NAFTA
One of the key contentious issues in the recently finished United States presidential elections from members of both parties was that of ending the free trade agreements. Free trade takes into account the lack of restrictions on imports or exports by government administrations. Therefore, there is the free flow of goods and services to and from nations based on the market demand and supply. In the contemporary, the United States has effective free trade agreements with twenty nations. One of the major key trade agreements for the nation is the North American Free Trade Agreement, which delineates the guiding principles for transnational trade with Mexico and Canada (International Trade Administration). The purpose of this paper is to discuss the costs and benefits of free trade and the impact on the United States if the deliberations on ending free trade agreements come to fruition.
Creative Destruction and Impact on the U.S. Economy
Creative destruction takes into account the continuous product and process invention mechanism by which new production divisions supplant and substitute obsolete products. This practice of reformation infiltrates key features of macroeconomic performance, and not just growth in the long-run but also economic changes, structural adjustment, and the operating of factor markets (Hart 22). The benefits of NAFTA are that consumers and companies in the United States have greater mobility, a more extensive variety of choices and a better opportunity to go after their own specific vision of happiness. For instance, businesses are able to move where they can obtain cheaper labor, lower tax rates and greater innovation. In addition, investors are able to capitalize their funds in places with greater returns and in expanses that have less arduous regulations. All in all, consumers and businesses are able to attain all of these through creative destruction based on technology and innovation (Boston Fed 5).
However, creative destruction does have its shortcomings. One of the downsides of creative destruction is the aspect of inequality. In particular, creative destruction does not generate results that are consistently constructive or have benefits that are shared comprehensively. Lives end up becoming disordered and livelihoods are lost, particularly in older industries and towns, where individuals experience a greater proportion of destruction and prized little creation (Boston Fed 5). For instance, with respect to NAFTA, when companies relocate to Mexico, several Americans lose their jobs and may suffer dislocation and disruption as an outcome (Lindsey).
The level of industrialization of the SEA countries also varies largely but this can be attributed to the difference in the size of the domestic market of each country or region and their overall level of development on the economic front. Singapore and Indonesia have benefitted largely from the creation of the ASEAN since these countries are the larger of the SEA countries. Malaysia has also benefitted as a
Free Trade Trade is the exchange of goods or services, and international trade is the same when it crosses international borders. Trade across borders traditionally has been subject to trade barriers such as quotas, taxes, tariffs and duties. Modern trade theory rests on two key platforms. The first is Ricardian trade theory, based on comparative advantage, where both parties in a trading arrangement can enjoy a higher net level of trade
However, each stakeholder has its own interests at heart. Those interests in the long-run may be served by freer trade, but in the short-run they are driven more by political considerations. Works Cited Markheim, Daniella & Rield, Brian M. (2007) Farm Subsidies, Free Trade and the Doha Round. The Heritage Foundation. Retrieved December 11, 2008 at http://www.heritage.org/RESEARCH/BUDGET/wm1337.cfm Chang, Ha-Joon. (2007). Protectionism...the Truth on a $10 Bill. The Independent. Retrieved December 11, 2008
Free Trade Agreements Are free trade agreements a good policy for nations? Given that there are 200 free trade agreements in place globally, there are clearly benefits, but what are the negatives? This paper explores the positives and negatives of free trade agreements, and this paper delves into the NAFTA pact between the U.S., Canada, and Mexico, for the upsides and downsides of that agreement. What are Free Trade Agreements and why
Free Trade Zones Using Nissan Motor Mfg. Corp. VU.S. answer: Why Congress establish Free Trade Zones? What advantages Nissan assembling autos FTZ? How argue FTZs community? Reasons for the Establishment of Free trade Zones (FTZ) In the United States, free trade zones establishment is to provide procedural efficiency for firms wishing to engage international trade activities. The establishment of free trade zones by congress is for exempting operators in these zones or sub-zones
Also, the importation of technology from abroad exposes consumers and producers alike to the innovative use of vehicles, such as hybrid technology, that domestic producers can implement even better than the original manufacturer. Innovation is the ultimate driver of new sales and the creator of new markets and new markets means more jobs for workers. Beginning a trade war by setting tariffs or limiting imports through quotas ultimately creates waste
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