Analysis Of The United States Trade Policy-From Free Trade To Fair Trade

The U.S. trade policy has been playing a key role in international politics and economy. Debates on free trade and fair trade have caused lots of discussions, some of which have evolved as the theoretical milestone for either free trade policy or fair trade policy.In face of the current financial crisis, analysis on the U.S. trade policy is of vital significance because it matters whether we can adjust and promote U.S-China trade relationship and keep our economy growth quick and steady. We are supposed to evaluate the existing and potential effects of policy transition on China on the condition that we have a clear understanding of what is the motivation of the transition. In this way, we can be better prepared and take further initiatives. Based on the policy transition from free trade to fair trade, it is important to explore the game theory between different interest groups, the end-oriented thinking as well as Americans' top priority-Interest. The thesis intends to review the U.S. trade policy and warn the impending protectionism, which contributes a lot on how to nurture U.S.-China cooperation and world economy.Based on the review of the existed arguments about free trade and fair trade, this thesis explores the causes of such a change, and the effects on international trade regime it has. The thesis includes five parts. The first part relates the cause and significance of choosing this subject, and outlines the literature about free trade and fair trade. The dispute on free trade concentrates on its effect on employment, welfare and income disparity, while fair trade gives birth to two brand-new topics-labor standard and environment standard, followed with analysis on the causes of the policy change and what it has brought to the world. The second part elaborates on the background, main contents and effects of free trade policy. Since the World War II, the U.S. advocates free trade policy and implement it well, and the world is prosperous. The paper takes NAFTA as an example, analyzing its' effect on the member countries. The data reveals that all member countries benefit from NAFTA, while the majority of public support NAFTA. The third part focuses on the fair trade policy, including the transition background, main contents and effects. Fair trade policy challenges the traditional comparative advantage theory and concerns with human rights, and it is actually protectionism in disguise. The forth part evolves on how China responds to such a change, probably gearing to protectionism, especially in the financial crisis. China is supposed to balance well the fairness and protectionism. The fifth part gives a conclusion to the whole paper.The thoughtful ideas in this paper lie in two aspects: one is defining the fair trade policy as new protectionism in disguise of fairness. The other is combining the financial crisis in the analysis. The U.S. is probably gearing to protectionism to shelter its employment, and China is supposed to restrain it in some extent with its increasing influence on the international stage.