Until the late 1980’s the United States did not pursue regional free-trade agreements, despite the legal rights it had under the GAAT agreement (Textbook, 41). However, the situation has changed in 1985, when the United States signed a bilateral free-trade agreement (FTA) with…
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The benefits of the free trade agreements for the United States and other relevant arguments will be discussed further to support this statement.
First of all, free-trade agreements (FTAs) provide the United States with greater opportunities to open up foreign markets to U.S exporters (Textbook, 41). Reduction of trade barriers and tariffs for export, diplomatic and national security, increased stability and transparency of both investment and trading environment, positive public relations with potential investors – are the main benefits the U.S. and its FTA partner country/countries will gain (Trade.gov, n.p.). As FTA’s involve smaller number of countries, the negotiation process is more flexible and has substantially greater chance for success than multilateral trade negotiations (Ewing-Chow, 264). Not only the United States will benefit from the new FTAs but also the other countries involved. Moreover, some experts believe that the other countries will be even in more beneficial position than the USA due to smaller sizes of their economies (Arnold, n.p.).
Proponents of the multilateral trade agreements and trade liberalization might criticize this position, arguing that this will undermine the role of WTO and Doha Round multilateral trade liberalization agreement. Even though, the WTO has undertaken some efforts and initiatives for global trade liberalization and increased market openness, the final agreement has not been achieved. The Doha Development Agenda, launched in 2001 as the first round of global trade negotiations, has reached an impasse (Francois, van Meijl, van Tongeren, 350). One of the reasons of the series of launch-delays is the divide of the interests of the major players: developed and developing countries (Evenett, 143). With the increased global “weight” of such countries as China, and India, it might be very challenging to reach mutual agreement. Developing countries do not want to being taken advantage of by the developed
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(Should the United States Pursue Free-Trade Agreement Essay)
“Should the United States Pursue Free-Trade Agreement Essay”, n.d. https://studentshare.org/macro-microeconomics/1661821-should-the-united-states-pursue-free-trade-agreement.
Chomo (2006) found that the Qualifying Industrial Zones (QIZs) which was established in 1996 allowed manufactured products from Israel, Egypt, and Jordan to enter the U.S. duty free. Jordan is a developing nation and has a small market due to its small population.
The purpose for countries entering into this agreement can be political, economic, or social, etc. The association of states is based on their geographical location. There are many effects for members of these organizations. Some encounter advantages, while others take their chances, and end up having negative consequences.
Under t NAFTA, various non-tariff barriers to agricultural trade were eliminated between the United States and Mexico. Besides, various tariffs were eliminated immediately, with others being phased out within the period of 5 to 15 years. This paved way for an orderly adjustment to free trade with Mexico following the inception of NAFTA in the beginning of January 1, 2008.
Rules of origin are implemented within a free trade area to prevent re exportation to other countries. A free trade area is formed by free trade agreements. It reduces trade barriers and ensures easy exchange of goods. It is believed that a free trade area increases income and wealth.
("The Columbia Electronic Encyclopedia," n.d.)
With these in mind, there are various reasons that justify my full support for the implementation of the NAFTA. First, it entails the removal of as many tariffs and duties as possible ("Investopedia," 2005).
Strong US Dollar that makes U.S.-made products more expensive to foreign buyers also causes the continued trade deficit. Despite its current trade deficit, American economy is viewed as healthier than other world economies that have been mired by worldwide slump.
This paper focuses on the benefits derived from and downside of the NAFTA for economic participants in the US.
The positive effect of NAFTA can be illustrated citing the bilateral agricultural trade between the US and Mexico for select products. For instance, the US is able to substitute the production of corn and nut at the exchange ratio of .
The argument between protectionism and free trade is at least three centuries old, almost as old as the concept of free trade. It gave birth to two opposing political ideologies - capitalism and socialism. While
I am particular concerned with the potential implications of the FTA for the automobile and other manufacturing industries. I am aware FTA is a bilateral agreement that reduces the tariffs for the purpose of promoting trade between two countries, however,
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