fact, the ruling communist party has a very big say on the economy and trade. However, there are some aspects of china’s economic success model that developing countries should copy. For instance, there is need to modernize various sectors of their economies just like china did (Cohen, 2005). In addition, there is need to open up their economies to foreign investors while providing adequate labor to the investors. By so doing, such countries will be on a path of economic growth. It should however be noted having authoritarian form of government controlling trade might not work in the developing countries may not work. Suppressing people’s political and human rights just like in china may prove to be detrimental to the developing country’s economies. This is because there will be political tensions and uprisings that will disrupt peace and hence bring the developing economies down. It should be noted that the many faults that the china’s model has makes it unsuitable for emulation by other developing nations. The model if emulated may result in numerous social and political problems. For instance, with no accountability, an authoritarian state will often make quick decisions that may have high economic and environmental costs. Such a model is also likely to lead to corrupt capitalism where power and money rules. Ordinary people’s rights will be infringed upon and arbitrary acquisitions become prevalent. In addition, workers will have to endure unsafe conditions and long working hours (Crain, 2002). This conditions that do not recognize human rights will cause discontent within the economic community and the labor supply which is likely to send the developing economies crippling. It should also be noted that a Chinese model would lead to unequal income distribution in the developing economies .china has the most unequal income distribution in the world. This has been worsened by its dismantling the social welfare structures which has left millions of people without provision of healthcare and unemployment insurance. If this was to happen in the developing states, there will be social unrest and political instability thus threatening the economies. Conclusion As has been explained above, the developing states should not ignore the Chinese model in totality. There is need to open up their economies to foreign investment , provide adequate labour supply, modernize their economies while promoting innovation just as china did in their attempt to develop their economies. However, there should be no attempts to suppress civil or political rights. As is the case, most developing countries are democracies unlike china. Any attempts to suppress people’s rights and freedoms will be met with resistance (Rowan, 2011). This is likely to lead to political instability which is not conducive for economic development. As such, I am of the opinion that despite the fact that the china’s economic model has led to its economic success, it can not be emulated in totality by other developing nations. China does not present a model for economic success that can be followed by other developing states. Its circumstances are unique and cannot be emulated by democratic states. It can only be applied in developing nations that have political structures similar to those of china. References: Chen, A2002, Capitalist development, Entrepreneurial class and democratization in China, Political Science Quarterly, vol. 117, pp.5. Cohen,Y2005, The impact of Bureaucratic- Authoritarian Rule on Economic Growth, Comparative Political Studies, vol. 50, no. 2, pp.12-15. Crain, M2002, Institutional distortions, Economic freedom and Growth, Cato Journal, vol.21, pp.3. Rowan, C2011, The China model, International Economic Journal, vol.82, no.2, pp.85-88. Read More