Multicultural Trade Agreements’ Legal Effects on International Trade

China’s Island Conflicts and American Involvement

China first raised island conflicts with the United States of America in 1971. The purpose of the contentious exchange was to force the United States to “hand over” the territory owned by China. (Noe et al., 2006). The assertions made by scholars that the islands were on Chinese soil and that the areas under consideration were the shipping lanes and fishing grounds had a significant impact on the situation. In addition, a number of speculators assert that there may be some oil reserves close. Japan made a move that made it clear that they were supporting Chinese military dominance of the region to the fullest extent possible. Rather than having the war between the nations, they should attain the solution amicably, following the outlined guidelines stipulated within the documented agreements. When President Obama visited Japan in the year 2014, April, he concisely articulated the commitment of the U.S.A to Japan together with its Asia partners. President Obama made a declaration that the Islands of Senkaku/Diaoyu are enshrined within Article 5 of the security treaty with Japan and US. Section 5 of this treaty outlines that the two states shall act towards meeting a common threat concerning an assault against “areas that are under the Japan administration” (Rauch & Trindade, 2002). Hardly ever does government of the US take on territorial disputes; therefore, the declaration was the U.S.A.-Japan testimony regarding camaraderie with the relations concerning security issues (Rauch & Trindade, 2002).

The Economic Significance of the TPP Agreement

A TPP agreement, therefore, shall be standing for 37.5 percent of the global GDP together with the 25.6 percent of the every global trade (Rauch & Trindade, 2002). When everything is in order, the region of Pacific Asia is predicted to be the subsequent worldwide area where there would be essential economic development globally. By the year 2030, the population of Pacific Asia is predicted to augment up to 175 million people. The states in East Asia are predicted to exceed the North Atlantic Free Trade Agreement (NAFTA) as well as the Euro Zones in becoming a leading trading block in the globe.

Benefits for Asia and the US

As seen from the above points, it is unarguable that Asia shall significantly benefit from the agreement of the TPP. The benefits are economically apparent as well as an influence on the area and provide the needed security towards stabilizing the region. Presently, there exist approximately 320,000 US troops within the areas. Besides, it is approximated that 62 percent of the entire U.S. naval capacity shall be living in a zone reaching the year 2020 (Noe et al., 2006). An increase in the supply of the US troops in the region is an attempt to curb the entry of the Chinese in the same area. For either case, Asia-Pacific is on the brink of success. Besides, the future consensus of the region is undoubtedly positive. An agreement on the TPP shall be the primary foundation for economic growth as well as enhanced associations with the U.S.A.

Advantages for US Firms

Evidently, the deal is offering various advantages for the US firms too. For example, Malaysia and US partnership will be strengthened owing to past and anticipated economic growth within the country. U.S.A is deemed to be the biggest importers in Malaysia with exports from America to Malaysia attaining a higher record of approximately $18 Billion during the year 2010. In the year 2012, America’s largest exports majorly composed of machinery ($7.2 billion), iron and steel ($364 million), aircraft ($1.2 billion) as well as agricultural products (Noe et al., 2006). Caterpillar, a US company with its huge presence in Asia, has the responsibility of doing major exports of machinery. Additionally, the manufacturers of the motor vehicles are anticipated to similarly make out augmented sales that are coming as result of TPP agreement. Ford and General Motors were merely responsible for the one percent of total passenger cars registered in Japan in the year 2014 (Noe et al., 2006). Thus, the TPP agreement creates the largest changes in support of the export firms to increase their level of sales.

Concerns and Criticisms of Free Trade Agreements

It is worth noting that all the trade agreements ought to cover various features that are required by laws. The foreign policy applied in most of the trade agreements has different implications domestically. The “Asia-Pacific Pivot” and the TPP act well for China and the US. As was the case with NAFTA, most of the Americans have a belief that TPP together with other trade agreements, on the whole, shall bear adverse effects on manufacturers and retailers from the US. Most of the people who are opposing the TPP propose that the trade agreement shall permit Multi-National Corporations (MCNs) from every state member of the governments the duty of overturning local as well as national bylaws. Legal accomplishments such as these might with time restrict profits meant for the various businesses that are fully done. Also, the agreements on free trade might similarly bear negative ramifications when it comes to the labor rights. Predominantly, most of the transactions made on the free trade are usually short of enforceable labor fortifications. Grievances which are lodged at most of the International Labor Organization (ILO) are targeting national governments to abide by the standards of labor standards globally. The complaints are being brought about even if the ministries of national labor are meeting their responsibilities towards efficiently enforcing the laws on labor (Noe et al., 2006). Occasionally, most of the companies are moving highly paying professions to foreign states which are deemed to be having lower wage rates. The agreements on trade similarly permit companies to disarm the drives of unionization through putting threats of moving jobs from states where there are widespread labor strikes.

