The Friction and Collision Between Trade Sanctions and Free Trade as Effects of Economic Globalization

Topics: Free Trade

In today’s world, the trend of economic globalization is becoming more and more apparent. In this context, there is friction and collision between trade sanctions and free trade.

After the end of the cold war, the world’s political and economic patterns have undergone tremendous changes; disputes and conflicts between countries and countries have intensified, so the emergence of trade sanctions is the inevitable product of this era. In the era of economic development and competition, even if trade sanctions are the inevitable phenomenon of this social development, people who seek coherence to develop international trade during the conflict become one of the most valuable solutions.

In this paper, I will focus on trade sanctions-related issues and some examples to help people understand their importance and how they impact the rest of the world more clearly.

There is no doubt that if people want to explore the development process and the impact of trade sanctions profoundly, they need to figure out its definition first.

Trade sanctions are hard-to-trade measures taken by a country or some governments through their laws(Tejvan, Pettinger). Through the implementation of trade sanctions, the economic trade between countries will continue to decline; therefore, it will cube t off in the future. This kind of trade protection measures extent hindered free trade to a certain extent.

Economic sanctions refer to non-troop enforcement measures other than severing diplomatic relations. Also, Economic sanctions were initially an adjunct to war. It is reflected in the financial, tr, ade and other fields.

Get quality help now
Sweet V
Verified

Proficient in: Free Trade

4.9 (984)

“ Ok, let me say I’m extremely satisfy with the result while it was a last minute thing. I really enjoy the effort put in. ”

+84 relevant experts are online
Hire writer

The implementation of the trade embargo, the disruption of economic cooperation, and the cut-off of financial or technical assistance are the most common forms of economic sanctions. In general, trade sanctions can only harm countries that impose sanctions, but economic sanctions are also a double-edged sword, athesehis sanctions will also suffer some economic losses(Jonathan, Masters).

Trade sanctions are a type of economic sanction ions based on international law. Economic sanctions in the Western historical data can be seen in the first four three two BC, since then it has been used. For example, the old international coalition and the United Nations today have such a system. In my view, the primary purpose of economic sanctions in international organizations is to allow the Member States to assume unfulfilled obligations if their measures have an absolute treat to the trading countries.

Trade sanctions are always used in economic sanctions, such as the Gulf War, on August 2, 1990, and Iraq’s invasion of Kuwait. The United States firstly reacts and imposes sanctions, and they protect the sake of strategic and economic interests in the Gulf region. President George W. Bush signed an emergency administrative order prohibiting trade with Iraq and freezing Iraqi and Kuwaiti property. Besides, the United States sent officials to persuade Turkey and Saudi Arabia to shut down Iraq through the territory of the two pipelines line, and they also required Jordan to stop all trade with Iraq. During the next two years, the United Nations adopted fourteen resolutions to conduct comprehensive economic sanctions and trade embargoes against Iraqi land, sea, and air(3 No author).

From the above example, we can conwouldclude that the key to economic sanctions is country would gain the support of the majoritiesmajoritytiple countries to join forces for the goal, and specific trade sanctions will be effective. On the other hand, despite the economic sanctions imposed by the United Nations against Iraq, black market transactions have also thrived because of sanctions.

In the course of trade sanctions, the sanctioned countries will cancel the already agreed trade contracts and suspend their obligations. They also restrict or prohibit some or all of the trade, freeze account deposits and other assets, and cancel the amount of money that has been sanctioned by the expected country. This series of measures will have a positive impact on the sanctions and the sanctioned countries.

Since the Iranian nuclear issue became an international focus in 2003, the United States continued to increase its economic sanctions against Iran. On December 31, 2011, the United States announced the “2012 fiscal year defense authorization law”, which is the first time the United States expanded financial sanctions to all foreign financial institutions. On July 12, 2012, the United States once again force the scope of sanctions from the financial expansion to trade, energy and personnel, and other fields. To further deepen the refinement of sanctions and prevent Iran from adopting other means to circumvent sanctions. At the same time, the United States requires the international community to take substantive measures in line with its sanctions, and warn “any country or a friend of the United States, or do business with Iran.” With the deepening of sanctions, on January 2, 2013, the United States additionally strengthen sanctions in the fields of energy, shipping, and shipbuilding, it will also extend its trade to precious metals, graphite, aluminum, steel, metallurgical coal, and some commercial software to restrict barter deals to prevent Iran from circumventing sanctions.

