Trade officials such as the European Union’s trade
commissioner, Karel De Gucht, are looking towards creating a trans-Atlantic trade pact between the European Union and the United States. This pact will seemingly increase benefits in
both parts of the world. The outputs
between the two will increase and would keep China out of the loop. They are trying to be more productive and
have more effective products. This
creates competition for China to try and make its own products better.
The products and sectors of automotive safety features and
medical devices are trying to improve throughout these countries. De Gucht and the trade commission are likely
to keep these goals among others. Europe
would like to export different automotive safety features to the U.S. such as
seat belts, steering, and lights etc.
But overall, the trade commission would like to set a standard for all
countries in the trans-Atlantic trade pact.
This trade pact would benefit both the United States and the
European Union. It will allow for better
free trade, allow countries to specialize and create a less diverse, but still
highly technological, product supply.
Since the trans-Atlantic pact will not include large trading companies
such as China or India, the prices of products may rise since there is not as
much of a product supply available.
However, this pact will force those trading companies to keep innovating
to keep up with the high standards of the products traded in the pact. The countries will specialize using their
best assets, modern capital and highly productive and specialized labor.
I dont think that this will cause countries to innovate more but to actually try to innovate to the highest standard around in each field. Since countries each have different technologies each one have a different level throughout all sectors. Also this pact may actually make china produce more not innovate more to prove that they are more productive in making quantity.
ReplyDeleteWhile countries like India and China will need to innovate and make some changes to stay competitive in the global trade market, I do not think that this will significantly hurt them. There will still be a significant demand for products in countries like India and China because of their low cost of labor and continuously growing economy. This agreement will strengthen trade between Europe and the United States, but their will still be plenty of room to trade with countries like India and China.
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