Role of Trade in World Peace

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By OwnerAccount

Good and equitable relationship is the pre-requisite of peaceful co-existence. This may be in a home, amongst family members, between neighbors, interpersonal relationship amongst the community, or networking between different businesses. On a wider scale, in a bigger picture of world politics and relationships, such associations are developed between diverse countries of the world. Such interactions foster a better understanding between people of countries. Such liaison is called “trade pact” or “treaty” between various countries.

Many a times, such trade pacts are entered into, to strengthen the bond between countries. At other times though, such connections are created with a view to use them for creating future good relationship, or reduce existing tensions between two countries, and thereby bring about and maintaining peace between two nations. Such pacts then prevents possible hostilities, frictions, and even wars and destruction.

Purpose of such trade pacts is then two folds. First to foster a better relationship, and second to reduce the tension between two nation countries and bring about a lasting peace with economic prosperity. It is such peace and harmony that becomes a stepping stone to promote a long term tension free and peaceful co-existence. The time, money and energy resources wasted on worries and anxiety is then better used on something positive to build the country and nation.

The resulting level of economic integration depends on the specific type of trade pact. These pacts take one of many forms, depending on the objective, and acceptance by the participating countries and their level of confidence in the ensuing affiliation. Vested interests and politics however, do play an important role to effect the outcome of such negotiations.

There are many different forms that such affiliation may take:

1.      Bilateral Investment Treaty.

2.      Trade and Investment Framework Agreement.

3.      Preferential Trade Agreement.

4.      Free Trade Area.

5.      Trade Blocks

6.      Custom Union, Currency, Economic and Mutual Protection Treaty.

7.      Most Favored Nation status.

8.      Memorandum of understanding.

Unilateral actions and decisions are taken by many countries to protect some specific industry within, in the shape of Tariff barriers and Import restrictions, and even prohibitions.

Bilateral or Multilateral agreements: any contractual arrangement between Nation States concerning their trade relationships, with other sovereign state involving trade and tariff, falls under this category.

While considering such agreements, pacts and treaties, there are so many examples available. Each one would have one or multiple objective to fulfill. It may also have some short term, long term or even obscure objective, which may be part of some very long term strategy. Some of the examples are given below. The range of these agreements will also provide the possible wide range objectives of different kinds.

The North American Free Trade Agreement (NAFTA): This is between Canada, Mexico, and the U.S. As the name suggests, this allows trade between these three countries “free” of many restrictions, and tariffs.

The Free Trade Area of the Americas (FTAA). Negotiations are underway to expand the NAFTA model by creating a “free trade” zone from Argentina to Alaska.

The Central American Free Trade Agreement (CAFTA): It is expansion of NAFTA model to Central America. CAFTA passed the US Congress in July, 2006.

 The Andean Free Trade Agreement (AFTA): This is expansion of NAFTA model to the Andean nations of South America.

U.S. – Bahrain Free Trade Agreement is an important step in implementing the President’s economic reforms in the Middle East and pursuing the goal of a Middle East Free Trade Area. U.S. goods exports to Bahrain in 2003 totaled $509 million, including aircraft, machinery, and vehicles, pharmaceutical products, and toys, games and sports equipment. The United States is seeking to eliminate tariffs and other duties on trade between Bahrain and the United States on the broadest possible basis, improve intellectual property rights protection, and eliminate barriers in Bahrain’s services markets

 If one was to list the countries with which USA has finalized some type of trade agreement, there will be majority of the countries of the world in that list. Some of these are Memorandum of Understandings, Cooperation agreements, or full fledged Trade Agreements. US has standing agreements with most of the countries of the World

US has some old agreements and treaties, which are effective but are not used to a large extent, like Bilateral trade treaty, through which Pakistan is a also a trade partner, which was signed by Pakistan’s first Prime Minister Liaqat Ali Khan, during the early days of independence from Britain.

This list is a testimony to the fact that world peace is dependent on Trade, Technology and Resource sharing. As this is widened and practiced further, we shall see better relationships and peace all around.