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International Trade Agreement And Globalization

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TJ Ifaturoti BUSN 225 Professor Mavubi October 26, 2015 The Unites States of America has long been a country with international trade agreements, such as with: China, Guatemala, Mexico, Canada, and many other countries. The trade agreements have been made due to a few factors; embargos, the cost of manufacturing being less costly in foreign countries, treaties which benefit both trading parties by the elimination of tariffs and other various barriers, increased competition, and reduced import costs. Although there seem to be very few factors listed, there are in actuality many more factors which go into a trade agreement. A prime example of a trade agreement and globalization is the North American Free Trade Agreement (NAFTA) which consists of The United States of America, Canada, and Mexico. The international market is opened up when services, capital, and goods cross America’s borders. Which also opens up opportunities for Americans as well as other foreigners to take advantage of the market place. Buyers are able to take advantage of the least expensive services and goods the market has to offer, as well as the ability to choose the best investments opportunities. NAFTA almost immediately expelled tariffs on a vast majority of goods manufactured by the signing countries. “… countries that are more open to the global economy grow faster… than those that are relatively closed” (Gimpelson, Treisman, 2015). It also called for a gradual elimination of most
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