Trade Agreements Effects on Foreign and Domestic Market

Admittedly, lower cost of labor is an incentive meant for companies to shuffle the facilities for production abroad to increase the profit base of such firms. Most of the workers from American companies are being laid off when businesses are relocated, whereas some of the workers are being oppressed by the lower wages that are being charged by companies. As firms are turning out to be multinational, whether they are producing within American region is unrelated to company’s top managers together with the investors. As Noe et al. (2006) assert, the trade agreements provide international companies with the chance towards outsourcing production in support of the USA marketplaces.

Impacts on Immigration and Labor Rights

For the time being, there are some legal issues which are supposed to be resolved. Thus, this shall be made complex through various free trade agreements such as TPP. The other example of the trade agreement is based on people’s immigration, which is affecting people entering the USA. Just as the citizens of US are typically eagerly waiting for comprehensive immigration reforms, several individuals who are opposed free trade agreements are questioning ways in which such reforms will have various impacts on undocumented employees. The time NAFTA was devised, its enthusiasts persisted that the economy of Mexico will be growing to the extent that it would be generating more competitive employment opportunities, thus, trimming down immigration incentives. Provided the contemporary heated debate concerning immigration issues, it appears that the deal did not materialize.

Legal Challenges and Disputes

When the tariffs were trimmed down in support of NAFTA, the government of U.S.A offered larger subsidies for the farmers hailing from America. This act permitted the American farmers to destabilize Mexican farmers through exporting agricultural products hugely at incredibly lower prices. As a result, the farmers from Mexico got an encouragement of migrating to North America thus becoming undocumented employees (Iredale, 2005). Also, big companies such as Wal-Mart took advantage of the lowered tariffs as well as the permission to the entry into Mexican markets. Several workers from Mexico were relocated since most of their businesses were compelled shut down. In the long run, most of the relocated workers were similarly forced to shift northwards just like the American employees. Therefore, the Mexican farmers turned out to be undocumented America workers. Exclusive of immigration reforms, this cycle might go on thus encouraging illegal immigrants into the country. Occasionally, the legal languages concerning the agreements on free trade might never be explicit since they might be required to be otherwise might be misconstrued simultaneously.

Benefits and Challenges of Multicultural Trade Agreements

From the European viewpoint, multicultural trade agreements have always assisted in opening ways for different countries in the continent to sell their products in both local and foreign markets through control of tariffs and quotas as well as regulations which legalize specific trades instead of just accepting all. Multicultural trade agreements improve the quality of foreign trade through the imposition of regulations and rules by the various cultures which attempt to bring sanity by illustrating the type of goods and services allowed in a given country. Additionally, it helps in controlling when the foreign goods and services are expected in a particular country. Trade has also facilitated the establishment of general trade regulations in the global arena which is accepted by all the countries that are willing to participate in world trade.

The Complexity and Importance of Trade Disputes

In Canadian Lumber Trade Alliance v. U.S., 517 F.3d 1319, 1327 case, the producers from Canada took a legal action for the US within the International Trade Court (Iredale, 2005). The producers were claiming that since Continued Dumping and Subsidy Offset Act (CDSOA) is not specifying that it applies to commodities that are coming from NAFTA nations, it ought to be interpreted that it is never applicable for various products from the NAFTA states. A judgment was passed in support of the producers from Canadian. The International Trade Court made a declaration that, following the Section 408 of the NIA, the CDSOA is not applicable to countervailing and antidumping duties evaluated on goods that are imported Mexico or rather Canada (Iredale, 2005). The case certainly is an instance of how precise and complicated language might be misunderstood thus causing the issues of a global dispute over negligible comprehensions.

Implications of Labeling Laws on Free Trade

In various cases, the producers from U.S.A filed legal cases in opposition to U.S. trade associates. A recognized evidence implicated farmers of catfish. The government of US supported producers of catfish in the country since the growth of catfish import in Vietnam was overwhelming for the manufacturers of domestic catfish. The catfish from Vietnam was comparable in taste to those from the US even though much cheaper. Preferably, the government of the USA might have discontinued the importation of catfish from Vietnam but the pronouncement importing catfish from Vietnam within the first place was as result of the global trade agreement. In an attempt of becoming a component of global trade marketplace, Vietnam became part of the company economic collaboration that was involved in reducing both the tariff and non-tariff obstacle amongst its twenty-one member’s economies within Asia–Pacific area as well as Asia-Pacific Economic Cooperation (APEC) in 1998. Almost immediately to follow was the Bilateral Trade Agreement (BTA) signing between Vietnam and US during the year 2001 (Iredale, 2005). Bilateral Trade Agreement generated several opportunities in support of fish farmers in Vietnam.