From the above example, we can see that a series of trade sanctions in the United States not only have a certain impact on the countries to be sanctioned but also have an impact on the countries where the sanctions are located.

For Iran, sanctions have dealt a major blow to Iran. First of all, Iran’s economic wealth has been hit hard. Iran’s economy is highly dependent on foreign oil, oil is Iran’s economic lifeline, and, foreign exchange income of the main source of oil revenue. In addition, oil revenue accounted for 85% of all foreign exchange earnings and 70% of government revenue.

Oil revenues cut off Iran’s most important economic source. Second, the Iranian currency riyal had been devalued, and this phenomenon leleadso social unrest. On July 1, 2012, the EU began to stop the import of Iranian oil, resulting in rival only in October on a sharp depreciation of 40%(F.Tan). ThSocietyas benefited the masses and the broad masses of the rich and the poor continue to increase, o then is facing increasingly serious social problems. Thirdly, the sanctions have caused serious difficulties for Iranian foreign trade and exacerbated Iranian political turmoil. In February 2012, the United States put pressure on SWIFT to ban Iran from being sanctioned by banks and entities using their networks, and the EU followed up. SWIFT is the world’s largest e-banking system, occupying a monopoly position in the international financial services market, and major national banks have joined the system. Fourth, trade sanctions have had a significant impact on Iran’s oil industry. US sanctions cause Iran’s oil production equipment aging; the development of the energy industry is far behind the established goals.

The United States’ sanctions against China are a good example of the show in the influence of the sanctions on the country. I believe that trade sanctions will not only help solve the problem of trade deficits but also seriously damage the United States’ welfare level. First of all, trade sanctions against China will harm the United States’ local consumer welfare. According to traditional economic theory, free trade will improve the welfare of both parties. No matter how cheap the other side of the product is, consumers will get benefits. The United States no matter what measures are taken to improve trade barriers is forced to reduce the import of Chinese products, this approach can only make US consumers turn to sub-optimal product selection. The wider the scope of trade protection, the greater the amount involved, then the more the US consumer surplus loss. In addition, the trade sanctions against China will damage the interests of high-end producers in the United States, the United States’ exports to China are capital-intensive and technology-intensive products, it is not only their comparative advantage but also the main source of wealth creation. China’s decline in imports from the United States will directly damage the interests of US high-end producers so that jobs decline. In the end, trade sanctions will also hurt the interests of US overseas companies. In recent years, foreign-invested enterprises have been more than half of the export commodities and rising in China’s total exports. At least 1/3 of the US businessmen in China invest in the production which imports from The US to China.

Trade sanctions against China will undoubtedly hit this part of the US company and damage the interests of overseas US companies. Trade sanctions are of some validity. Therefore, when the decisionthe -makersharply by makes a decision, he needs to balance the various factors. From the US sanctions against Iran and the US sanctions against China, we can see that the effectiveness of trade sanctions is manifested in trade sanctions is a double-edged sword. It is important to take into account the effects of the countries in which sanctions are imposed and the effects of sanctions on States. Thus, trade sanctions can be more profound understanding and analysis. To begin with, trade sanctions are subject to international law, for example, Article 24 of the Charter of the United Nations provides that “in international relations, Member States shall not use force or force to threaten to undermine the territorial integrity and political independence of any State. “ Second, the size and level of development of the economies of the sanctions will also affect the economic effects of sanctions. For example, developing countries are more vulnerable than developed countries, the most important reason is foreign exchange shortages in developing countrieexistenced so that The capacity of developing countries is limited; the existence of weak industrial bases in developing countries, and the level of backward technology. It all makes developing countries have a small space in the re-allocation of resources and adjustment of the economic structure.

Through the above series of exploration of trade sanctions, I would like to analyze two specific trade sanctions to help people have a more specific understanding of trade sanctions.

The US sanctions against Russia are a good example of analyzing trade sanctions. On March 16, 2014, the Ukrainian Crimean people in the form of a referendum decided to cut into Russia, but the United States led by other Western countries do not buy it. For example, On March 2, 2014, US Secretary of State Kerry warned Russia in Washington that the United States would take joint allies against Russia to take banned visas, freeze assets and trade sanctions, and even threatened to expel Russia from the G8. On March 20, 2014, the United States announced sanctions on Russia and they have frozenPutin’sn Netflix account. On July 17, 2014, the US government on Wednesday announced a new round of sanctions against Russia. The new sanctions are aimed at several big banks, as well as energy and defense companies. On September 12, 2014, the US government announced further sanctions against its defense, On December 16, 2014, Russia suffered a “black Tuesday”: Monday, the ruble fell sharply by  11%triggeringd the Russian central bank FireWire to raise interest rates to 17%; foreign exchange market for the Russian central bank to raise interest rates do not buy it on Tuesday, the ruble depreciation rate once Ultra-19%; Russian economy has been in the “edge of the crisis.

