Cooperation or Hegemony - Essay Example

Cooperation or Hegemony? The international trade system seems constantly fluid and is highly adaptable. The center for the international trade system lies in the trade policies towards protectionism or free trade of different states. In contemporary times, the international trade system involves certain rules, which explicitly target reducing protectionism. In this way, the instability, which may occur because of the uncertainty and unpredictability of trade relations can be, minimized (Ravenhill, pp.138). In the contemporary world, many people recognize that the United States has complete hegemonic control and dominance over the international trade market. However, this is a large debate, surrounding this issue, which perhaps can never be resolved. Nevertheless, as Frieden, Lake and Broz (pp. 21) note, powerful states tend to have broader focus upon political power, aggregate national income, social stability and economic growth, which in some way affect the working of the international trade system. The same authors also establish the argument that before the First World War, much of power in the international domain lay at the hands of the British, but eventually United States sought that power after World War I (pp.28). Therefore, is it true to establish this idea that United States had hegemonic control on the international trade market? Or have different countries brought the system together, as a form of mutual cooperation? Has United States actually maintained stability in the market, because of its hegemonic control? The paper attempts to align with the idea of hegemonic control by the United States, which leads to generalized stability in the international market. As shown in the different figures, denoted in Frieden, Lake and Broz (p.28), the United States had always pursued a policy, which was favorable to its own development. Throughout the different periods in the 19th century, the United States had not opened itself to trade, and had adopted a number of protectionist policies. Once it had established itself as a proper economy, able to compete effectively in the international market, and in fact gain control, they showed willingness to trade, because it had achieved the four measures, which have a huge role in determining the degree of openness (the ones mentioned above). This definitely illustrates that the United States was seeking to become a dominant and hegemonic state, because it did not follow the trends that the other parts of the world were showing. The state-power argument also establishes this idea that while Britain had an open trading structure, and it was a nation, which had sufficient resources back in the 19th century, it was unable to compel the United States to follow the same policy. United States only opened itself to openness in trade when the ‘rising economic hegemony was able to exercise its influence” (pp.28). Additionally, even the Kennedy Rounds in the 1960s put forth the idea that the United States was going to take a huge initiative in stabilizing the world trade system, because previously it had not done so. The United States only took part in the international system, when it was stable enough to do so, and that was after the First World War, when Britain lost its importance to the country. Even after the Second World War, when the United States had completely gained control over the world, the country led the other allies to have a new system for international trade, something that had not been done before. While Ravenhill (pp. 144) puts forth the idea that it was because of mutual cooperation, subsequent interactions would prove otherwise, because when the United States did not take part in the agreements, they virtually collapsed, and led to no conclusion. One can also observe the workings of the international trade system, when the United States was not involved, or where it simply backed out. Hence, when there was no United States involved, there was no stability in the trade system of the world. United States led the way to closure in the international trade system, following the U.S Fordney-McCumber Tariff of 1922, and subsequently in 1930 with the Smoot-Hawley Tariff (Frieden, Lake, Broz pp. 33). Through such measures, other countries were also witnessed to have increased their protectionist policies, leading to a decline in trade in this particular period, as observed on page number 28 of the same text. During the 1920s, when the United States took no part in the international monetary system, there was a fluctuation in the foreign exchange markets, which led to volatility in the system. Thus, it proves that when the United States was not involved, there was no stability in the system. However, once the United States asserted any actual leadership, there followed a proper structuring to the entire system, which included various agreements, and subsequently leading to the formation of the World Trade Organization (WTO). Nevertheless, the United States had different reasons for maintaining this superior world position. Post-World War II demonstrated the idea that the U.S had become a pioneer of the Western alliance. Since it had taken a major role in the formation of the United Nations, and the reconstruction of Europe, it can be proved that the United States was actually on its way to have a stable international system (Ravenhill, pp. 143). In the international economic system, the U.S had gained hegemony through trade, monetary payments and international investment. Eventually, dollars began to serve as a reserve, because there was a shortage in the market. The United States trade figures were twice more than the figures of the leading nations, including UK, Germany and France. Additionally, the United States was also able to put forth the idea of having an anti-government and pro-business to the international trade system, mainly because it could benefit from the system (Ravenhill, pp.144). The United States was slowly giving a proper shape to the international trade system, which also included values of multilateralism trade, along with a code of conduct for countries, operating in the international arena. In fact, Winham (pp. 144) also uses the words ‘predominant position’ on the majority of the issues of the system. When steps were made towards establishing the International Trade Organization (ITO), the United States took no part in it, which is why it effectively failed, leading to the conclusion that the U.S indeed had hegemony, especially concerning the decisions, because the ITO would have ‘irrelevant without U.S involvement’ (Ravenhill, pp. 144). The Kennedy Round of 1963-7 established a proper structure of the General Agreement on Tariffs and Trade (GATT), something that had not happened because of the failure of the ITO. Moreover, even the GATT was largely a creation of the United States and other European countries. However, it is safe to state that the United States definitely had hegemonic control over the GATT, in the sense that it conducted much of the operations (Ravenhill, pp. 155). Additionally, even the Uruguay Round proves this point further, because it was largely a negotiation between United States and European powers. The European Union consists of a large number of nations, while the U. S is one nation. In terms of proportion and size, America has a hegemonic influence, especially until the 1960s, when the European Union was not firmly established (Ravenhill, pp. 156). Much of the international system, which is established today focuses on the ideas of the United States, which included an anti-government and liberal approach to the area of the trade. The international trade system seeks to create such a situation, so that countries can benefit from trade on maximum (Ravenhill, pp. 168-169). While Ravenhill may suggest that there is cooperation among countries, it is broadly focused in the developed world, when it comes to trade. Additionally, as historic events have proved, the United States had a major role in creating such a system, and when it failed to intervene, the system came on the verge of collapse. Hence, the United States has a hegemonic control, necessary for the stability of the international market. Works Cited John Ravenhill, GLOBAL POLITICAL ECONOMY, Second Edition, Oxford, 2008 (Chapter 1) Jeffrey A. Frieden and David A. Lake and Lawrence Broz, INTERNATIONAL POLITICAL ECONOMY: PERSPECTIVES ON GLOBAL POWER AND WEALTH, Fifth Edition, W.W. Norton 2010. (Chapter 5) Read More