Impact of Free Trade Agreements on Domestic Industries

As indicated in the above graph, from the year 1997, the fisheries of USA were out-produced by their counterparts in Vietnam. During 1998 and 2000, it was later acknowledged like pre-stages meant for the “catfish war.” In November 2001, the US struck through ensuring that law was passed which limited the use of “Catfish” name merely to some Ictaluruspunctatus family that is substantially known by the entire US population. Besides, the catfish from Vietnamese was labeled like “try” otherwise “basa” (Cateora, 2008). “Food labeling ensures fair competition among producers, increases consumers’ access to information and reduces risks to individual consumer safety and health” (Cateora, 2008). Similarly, it is a helpful method meant for the clients towards distinguishing between the qualities of the product produced from the catfish.

Insights on Free Trade Agreements

The US government provided massive support to US fisheries owing to the fact the government was having an obligation of ensuring the practices of fair competitive meant for its producers domestically. This act happened at the times when the importers made threats to their capabilities of conducting business within various markets domestically. Like the Non-Tariff Barrier (NTB), the labeling laws on catfish effectively worked for the fisheries in the US NTB stands for organizational guidelines, policies as well as procedures which are described as qualitative and quantitative barriers. Non- Tariff Barrier directly or indirectly obstructs international trade within various countries (Cateora, 2008). In an ideal world, there are some instances where the US government has backed domestic firms regardless of their trade agreements.

The Importance of Transparency in Trade Agreements

The other issue which is plaguing the agreements on free trade is certainly the insufficient transparency. Such arrangements are usually negotiated for many years thus having broad impacts on the citizens of a particular nation. However, most of the citizens are lacking say concerning the terms and conditions of the agreement. Furthermore, citizens are similarly not informed of the agreement details. On the other hand, agreements on a multilateral free trade together with the negotiations for investment are addressing a wider range of the regularly composite and commercially susceptible segments within various ministries of the country. So as to attain agreements, which every participant government may wholly accept the need of negotiators to stay in touch with one another who are having a higher level of truthfulness, inventiveness together with joint conviction (Cateora, 2008). Scores of crusaders against the agreements of TPP are demanding that the text negotiation should be made public. At the same time as trust and candor are essential, the significant intent is supposed to be of the citizens’ interest of particular state members.

Advantages of Free Trade Agreements for the Global Economy

The agreements on a free trade together with the business system on multinational are pertinent for the global economy and have been established to be advantageous in due course. WTO statistics indicate that in the year 2013, there were some 575 notifications concerning the agreements of regional trade had been attained by the business organization. Out of these notifications, 379 were in operations. Each WTO member is be owned by 13 several agreements on the preferential trade approximately (Czinkota & Ronkainen, 2013). For the larger scale, most of the agreements on free trade entail smaller economies alongside assisting in making such economies to be exposed to various economic developments. When victorious, then the whole international economy might have benefits too.

Conclusion

Even though the agreements on multinational free trade are multifaceted as well as profoundly weighted having legalities which shall indisputably lead to global disputes. In this case, a global trade system shall be having within a longer period. Historically, it has been proved that better interconnectivity that most of the countries are having might lead to greater economically feasible as well as the world, which is peaceful. In most cases, in most of the agreement in support of free trade are having huge influences on the ways in which business is being carried out globally. Whereas such impacts might seem to set hurdles on already multifaceted worldwide legal systems additionally, the trade agreements impact shall be helpful. There is no country; however large or small, poor or rich that can survive when there is no appropriate partnership with other nations. The future foreshadows that just like the global community has been growing bigger, the globe shall necessarily turn out to be more intimately united.

The Importance of the Next Trade Agreements

The next trade agreements between the US, the Asia Pacific border nations and the Euro Zone will significantly strengthen the US economy. Besides, this is offering opportunities in support of domestic companies to grow, make profits as well as ultimately securing peace. Whereas global law shall be influenced, the agreements on free trade impact shall augment international trade. Additionally, the free trade agreements will enhance the interactions between the different nations and assist in the establishment and massive growth of the trade system globally.

References

Cateora, P. R. (2008). International Marketing 13E (Sie). Tata McGraw-Hill Education.

Czinkota, M. R., & Ronkainen, I. A. (2013). International marketing. Cengage Learning.

Iredale, R. (2005). Gender, immigration policies and accreditation: Valuing the skills of professional women migrants. Geoforum, 36(2), 155-166.

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2006). Human resource management: Gaining a competitive advantage.

Rauch, J. E., & Trindade, V. (2002). Ethnic Chinese networks in international trade. Review of Economics and Statistics, 84(1), 116-130.