In my opinion, the most important goal in triggering United States sanctions on Russia is to use trade sanctions to curb the re-emergence of Russia, tS this way to stabilize the United States to become the world’s most powerful country in the world. From a political point of view, for nearly two decades, Russia’s comprehensive nationobviousis obvious, and the international influence is also rising, so Russia is on the road to re-the the the the the the the the maker sharply the the the the the the ise. As for economy, since 2000, Russia’s GDP growth rate of about 7% per year, becoming the world’s economic growth rate of one of the countries. In 2007, Russia’s gross domestic product ranked tenth, and the world re-entered the world’s top ten body. Finally, Russia’s military strength has gradually recovered. These all have become the factors why the United States must cut Russia.

The United States’ sanctions against Russia show people many aspects of the impacts. Firstly, the US trade sanctions will make the dollar lose its hegemony, the dollar, and gold are linked to the fixed exchange rate laid the dollar currency in the world, but with the collapse of the Bretton Woods system, the dollar became a debt currency and it leads the world into the floating exchange rate era. Second, the US trade deficit and the government’s astronomical deficit not only make the United States repeatedly break the debt ceiling, triggering the US CongressDemocratic-Republicanwith Party’s fierce conflict, but also let the EU, Japan, China, and other creditors deeply worried at this situation. Finally, the US debtpasseds with an escape by a serious blow to dollar credit, Which makes the United States in front of other countries lost their credit.

The United States sanctions against Russia also bring some influence to the current well-known international community. First of all, economic sanctions increased the ruble crisis. Some well-known clothing brands and electronic products shortly began to adjust their price to avoid the loss caused by the exchange rate fluctuations. Second, the trend of globalization is intensifying, and multinational corporations and governments are constantly pursuing economic interests.

The US embargo on Cuba is also a specific trade sanctions event. On February 3, 1962, when the United States President John Kennedy signed a decree, and officially announced the implementation of a comprehensive trade embargo against Cuba. The most important purposethesethis trade sanctions are that the United States wants to Bloxwich the Kaschu regime collapsed in an economic blockade, thereby consolidating the US economic dominance.

The US economic blockade against Cuba is the longest economic sanction in human history. US sanctions against Cuba have caused huge losses to the Cuban economy, and at the same time, it lost the Cuban market in tourism, transport, manufacturing,g, and agriculture. The improvement of the relationship between the United States and Cuba has had a significant impact on Cuba’s development prospects and the relationship between Cuba and Russia, Venezuela and China. The impact of the trade embargo on Cuban society and culture was also has significant

  1. Foreign art is difficult to enter the closed Cuban society, which leads to the Cuban culture the exchange with other cultures have weakened.

In today’s society, the phenomenon of trade sanctions continues to emerge. In my view, trade sanctions still have some drawbacks. If people want to have a stable and peaceful world, each country should seek legitimate competition and abide by the law; each country develops in relatively equitable environment progress. Every country should try thitsest to advocate free trade and reduce trade sanctions, which will develop the global economy more harmonious and stable.

Work Cited

  1. Tejvan, Pettinger. “Trade Sanctions.” ECONOMICS. N.p., 24 Sept. 2013. Web. 05 July 2017.
  1. Jonathan, Masters. “What Are Economic Sanctions?” COUNCIL FOREIGN RELATIONS. N.p., 08 Feb. 2017. Web. 4 July 2017.
  1. “A SHORT HISTORY OF THE DEPARTMENT OF STATE.” OFFICE OF THE HISTORIAN. N.p., n.d. Web. 6 July 2017.
  1. F. Tan, “Iran’s Asian crude buyers see flow steady despite finance sanctions,” Reuters, December 30, 2010, accessed on May 28, 2011, http://af.reuters.com/article/energy OilNews/idAFL3E6NUOBK20101230? page… Last.

Cite this page

The Friction and Collision Between Trade Sanctions and Free Trade as Effects of Economic Globalization. (2022, Jun 29). Retrieved from https://paperap.com/the-friction-and-collision-between-trade-sanctions-and-free-trade-as-effects-of-economic-globalization/

Let’s chat?  We're online 24/7