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Discussion question - Essay Example

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The American government has had a share of both positive and negative implications following its move to open up trade by removing trade protection limiting import and export trade between concerned partners in NAFTA. The North American Free Trade Agreement (NAFTA,) was…
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Download file to see previous pages... Consequently, the American government suffered a reduction in the level of its exports alongside other effects like a state of consumer’s surplus. In addition, this resulted to high rate of unemployment among the unskilled and semi skilled personnel. With the many provisions availed through NAFTA, member countries have tried to gain comparative advantage with regard to import and export trade. For instance, the agricultural industries benefited following NAFTA provisions of 1989, which abolished tariffs put on agricultural produce traded between the Canada and the United States, with a few exceptions for items covered by tariff-rate quotas, which were removed by January 1, 1998. This free trade attracted Import-competing industries that concentrated in goods once produced by firms mentioned previously. On the other hand, the growth of companies demanding high skills resulted in what has been termed as off shore outsourcing. This program took in many immigrants and offshore outsourcing companies estimated to be more than a quarter of the entire American labor force. Opponents of this program express their discomfort insinuating that it has wreaked havoc in the lives of most Americans. We can simply say that Consumer and producer surplus felt today is a result of the loss of low-skilled manufacturing jobs and increase in high-skill industries jobs both of which affects the American nation.
The employment effects of the North American Free Trade Agreement: recommendations and background studies. (1992). Washington, D.C. (1522 K St., N.W., Suite 300, Washington 20005): National Commission for Employment ...Download file to see next pagesRead More
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