The various countries in the world are agreeing to trade deals that increase open their countries to more trading with the rest of the world. The two largest economics in the world, US and China are always looking to open up to the world so as to benefit from the trade deals. The recent examples of such trade deals include Trans-pacific Partnership trade deal. However, US president-elect has stated that he will not be for the trade deal and will cancel it once in power. This means that the trade deal will not take effect. On the other hand, China is making negotiations with EU where it seeks to arrive at reasonable trade deals. The two economic blocs launched China-EU investment agreement which expects to come up with various trade policies between the two parts of the world. There is a need to understand what this means to the US economy as well as Chinese economies.
China is making its economy more liberal and welcoming major economies to trade with them. It accepted to implement WTO regulations so that it can make more it more attractive to trade with the rest of the world. The country is also committed to ensuring that there are more reforms that will ensure that the country is even more attractive for investments and trade. This is why EU is keen to ensure that the negotiations are effected. So far, trade between China and EU amount to 1 billion Euros per day. EU is finding it more beneficial to trade with China because it can import cheaper products from China as compared to the USA. On the other hand, EU exports machines such as vehicles and Aircraft (European Commission, 2016). This leads to a win-win situation for the two traders, but it means a great loss to the USA which has been a major partner with the EU for many years.
The trans-pacific partnership deal is one of the agreements that the US was in the course of signing. It intends to create the greatest common market that is double that of the US. The deal included some countries in America and others in Asia. However, the US president-elect has hinted that he will not sign the deal (Office of US Trade Representative, n.d). This means that China will have greater opportunity to negotiate with the countries and ensure that they have a common market. Increased trade with such countries will lead to a great shift in trade towards more deals going to China.
The US is likely to lose a lot of trade deals if it does not liberalize its economy and ensure that it makes deals that are fair to its economy and the other trade partners. China is making deals that lead to a win-win situation for the trade partners. While the US may be seeking to make deals that only benefit it more, it may lose many of the trade deals to China. The US has to accept the global trade deals importance and be prepared to make deals that boost its economy and that of the other trade partners.
In conclusion, the China trade deal will be a great loss for the US because it will have lost EU market. If US does not implement the TPP deal as president-elect Trump suggests, China will take advantage and make deals with the countries (BBC News, 2016). This will mean the loss of jobs for people in the US as companies will have less market to export to their products to. The US has to change the decision and make deals that benefit its trade partners and itself equally.
References
BBC News. (2016). TPP: What is it and why does it matter? – BBC News. Retrieved from http://www.bbc.com/news/business-32498715
European Commission. (2016). China – Trade – European Commission. Retrieved from http://ec.europa.eu/trade/policy/countries-and-regions/countries/china/
Office of US Trade Representative. (n.d.). Free Trade Agreements | United States Trade Representative. Retrieved from https://ustr.gov/trade-agreements/free-trade-agreements
