Sunday, 23 April 2017

Competing to win the first deal with the US?

Wilbur Ross, the US secretary of commerce, has reopened the door to receive negotiation with the European Union but implied that the European Union, Japan and China have to compete for the opportunity of making the first trade deal with the US. I have to say what a typical Trump style foreign policy strategy is. Trump has always talked about how he will use his business skills in American politics, and this is definitely a sign of it. However, whether it is a successful move or a political ignorance is still arguable.

This question is totally based on if the European Union, China and Japan are willing to compete with each other. There is an existence of competitions between these countries, it is definitely extremely beneficial to the US in terms of its foreign policy and economic performance. As it is about making trade deals, then we have to look at how likely Chinese exports, Japanese exports and the European exports are competing with each other. The competitions between these three economies are differentiated. The competition level between Chinese exports and the European exports, especially the German exports is the lowest, as the two economies have different comparative advantages, many Chinese exports still rely on their cheap costs of production, and the European exports, especially the German exports are dependent on the skilful labour force and high-end technology. The competition between Japan and the European Union is the highest I think. This is because the exports from the both economies have much more similarities. And the competition between Japan and China is in the middle. Therefore, such foreign policy strategy that allows China, Japan and the European Union definitely benefits America, but also makes China in a relatively advantageous position as it faces the lowest level of competition among the three economies while Japan faces the highest level of competition among the three.


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