One thing that I've really been wanting to do for quite some time is to talk about the US Presidential Elections, in particular the naming of Sen. Barack Obama as the Democratic Presidential Candidate.
Towards the tail-end of my second year there was an ICA for International Business where we just had to analyse some current issue that would affect international trade. My group did an analysis on the US Presidential Race. Okay it was more of me forcing the topic on my group, but the other ideas were boring. I think.
Back to the topic at hand. At that point, the presidential race was still in its earlier stages. Both Democrats and Republicans still had quite a few nominees running gunning for the seat and there was no definite idea of who was going to represent each party since each party could only submit one candidate for the presidential elections.
Since we had to focus on international trade we looked at their stand on the subject matter at hand. Everybody may be gunning for a Democrat mainly because of the situation in Iraq and the domestic economical situation of the US. But plainly in terms of international trade, it was not necessarily the better choice. This is also if it's in the POV of a foreign country.
You see, Democrats are not generally in favor of Free Trade. What they support is the concept of Fair Trade. Free Trade in its simplistic term is barrier-free trade between countries. No tariffs or quotas. Fair Trade on the other hand means that a country should have the right to protect the interests of their local producers and traders. This includes controlling inflow of foreign-produced products which are usually cheaper than locally-produced goods.
Proof includes the fact that in President Bill Clinton's 8 years in office only one real FTA was signed, that being the North American FTA (NAFTA). President Bush on the other hand installed about 4 or 5 FTAs one of which is the Singapore-US FTA. Even more recently, 187 Democrats in the recently elected House of Representatives were against President Bush's proposed Central American FTA (CAFTA). So Democrats will not really want to sign an FTA especially if there are no tangible benefits for the US.
What exactly does this mean? Well, if you're a producer looking to export your products to the US, its gonna be hard to go in barrier-free. Especially if you are hoping for your country to get an FTA with the US under the new presidency. And since US is pretty much the largest consuming country in the world (which is pretty much the reason why they have such a massive trade deficit), which exporter would not want a piece of that pie?
But looking back at the overly massive figure that is the US Trade Deficit, this could be the right thing for the US. Control influx of imports from other nations and try to kickstart their own export industry. It will roll consumer dollars back into the hands of the US and possibly counteract the inflation that is dwindling the US dollar's value. This may strengthen their economy and cross my fingers will slowdown the recession. A recession is inevitable, but at least this may lessen the impact. Hopefully.
And I also have a sneaking suspicion that the high oil prices are also indirectly affected by a weak US dollar. My lecturer told me that the recent drop in oil prices is due mainly to recession fears so it might seem like a paradox, but in my humble opinion, a stronger US dollar could be more of a double-positive than a cancel-out.
But back to the candidate discussion. I'm not gonna talk about McCain 'cause he is a douchebag and possibly a step backward from Bush. No really. He was the worst possible Republican to get chosen. My group actually predicted Sen. Hillary Clinton to be nominated since she was leading the polls at that time. She also voted for the NAFTA to be enacted back when her husband was President. Though this is not necessarily a sign of bias since at that time it actually seemed advantageous to enact the FTA. And also, her experience was what made us back her for the nomination. But I guess she ran out of steam and Obama's beliefs and charisma started to shine. It's a bit risky mainly due to the fact that Obama does lack some experience. But still, a Democratic victory should be on the cards.
Well, that's my 2 cents worth. I was a bit disappointed that Sen. Clinton did not win the nomination but not overly disappointed since Obama is a good candidate too. Still, it would have been good to see a woman in charge of the US.
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