Mutual Advantages For Trade Between Usa And Mexico - Research Paper Example

? MUTUAL ADVANTAGES FOR TRADE BETWEEN USA AND MEXICO ALONG SANTA FE TRAIL Introduction Trade between countries and regions is a recent phenomenon invented by globalization, as claimed by many. The evidence of such transactions can be found in fiction as well as facts, from story books and books on history alike. It is true that the commodities exchanged and the mode of exchange may have been different but trade was as common a occurrence in olden times as is today. In olden times, however, trade was so decentralized. There were specific regions or geographical belts along which trade flourished. One such belt was the Santa Fe Trail that was a thriving business site between USA and Mexico where trade transactions took place on a large scale. The aim of this paper is to analyze the trade relations that existed between US and Mexico in the 18th century, along the Santa Fe Trail and thus, the benefits from that trade to both the parties involved. An attempt will also be made to study the evolution of these trade ties between them from olden times to the present day of globalization. Origination of Trade Relations between the United States and Mexico along Santa Fe Trail It all began with the overthrow of the Spaniards in Mexico City and the advent of Americans under the leadership of William Becknell. The Spain-occupied Mexico was a closed economy that had limited interactions with the outside world. With the removal of the Spaniards, trade borders were broken and the Mexicans welcomed the people from the west to pursue trade along the Santa Fe Trail that spans from Missouri through Gardner, to Baldwin, Overbrook, Burlingame, Council Grove, Romona, Tampa, Durham, Durhman, McPherson, finally ending at Dodge City, Kansas.1 Even though the dangers lurking along these borders were many, the gains from trade were equal making the prospect of trading in those regions irresistible. Santa Fe Trail, in those days, was a Mexican settlement with a population of two to four thousand people, mostly poor. One-storied, thick-walled mud houses built in the Spanish style, were seen everywhere. Stores of all sizes big and small, were at the centre of the town. With the advent of Americans, these stores came to be occupied by American traders. The import-export of goods between America and Mexico was present even in those days. Goods were sold at high profit by the Americans. The minimum price of a good was 5 cents and 10 cents was considered to be an eighth of a dollar. This shows the devaluation of other currencies in comparison of the US Dollar was prevalent even then. 2 Benefits from Trade in the 18th Century “The Santa Fe Trail developed into a complex web of international business, social ties, tariffs and laws”.3 The Americans exchanged merchandise, horses and oxen in return for silver bullions from the Mexicans initially. With deepening of friendly relations and growth of trade between the Americans and Mexicans, the variety and volume of trade grew, too. The shrewd Americans identified the need for cotton prints, factory products, latest gun and ammunitions and whiskey of the Mexicans, which they supplied profitably. On their return back home, they purchased wool, buffaloes, hides and horses, mules, gold coins, gold dust and silver from the Mexicans which earned them great revenues, in turn. Thus, what followed was symbiotic relation between the two countries through a series of trade transactions.4 Apart from the material aspect to these transactions, there were other benefits as well. Due to the long period of trade between these two countries relations formed between the white men and the native women of Mexico and many of them married these native women Dr. Eugene Leitensdorfer from Missouri, married a Mexican women named Soledad Abreu, who was the daughter of a former governor of Mexico.. This proved to be advantageous for the Americans as these women worked as labor in their fur and skin trade. They also served as mediators between the Mexican men and their business partners.5 Americans who maintained good terms with the Mexicans in high ranks were often exempted from laws banning foreigners from retailing goods in Mexico and thus, they became not just wholesale suppliers of goods but retailers, too, giving them a higher level of profit.6 The gains on the Mexican part were an increase in the economic growth rate of economy as output and revenue both grew. This was due to the fact that the factory products imported from America included such tools and instruments that aided in production. Along with this, there was a surge in employment opportunities for the natives as the demand for labor increased due to increase in trade. There was an overall growth effect from this continued trade following the virtuous circle of trade through increased output and income, the effect of which was transmitted to other sectors and finally, overall growth that led to further trade. However, after trade relations had lasted for a considerable period of time, the Mexicans began to wonder if the price for this growth was outweighing its benefits. It was evident that the Americans were gaining far more from the trade than the Mexicans. The net result was a transfer of wealth to the west and by the time the Mexicans realized this, it was too late. The indigenous traders had been completely uprooted by the foreigners and the Americans exercised abundant power over the native markets. Trade Equations between the United States and Mexico in the 20th Century The congenial trade relations between the two countries have remained unchanged till this century. Mexico is the second largest exporter of US exports and around 11% of its exports are from US. It is also the third largest trading partner of US forming 10% of US imports and these figures are still rapidly increasing. Around 82% of Mexico’s exports go to US and the trade between them has grown in the last ten years. However, even today the US maintains trade advantages over Mexico as Mexico can never match US in terms of efficiency and productivity. Thus, the exploitation of Mexico by US too remains unchanged and US is the ultimate gainer. Conclusion It can be concluded that the trade relations between US and Mexico has remained strong from the 18th century along the Santa Fe Trail till present day. However, the trade between them is highly disproportionate with the US reaping the maximum rewards. However, this scenario may be altered by the adoption of adequate policy measures by the Mexican government. References Craver, Catherine W. “William Becknell and the Santa Fe Trail” in Term Paper Resource Guide to Nineteenth-Century US History,2008. http://www.bicknell.net/sftrail.htm (1 September, 2011) Craver, Catherine W. “Kansas History by Kansas Patriots” in Term Paper Resource Guide to Nineteenth-Century US History. 2008. http://www.kspatriot.org/library/khnsantafetrail.html (2 September, 2011) David, Dary, The Santa Fe Trail: Editorial Review. UK: A.A. Knopf, 2000 Hyslop, Stephen G. Bound for Santa Fe. USA: University of Oklahoma Press, 2002. Hanin, Hunt and Ursula Carlson, “The Santa Fe Trail” in Trails of Historic New Mexico. 2009. www.sangres.com/history/santafetrail/index.htm, (2 September, 2011) Richard, White It’s your Misfortune and None of My Own. USA: University of Oklahoma Press, 1993. Read More