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Financial Foreign Policy. US/EU Trade Deal Will Ensure Transnational Stability

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Renewing an Old Friendship

1971 was the first year since 1893 in which the United States ran a balance of payments defect. With great deal of consistency the US trade balance has been in surplus. According my research on twice once in 1973 and again in 1975 there has been a surplus. According to US Census Bureau the trade deficit first exceeded a $100 billion in 1984, Since 98’ it shot to a amazing $ 377 billion. And in 04’ topped over $611 billion… and 2008 maxed out at $700 billion. Why is this important you might ask, it is simple the trade deficit increase with the growth and value of US exports a fact developing and third world countries understand all to well. The question arises what if US and EU countries could strengthen its international reach and influence include by creating a trade agreement similar to NATO thus biding and expanding markets for both. How would this increase US/EU Transatlantic partnership to ensure security?

Theoretical Framework:

“The economic theory of conflict argues that these people have been taken in by accepting the discourse at face value.” “History matters because if a country has recently had a civil war, its risk of further war is much higher. Immediately after the end of hostilities there is a 40 percent chance of further conflict.” Other important factors that matter in attempting to discern whether it is greed or grievance that foments civil conflict are the political activism of and financial support from diaspora. According to CL, “diasporas appear to make life for those left behind much more dangerous in post conflict situations.” “to predict a civil war, it is surely more useful to focus on near-term indicators such as political incidents and rising violence.” At the same time, the model is useful in pointing to the typical structural risks and so provides some guidance on longer-term policies for prevention.”

Sizing up the opposition…China

When the economic policies of China are examined, one can clearly see that the objective is to become the world’s largest economy thus there is an overt desire to influence world economic affairs by loaning countries that have currency shortages large sums of cash at low interest rates thus giving them a large sum of debt to hold and use to influence international policies when favorable to China. This is not the goal of any one particular interest with China rather the collective goal of both the Chinese people and the Chinese government. China has a unified position on subjects such as reunification of Taiwan, Tibet and its role in the South China Sea as well as on issues such as monetary policies and censorship.

Economic Imperialism

Multinational financial bodies see a massive US /EU trade agreement as both parties seeking to establish external economic ties that can used to influence the internal polices of sovereign neighbor states. It can also be used to buy support in the international community to further a nations states ability to grow it own economy. experts describes it as “less obtrusive and also generally less effective than the military variety is, as a rational method of gaining power, a product of modern times” this is a tactic developed by the US in 20th Century and has been adopted by The Peoples Republic of China towards the West and the developing world.

How transnational partnerships could deter violence and ensure security for US and EU.

Three factors that he views as key to predatory rebellion. The first is the presence of primary commodity exports in an economy that is dependent on them. The ability to create a stable economy and maintain the social contract is the very foundation of a nation state maintain the will of the people to allow its government to rule. With a the ability to maintain the social contract a government fore fits its authority..

The World Bank continues to be the principle multinational institution for global financing. Over the years it has achieved many success but also has been plagued by an number of controversies. Most significant among them are the banks commitment to long term sustainable development .

The overall presence of a rebel organization plunges the society from peace into civil war, and the costs of war are likely to outweigh the costs of government predation. “The presence of military dictators within its officer ranks or extremist groups both left and right present the internal and existential threat to the nation state.

The third is that under developed countries tend to create ideal conditions due to the high poverty levels low literacy rates as opposed to stable developed countries. Coller is quoted as saying that “inequality does not seem to affect the risk of conflict. Rebellion seems not to be the rage of the poor.”

It is simple to understand this concept one only has to look to Nigeria in northwestern African nations of 168 Million according to the CIA and literacy rate of 61% over the age of 15 with the ability to read and write

Massive Debt with no financing alternative spurs Conflict..... and China makes money

The debt burdens of developing countries continue to hinder their economic and social developments. Although there have been several programs to try to resolve the problem, no one program has proven to be completely effective. Roughly the debt burdens of developing and middle-income countries have continued to rise. They increased from $500 billion in 1980 to $1 trillion by 1985. By 2000, their debt was about $2 trillion.

According to experts the debts of HIPC countries increased from $60 billion in 1980 to $190 billion by 1990. With unsustainable debt, many of the worlds poorest will not be able to receive an education, have access clean water, or be free from extreme poverty due to their governments spending more on debt repayments than on social services. It is safe to state with a great degree of confidence that the destinies of these people can be changed with the cooperation of international organizations, developed countries, and developing countries to reduce debt payments and divert those savings to social expenditures.

US and EU are about to change the Game on China.

The United States and European Union are currently negotiating such an agreement. The idea is to develop an clear alternative to China and with India now in the game things are sure to become more interesting and will provide a clear alternative to third world and developing countries.

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