Question

Consider how trade agreements and Trump's preference for bilateral agreements might influence the global marketplace - how they might work, what might be roadblocks, and how it benefits the parties. 300 words

Answer 1

A bilateral trade agreement confers favored trading status between two nations. By giving them access to each other's markets, it increases trade and economic growth. The terms of the agreement standardize business operations and level the playing field. Among the many changes Donald Trump is bringing to American trade policy, the new president has made clear that he believes bilateral trade deals are better than regional or multilateral agreements.

Trump’s embrace of bilateral negotiations is borne out of his understanding of the global economy as a zero-sum conflict. From this starting point, it follows that the key question in assessing any trade deal is not whether it creates overall economic gains, but how its benefits are distributed between countries.

Reducing the US trade deficit, making more aggressive use of trade remedies, and tackling perceived unfair practices will be key pillars of Trump’s policy. And given his preference for bilateral deals, the outlook for current negotiations with the EU and on the Trade in Services Agreement is uncertain.

During Trump’s early months in office, the sole definitive action on trade was the decision to withdraw from the Trans pacific partnership. He did not, as promised during the campaign, designate China a currency manipulator on ‘day one’; nor did he take any action to impose across-the-board tariffs on imports from China and Mexico. He signed a number of trade-related executive orders, mostly to commission the study of the source and consequences of perceived problems such as the US’s bilateral trade deficits or violations of trade agreements by partners abroad, but the deadlines for reports have so far been missed. The NAFTA renegotiation is now notably under way. But it remains to be seen how different US trade policy will be as a result of these initiatives.

Concluding that If a new trade policy framework can be developed, then Trump’s presidency could offer a chance to move the debate forward and actually strengthen global trade.