Team project management and organizational dynamics

Team Project

International Trade

In evaluating how the ramifications of international trade on jobs in the U.S., and in also assessing its impact on this nations' balance of trade and standard of living, the article Globalization in Retreat, written by former U.S. Deputy Treasury Security Robert Altman illustrates just how quickly and significantly global trade has changed in just three years. Each of these issues, the ramifications of international trade on jobs and employment in the U.S., how international trade is affecting the U.S. balance of trade, and how international trade is significantly redefining the global standard of living are analyzed. Underscoring all of these factors is the realization the free-market capitalism as it has been known for the last 30 years is not the panacea to global economic recession as it has been in the past (Altman, 2009). The severity and depth of the global economic recession is re-ordering international trade, and with it, the economic and social structure of nations to such an extent that free market capitalism vs. government control is being debated in the U.S., France, the United Kingdom and Germany (Altman, 2009).

Ramifications of International Trade on Jobs in the United States

The net effect of the global recession has been to significantly reduce global trade over the last three economic quarters, resulting in significant unemployment throughout the manufacturing centers of the U.S. The downturn has shown, as Altman (2009) illustrates in his article, how tightly interconnected the U.S. economy is with the UK, France and Germany. It has also shown that despite the most manufacturing centric regions of the U.S. having unemployment rates that hover in the 20 -- 25% range, the global rate of growth in international trade has not become significantly negative during this downturn (Altman, 2009). Instead China has been able to withstand the economic downturn by concentrating on re-indexing its currencies including the Yuan and also by investing a significantly higher percentage of its GDP back into manufacturing and retailing, two industries supporting the Chinese economy right now. All of these factors are having a deflationary effect on American employment as a result of the fundamental re-ordering of international trade.

International Trade Influences on the Balance of Trade

The global recession continues to force a bipolar, more fragmented economic system in regions of the world that had just become more cohesive. According to Altman (2009) the Balance of Trade in emerging economies are now vulnerable to retreating back to their previous state of flat-lined and negative economic growth. As a result, the balance of trade across nations continues to decline based purely on the reduction in net volume of new business. Balance of trade is being more impacted by currency re-valuations in China, the declining value of the British pound and the reconsideration of indexing the Euro (Altman, 2009). What emerges as a result of these conditions that the decision on the part of the G-20, or ministers and central bank governors of the world's largest economies is to continually increase the International Monetary Fund (IMF) over time (Altman, 2009). This is going to have an immediate effect of increasing inflation globally and also fuel more of an unstable region in Pakistan and Afghanistan (Altman, 2009). Never before has the balance of trade had direct implications on the relative political stability of nations as they do today (Altman, 2009). This tight link of international trade and political stability is projected to become more prevalent through African nations whose economies were just beginning to gains stability as well. In summary, the current global economic crisis has shown that the dependency of political stabilities of nations is directly related to the stability of the balance of trade.

How International Trade Affects the Standard of Living