Political Economy of International Trade: Global Market Dynamics

This essay delves into the political economy of international trade, highlighting the interplay between political policies and global commerce. It examines how factors such as free trade and protectionism influence a nation's economic development and its role in the international market. The essay discusses the impact of political decisions on trade relationships, the shift towards protectionism by some countries, and the consequences for local producers and cultural exchange. The analysis includes a review of relevant political theories, such as hegemonic stability and dependency theory, which contribute to understanding the evolution of trade policies. The author emphasizes the importance of a pro-trade government and positive international relations for economic growth, while also addressing the challenges posed by the globalization of trade.

Running head: POLITICAL ECONOMY OF INTERNATIONAL TRADE
Political Economy of International trade
Name of the Student
Name of the University
Author note

1POLITICAL ECONOMY OF INTERNATIONAL TRADE
International trade has always been a subject to the politics of the nations that are
involved. The exchange of goods and services between multiple countries depend on the
various political policies that are impending in those nations (Frieden & Lake, 2015). The
international market for trade is huge and countries make huge money from such trades as
they exchange the abundance produce with other countries for money or other services. For a
nation to develop and progress on the economic front, it is essential for them to involve in the
process of free trade so that the economy does not face any kind of stagnation and keeps
growing. Trade of a nation depends on the political actions that are persistent in the country,
it is essential for a country to have a pro-trade government and the relationship they share
with other trading countries have to be good so that they can involve themselves in the
various trading practices. The practice of free trade is one of the most important political
factors that create the stage for a country to become an eminent player in the global trade
arena. The liberalization of trade has been a feature that has been eminent in the global stage
from the 1980s and hence the global trade market has kept growing since then (Dawson,
2015). The political scenario has changed since then and it is seen that the countries have
become friendlier with each other as the political heads have realized the need for a good
relationship as it will help in trade. However, it is seen that with passing time, there are a few
countries that are moving away from the free trade and have started shifting towards political
protectionism. The free trade has lead to the mixing up of cultures and has lead to the
degradation of the ethnic cultures of the place. Due to the inflow of good from the foreign
countries, it is seen that the local small producers are not getting any share of the market and
the products they produce are being sold are low prices and they face huge loses (Irwin,
2015). People have moved away from the ethnic to the imported goods and the local
producers are slowly moving out of business. Such a practice will lead to the economic
situation of the country to fall and the number of unemployed to increase. The political

2POLITICAL ECONOMY OF INTERNATIONAL TRADE
theories of hegemonic stability and dependency theory have triggered the movement away
from free trade for various countries as they have felt the need to preserve their own culture.
Many a times it was seen that in the earlier days, it was the pressure from the various
domestic groups to open up the market and the government complied to such demands but
now the politics of trade has taken a turn and it is evident that all the positives and negatives
are well evaluated before a decision is taken regarding the trade policies.

3POLITICAL ECONOMY OF INTERNATIONAL TRADE
Reference
Dawson, L. (2015). Toward Free Trade in Canada: Five Things the Federal Government
Can Do to Open Our Internal Market. Fraser Institute. Retrieved from:
http://citeseerx.ist.psu.edu/viewdoc/download?
doi=10.1.1.730.3567&rep=rep1&type=pdf
Frieden, J. A., & Lake, D. A. (2015). World Politics: Interests, Interactions, Institutions:
Third International Student Edition. WW Norton & Company. ISBN 0393283526,
9780393283525
Irwin, D. A. (2015). Free trade under fire. Princeton University Press. ISBN 1400866189,
9781400866182