SCM paper 13 - Dr. Formby PDF

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Dr. Formby...

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This week we were asked to read a Forbes article on trade agreements, their part in today’s politics, and the basics of what they are and how they have been implemented in the past; we were also asked to answer the accompanying questions: 1.What are current political candidates saying about trade agreements and why? All of the mainstream candidates, Hillary Clinton, Bernie Sanders, Donald Trump, and Ted Cruz are all opposed to international trade agreements, and most are vehemently opposed and will not even entertain trade agreement negotiations. They believe that trade agreements in the past have brought upon a sudden and massive loss of manufacturing domestically as the jobs are moved to one of the trade partners’ countries with much less cost because of the agreement. 2.What are the problems with what economists have been saying about trade agreements? Labor is much cheaper in foreign countries and it is not feasible that we can manufacture all of the imports that we receive domestically. So basically, it is a lose-lose for economists because if the trade agreements are implemented, hundreds of thousands of jobs will be relocated outside of the U.S., and if there are no trade agreements then the U.S. companies would be forced to manufacture their goods at much higher prices which, in turn, would lead to fewer jobs because of the increased cost. 3.What are the alternative explanations of job losses and loss of U.S. competitiveness? One hypothesis is that America is simply losing the ability to compete in the global marketplace. Since the 1970’s and 1980’s globalization has made it much easier for organizations to move and operate from countries previously thought to be too remote or desolate. In addition, the management structures present in the U.S. highly favor share prices and short-term performance over the general long-term well-being of the people and the businesses. This, in turn, has made the now ever powerful wall-street analyst skeptical of any company that is not considering moving to China or other countries where labor looks to be much more attractive, but many times forget to include all of the hidden expenses of moving an entire operation to a foreign country across the globe in which the people don’t even speak your language. 4.What do the authors say should be done? The authors suggest a complete overhaul of economic business models is necessary for sustainable global trade. Learning from past mistakes and changing to best suit the future ahead. Just the recent advent of the smart phone era has changed the face of international trade forever. We are now in a much more connected world where people can communicate across the globe in a matter of seconds. The solutions do not lie in widespread opposition to international trade agreements nor does it lie in adoption of the next trade agreement to come onto center stage. We must be vigilant and strive for constant improvement in all aspects to move forward not only as a country, but as a global community....