It seems that the end of the empire of American power has come, and in fact this is one of the issues that Trump acknowledged after the announcement of the results of the presidential election. Trump has predicted that under the Biden administration, China will absorb all of America’s economic power. Now that part of that prediction has come true. China and 14 other Asian countries have the largest free trade agreement in the world. The parties will sign the document at the ASEAN summit on November 12-15. Be with Artan Press to explain this trade agreement.
Trade tariffs on exports and imports were one of the most important challenges of the Trump era, with extensive consultations in world trade having many problems. All the developed countries were affected in some way by this issue, and practically part of the world trade deficit and the great recession is due to the direct and indirect US trade war in world trade.
*** The end of the Trump era, the beginning of international trade
With the end of the Trump era in the United States, developed countries are now thinking of a documented solution so that they can launch their trade exchanges more quickly and with new rules, so that supply chain costs are minimized. This global synergy is happening for the first time in the world, and practically the absence of the United States in this agreement has very deep meanings. Countries from Japan to Australia and New Zealand with a population of 2.2 billion will participate in the agreement. The agreement aims to reduce customs duties, strengthen export chains using uniform rules to determine the country of origin of goods, and systematize new rules for e-commerce.
*** American isolation in economic equations
Developed countries are expected to solve their economic problems through a channel other than the US. The implementation of this agreement could severely hit American and other multinational corporations. The loss comes in the wake of President Donald Trump’s signing of a 2017 document on Washington’s withdrawal from the Pacific Partnership or Trans-Pacific Partnership (TPP), which was to create a Free Trade Area in Asia-Pacific. It will be felt.
*** China’s influence in the world’s economic pillars
In practice, China’s influence in the world economy will increase unimaginably, and the United States can no longer have a mechanism to control China’s economic activities. Is the world.
In this regard, Bloomberg has raised the possibility of China’s economic domination of the United States, because with the occurrence of this free trade agreement, China can easily compensate for its production surplus and trade surplus, and in practice has turned the threat of commodity accumulation into wealth. If we look at China’s economic performance in 2020, it is very clear that it is the only country that has experienced positive economic growth this year and has been able to steal the ball from the United States. .
*** Europe’s accession to the Free Trade Agreement
The United States, the world’s largest trading partner, is also keen to change the world trade system and has a strong desire to reform the structure of world trade. New agreements by other countries will pose many challenges for American exporters, and the continuation of new trade legislation may make the opportunity more inaccessible to Americans.
*** US Internal Problems
The corona virus has created a situation in the United States where the country is currently very focused on its internal affairs. With the unexpected events in the results of the US presidential election, the atmosphere for this country has changed drastically and this position has become an opportunity for a country. Like China to get the most out of this situation.
*** The Biden government’s policy on the free trade agreement
The Biden administration’s economic policy is not yet clear to many analysts. It is unclear how Biden’s team will approach trade agreements and whether the United States will return to the Pacific Trade Agreement (TPP). An issue that is likely to occur is the Biden government’s short-term inaction on the agreement, as more important issues such as the control of the Corona virus and the Paris Environmental Agreement are before his government. And in practice, this provides the space for China to grow as much as possible over the next six months.
*** Democrats and Republicans are both on the same team
The Pacific Free Trade Agreement is one of the most controversial issues in the United States and has been debated in the United States. What will be the free trade agreement? This is certainly not one of Biden’s top priorities, and as a result we will see China make the most of it to attract American target markets.
*** The clear message of the Free Trade Agreement
The signing of a free trade agreement between the developed countries of the world sends a clear message to the world and the US government. The message is that other large developed countries are not ready to accept the sometimes dictatorial demands of the United States to control the flow of world trade and will not wait for dictatorial action at all. This m The situation could signal the beginning of a decline in US economic power.
*** Economic record of free trade agreement partners
It is enough to take a look at the economic record of the participating countries in this economic summit. In total, the performance record of this economic bloc includes about one third of the GDP and population of the world. The Free Trade Agreement will be the first free trade agreement to include China, Japan and South Korea as Asia’s first, second and fourth largest economies.
*** India; The Cursor of American Hope
But the point of hope for the United States for the non-effectiveness of this trade agreement was the withdrawal of the treaty for its own economic reasons. India, one of the top 10 partners, announced a month before the initial signing of the MoU that for specific economic reasons and concerns about China’s opening up to the market and the possibility of increasing its trade deficit with China in the negotiations. Will not.
*** Free Trade Agreement Planning
The initial draft of this economic partnership started about 9 years ago and this plan was practically overhauled. The initial draft stated that the signatory countries of this memorandum will accept that within twenty years, a maximum of 90% of the import tariff between the countries. Remove the member and follow the path of free trade with this approach.
*** Growth of shares of Asian and Australian companies
With the signing of this agreement, the first signals of stock growth were observed in the member countries. Shares of Asian and Pacific industries and companies rose earlier this week as the world’s largest free trade agreement was signed yesterday. In the foreign exchange market, Asian currencies strengthened against the dollar. This growth of foreign currencies against the dollar may benefit these countries in the short term, but it is unlikely that China will welcome this.
*** China’s policy in strengthening the yuan
If we want to point out why China does not want to strengthen the value of the national currency against the dollar, we must say that the cost of Chinese goods will rise with the appreciation of the yuan against the dollar for destination countries, and in fact this is the attractiveness of the Chinese commodity market. But the strengthening of the yuan against the dollar will send a clear message to the United States, and this message is nothing but China’s dominance of the world financial market. It remains to be seen what the outcome of the Biden administration’s efforts to counter the Chinese incessant attack on the American market will be.
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