International Economic Policy

The book reviewed in this essay, International Economic Policy in the 1990s, was to focus on some of the most recent concerns about international trade. Its author, William R. cline, seems to have some good insights about the topic as it seems that he researched, taught and lectured about this field of study. The author tried to be as objective as possible and tried not to be biased by referring to the different opinions about most of the issues he handled. However, as it is really impossible to be totally unbiased, some biases were to exist due to their necessity to form an argument. Furthermore, other biases can be detected through his writings by remarking the aspects of international trade that he examined, versus those he gave very small or no weight at all. There are many issues related to international trade that one can study, however as it is usually the case, this book was to examine only some of them. The author, in some parts of his book, was to concentrate on the question of adjusting the US trade deficit against with Japan. He was to show the American point of view that argues that Japanese terms of trade are unfair (104). Also he was to refer to the North American Free Trade Agreement and reflect how it is beneficial for Mexico (as first developing country to join the US and Canada) which could not gain support from Europe to develop (as Europe was to concentrate on its own further development and unity at the moment), and to how the joining of Mexico was to benefit the US (and Canada) as it would open a large market for the US as well as cheap labor (106). A good point made by him was to show the prospects of incorporating more Latin American countries in NAFTA (as this book was published in 1994) while saying that the Latin American market "remains too small to compensate US exports for any broader loss of markets in Europe, Japan, and elsewhere "(112). This conclusion might have led him to have a closer look outside the US (and NAFTA) circle. In a chapter of his book, he was to look at the "economic future of Europe". He was to argue that an implication of the monetary union may be less need for European countries to hold large reserves of dollars, as there will be "reserves pooling". This may lead to an excess supply of dollars, and consequently a "downward pressure" on the dollar (203). Unfortunately, this may be the case, meaning that many economies will be affected. Another notice was that the future of Europe is depending heavily on what will happen to the "volcano" next to it, which is the former Soviet Union. This as the author thought, should make Europe assist the former Soviet Union in order to assure that Europe will not be affected by problems such as economic immigrants (204). At his conclusion, he was to mention that Europe could play a similar role to the world trade in the future as the one played by the US after the Second World War. He was to look at the Uruguay Round and have some interesting remarks about it. There are two of them that seemed to me as interesting. The first one states that major achievements in the Uruguay Round need not to be by further liberalization of trade, but by the very fact that such a round reassured the already given promise not to return to protectionism (231). As for instance Japan was fearing "new protective barriers that might be otherwise wise set up against Japan" if the round was not held (69). The second one was to show how the areas in which the round was to seek further liberalization were divide into two; categories: the first include services, intellectual property, and investment, while the second included agriculture and textiles. He remarked that developed countries agreed to liberalize the second category as to encourage developing countries to liberalize the first category (68). Another topic, that he was to view, was the effect on the relation between global trade and its effects on the environment. He was optimistic about the future of environment with further trade growth. He saw that economic growth may be linked to more pollution problems, but this might be the case at first, as the more the countries get more developed, the more they take better "environment friendly" measures. Furthermore, he was to argue that there are "two types of environmental damage: local reversible and global irreversible" (210). He thought that no tough measures were needed to be taken against countries engaged in the first kind as it did no harm to the rest of the world and as it could be "repaired later. While he encouraged taking tough measures against the later. He added that in case that a country may led to environmental damage, only then economic sanctions or other measures could be legitimate if peaceful means failed (211). His overall handling of the environmental issue was well put except for some details, as he gave no clear enough guides to differentiate between what is local reversible and what is global irreversible. The author was to handle some major issues concerning global trade and its prospects. However, as it seems to me it was to give little concern to some major issues. For example, he failed to look at the North/South relations, as it seems that the fact that the gap between the rich and the poor increased. Also, poverty, huge increase in the third world's population, and the lack of water in the future may lead to problems to the world as a whole and so serious steps must be taken to contain a forthcoming disaster. Furthermore, the author should have taken a serious look at the South East Asian countries (the Asian Tigers) as it seems that they might become a real economic power (possibly with Japanese supervision) and this will have enormous consequences on global trade. China, with its huge power and huge potential economy and market, should have got his attention as it might be a major economic power in the near future. Overall, the author seemed to try to give various opinions, and rarely mark his analysis as the "right" one. However, his neglecting of some major aspects of international trades (as the economic powers, and the North/South relation mentioned above) did not necessarily harm the book. This was due to the good analysis he gave to the specific issues that he covered, and his attempt to be objective