Us Trade Relationschina — страница 3

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Japanese felt that America unfairly blames Japan. Furthermore, Japan complains that American efforts to reduce the trade deficit violate principles that are both imbedded in international law and regularly professed by American trade officials. Diplomatic relations reached a low point in summer of 1995 with parties exchanging threats of trade sanctions amid heated bilateral negotiations that did more to aggravate tensions than to resolve issues (Moon, P. 93). There is a constant cycle where Japan sends its biggest chunk of exports to the United States. The United States sends Japan American products but not at an equal balance. The American economy gets upset because American workers are losing their jobs because the American companies not able to compete with Japanese companies.

For example, the high levels of unemployment in Detroit have been ascribed partially to annual sales of nearly 2 million Japanese cars in the United States (Moon, P.5). This would be of little concern if these imports were balanced by exports that produce employment and profits from American products sold abroad, but during a trade deficit they are not. Then Japan connects this circle back to the beginning of the cycle by investing billions of dollars into the American economy. The Japanese want the American economy to do well, so the Japanese investors will get a good return in their investment in American businesses. Japan depends on U.S. Markets to accept 30 percent of its exports and on American products, which constitute 25 percent of its imports. The trade dispute could

greatly effect the economic relationship as a whole. The United States relies on Japanese capital to supply needed investment funds Japanese investors hold more than $100 billion in foreign direct investment in the united States and a similar amount in U.S. Treasury bonds and Japanese investors depend upon the health of the American economy to generate returns on that investment, (Moon, P. 94). A trade relationship was also built between the US and another Asian country, China. Throughout the past twenty years, many issues and obstacles have also been overcome in expanding trade with China. Expanding US trade with China: Issues, Obstacles, Consequences and Imbalances Since the “open door” policy in the late 1970s, successful trade and investment with China has been a common

goal among American businesses. Along the way, there have been many issues and obstacles to overcome as a business relationship with China has been formed. In light of consideration for China’s membership in the WTO, there are still issues to be dealt with and examined. Through the development of an economic relationship with China, we will attempt to examine the causes and impact of trade imbalances with China, as well as implications of the imbalances and plans for dealing with them in the future. It is important to introduce the guiding principles behind China s foreign trade policies and ways of doing business. These five principles promote mutual respect and sovereignty and territorial integrity: 1. Mutual nonaggression 2. Noninterference in each others international

affairs 3. Equality and mutual benefit 4. Peaceful coexistence 5. Independence and self-reliance According to Hua Guofend in the first session of the fifth National People s Congress (Tung 22), the goal is to supply each other s needs and promote production and economic prosperity among the world s nations. Following principle 4 of peaceful coexistence, the Chinese like to arrive at agreements through a consensus in negotiations or mutual discussions, rather than voting. Mr. John Eaton of E-S Pacific Corporation notes that even though a lot of firms may have been skeptical and think that China is trying to sugar-coat the issue by using terms such as equality and mutual benefit, the Chinese really mean it when they say that a joint venture should be operated according to the third

principle (Tung, 32). The explanation of an imbalance on imports is that countries should only supply something when there is a need, never forcing something upon them. Therefore, if a country can make it rather than import it, they should do so to build up their own economy, according to the Chinese methodology. Principle 5 of independence and self-reliance used to mean economic isolationism during the Cultural Revolution. After 1979, it means that foreign assistance should be accepted as long as it does not impinge on China s national sovereignty. In other words, China is learning by example from other s experience that they should increase knowledge and decrease the time it takes to get this knowledge. Keeping these general principles in mind, one will note that early on in