2000 Trade Agreement with China and the Damage it has caused to the Research Paper

2000 Trade Agreement with China and the Damage it has caused to the United States - Research Paper Example This agreement came as a result to the current conceding to China of permanent ordinary trade relations position by the United States Congress, paving the way for China’s entrance into the World Trade Organization. Given that the United States has long complained in relation to the huge trade shortage with China, this agreement should develop the bilateral trade balance in support of the United States. All the same, many long-standing trade concerns between China and the United States remain unsettled to the present. Identification and description: Historical Event The identification of the event concerning trade between the two nations stems for several years of long-term business. It is worth to mention that the two nations have been doing business transactions before the implementation of the trade agreements in the year 2000. Notably, these two nations have been benefiting from each other through various ways while doing business (Jialin, 2003). However, with reference to different statistics of the two nations, there is some understanding that China has had various benefits while causing some damages on the economy of the United States in the end. The understanding of this concern is well demonstrated throughout the entire discussion thoroughly. The main issue of concern is the different measures of the bilateral trade inequity by the two nations. ... In that case, distorting the bilateral trade equilibrium, and puff up the U.S. trade shortage with China (Ransom, 2001). A comparable aspect is the weight of capital flow. The majority of Chinese export goods to the United States are manufactured by outward-processing organizations. Nearly all returns accumulate to the United States and other foreign owners of such firms, whilst China gets only an insignificant manufacturing fee. Taking into consideration such aspects, the United States trade imbalance with China is considerably smaller compared to the official data suggestions (Horn & Mavroidis, 2001). In its implication, there is no reason to make the whole issue a captive in the United States domestic partisan effort and consequently poison U.S. and China political connections. One of the international trade agreements is the General Agreement on Tariffs and Trade (GATT) and is also the foundation through which other trade agreements and frameworks have been formed for instance, t he â€Å"General Agreement on Trade in Services† abbreviated as GATS. The agreement established major principles to monitor business and trade operations among the member countries. The important principle is that of non-discrimination for foreign goods within the member countries. GATT also reduced trade barriers and tariffs to international trade including importation quotas and bringing equality (Jialin, 2003). The other principle harmonized the standards of goods and services internationally thus establishing a regulatory ceiling for trade operations. Very soon, the global economy was closely integrated thanks to technological changes and the invention of the internet (Murray & Raynolds, 2007). Later in 1995 the World Trade Organization (WTO) was established by the member