POLI 330N Week Current Event Free and Fair Trade or Budgetary Issue

Current Event - Free and Fair Trade or Budgetary Issue

Free and Fair Trade

POLI 330N Week Current Event Free and Fair Trade or Budgetary Issue.

Free and fair trades are two of the most effective ways to maintain a sustainable trade relationship between countries. However, trade wars and hostilities from trading countries lead to different issues such as increasing costs, poor relationships, labor issues, and economic issues. The purpose of this paper is to select and summarize a recent article on free and fair trade between two countries, analyze the trading issue, its impact on the global community, and also evaluate the credibility of the source. 

POLI 330N Week Current Event Free and Fair Trade or Budgetary Issue. The article titled, “Whisky redemption: Biden administration lifts hated tariffs on Scotland’s most famous export” is selected for the paper as it includes both issues of the trade war and Airbus subsidy dispute and effects of free and fair trade on world trade commerce. POLI 330N Week Current Event Free and Fair Trade or Budgetary Issue.The article titled, “Whisky redemption: Biden administration lifts hated tariffs on Scotland’s most famous export” is selected for the paper as it includes both issues of the trade war and Airbus subsidy dispute and effects of free and fair trade on world trade commerce. 

POLI 330N Week 6 Assignment: Current Event – Free and Fair Trade or Budgetary Issue

Summary of the article

After the issue of a 17-year-old harsh trade war between the US and UK over the dispute that the World Trade Organization (WTO) allowed illegal subsidies for Airbus and Boeing manufacturers, which led to billions of dollars of punitive duties on goods led to countries accusing each other of unfair trade. However, this war was ended after the US suspended its punitive duties on goods including single malt whisky (Croft, 2021). 

The issue between 27 European Union nations and US-led to tit-for-tat wars, which resulted in unfair trade tariffs on products even though they had nothing to do with the aerospace sector. Some of the goods were Italian hard cheese, Scottish and Irish whiskey, and French wine (Croft, 2021). 

POLI 330N Week 6 Assignment: Current Event – Free and Fair Trade or Budgetary Issue

The British government tried to resolve the dispute and finally came out of the EU. It declared that it will suspend retaliatory tariffs posed on different goods to negotiate a settlement. Soon after, the Biden administration declared a four-month suspension on punitive goods as a conciliatory gesture to reduce the burden and resolve the dispute. The truce aims to settle disputes over the four months and counter the hurdles created by new entrants in the civil aviation market. However, the global agreement requires the participation of EU countries as they dominate the aerospace market (Croft, 2021). 

After removing the 25 percent tariffs, Karen Betts said that Scottish whiskey makers were jubilant as it would increase trade as previous tariffs decreased trade by 35% and the US is a key market. Boris Johnson stated that it would promote free and fair trade. It will also boost the UK economy. The trade war was affected when Trump imposed extra duties of $7.5 billion on EU products and in retaliation, the EU imposed $4 billion duties. Despite both parties saying that they want to negotiate, nothing happened. The EU spokesperson stated that they too want to end the disputes and proposed suspension of tariffs for six months (Croft, 2021). 

POLI 330N Week 6 Assignment: Current Event – Free and Fair Trade or Budgetary Issue

What is the issue?

In 2004, the US accused the EU of providing illegal subsidies for Airbus and Boeing, which led to the dispute where EU countries would have benefits of over $200 billion. However, the EU replied that only $23 billion worth of subsidy was given for research and development. The conflict led to unfair trading and cases in WTO, which led to the US imposing tariffs on goods worth $7.6 billion whereas the EU imposed $4 billion. 

This unfair trade war affected the global market as the cost of goods such as cheese, cashmere fabric, whiskey, olives, meat, wine, and other goods. Further, this decreased business, which led to lower economic growth. 

Why this issue is important to the global community

The first reason is it affects the global market as goods, which are not related to aerospace sectors also got affected. Both EU countries and the US suffered losses as the US is the most valuable market and EU countries have businesses, which rely on the global market especially the US market (Bie, 2021). Further, the cost of goods increases considerably where neither government benefit from the trade war as importers back off from importing goods. 

The unfair trade practice also affects targeted farmers across the globe as transatlantic trade is controlled by US and EU markets (Croft, 2021). Further, the effects of a pandemic will increase the burden on manufacturers, which will result in the closure of business. This further affects the economy, jobs, and supply and demand chain. As a result, it is a global issue. 

POLI 330N Week 6 Assignment: Current Event – Free and Fair Trade or Budgetary Issue

The credibility of the source

The article is from the global media organization, Fortune, which concentrates mainly on global issues and business. The credibility of the source is high as the source is neutral throughout where the author reported only facts and conducted interviews with representatives from both sides to provide their perspectives. Further, the article only includes quotes from global leaders. Also, there were no personal opinions. As it is news media, the source is trustworthy. 

POLI 330N Week 6 Assignment: Current Event – Free and Fair Trade or Budgetary Issue

My opinion

The move to suspend the tariff is beneficial as COVID-19 has already affected global trade, businesses, the economy, and the livelihood of the people. Suspending tariffs will result in increased trade, which further reduces the cost of the goods (Wittig, 2021). It will also better the diplomatic relationship between countries to adopt better fair and free trade to allow businesses to prosper. It further increases jobs as businesses will be more. As tariffs increase, businesses cut costs by using underpaid labor, malpractices, and illegal trades. However, this issue can be solved by reducing the tariffs (Janes, 2021). 

POLI 330N Week 6 Assignment: Current Event – Free and Fair Trade or Budgetary Issue