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Japan also emerged as a significant economic power through practicing strategic trade policy

Japan also emerged as a significant economic power through practicing strategic trade policy

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Japan also emerged as a significant economic power through practicing strategic trade policy, which accepted some free market principles, but espoused government intervention through subsidies to export-industries, which would lower production costs for the industry, making the exports more competitive on the global market. OPEC also emerged at this time as a significant challenger- imposing an oil embargo on the United States in 1973. This led to tremendous costs for the United States and inspired other developing states to stand up to the West. The newly independent developing world also challenged the United States. Against the free trade policies of the Bretton Woods system, the developing world formed the G-77 and proposed the New International Economic Order (NIEO) – a program that advanced protectionist economic policies with the intention of developing the Third World independent of the Western dominated global economy. Many of these challenges were supported by petrodollar recycling – OPEC states made
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Unformatted text preview: large profits during the oil shocks, which they put in banks, who then loaned money to the developing world, allowing them to pursue independent and costly development programs. The 1980s – the United States rebounded through unilateral free trade liberalization under Reagan (along with the UK, under Thatcher), increasing interest rates, which contributed to the emergence of the World Debt Crisis in the early 1980’s that halted development in the Third World and increased the debt of the developing world to the developed world. The current age of globalization occurs under the aegis of American unipolarity. However, many would argue that American power is again in decline – the wars in Afghanistan and Iraq have sapped American military power, the economic crisis domestically has hurt the US’s position. Many argue that other powers are rising to challenge American dominance – China, for example....
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