Any given country cannot be self sufficient by relying only on its own resources to meet the demand of the population presently and in the future. The way the earth was created is amazing in that every nation has something unique that identifies it and every nation must have a need for something that is not available in it but is readily available in another country. In other words every country is endowed with different resources and it has to trade with other countries to obtain what it lacks. The United States is known for its vast human resource and capital resources, African countries are known for their natural resources, while European and Asian countries have natural, human and capital resources. Above all there are different resources in different countries and to satisfy demand a country must rely on other nations.
In production of goods, different countries have different opportunity costs, this means the amount of another good or service which might have been produced. Countries strive to produce goods which have a lower opportunity cost to them thereby producing more of this good to trade with other goods from different nations that have a high opportunity cost. Countries also have absolute advantage when they produce more goods with the same resources than other countries and hence they trade the surplus goods for goods that other countries produce. The bottom line is that international trade is healthy for any countries economy, even that of the United States.
The WTOs decisions can so often affect domestic trade, destroy jobs and create new industries. The WTO has rubbed the shoulders of special interest groups wrongly, especially the environmental nongovernmental organizations which allege that WTOs interests, policies and actions are working against the interest of the environment. This led to massive protests in 1999 in Seattle during the WTOs ministerial meeting where the environmental nongovernmental organizations joined other special interest groups such as the human rights activists, anti-globalization groups and the labor organizations in the protests. In order to make the WTO more relevant, there is need for enforcement of its commitment and its decisions, it should address the issue of countermeasures, there should be reforms in the dispute settlement mechanism and it should improve its mechanisms for detecting illegalities in trade practices and impose stiff penalties to those found not to be adhering to its rules and regulations.
Factors that may cause the U.S. dollar to depreciate against other currencies around the world include the trade deficit that the U.S. has where the demand for foreign goods increases the demand for foreign currency which decreased the demand for the U.S. dollar. Another factor is the budget deficit where the U.S. may spend more than is collected in taxes and earned from other sources. This leads to the country “borrowing” from its citizens and other foreign entities in form of government bonds. This leads to increase in a countries debt load and the currency might depreciate from lack of confidence in the country to clear it debts and also by borrowing from other countries, the U.S. increases the demand for other currencies thus decreasing the value of the U.S. dollar.
