International Trade Causes Negative Effects On Trade Deficits

For every upside, there is a downside, and this certainly is the case for free trade in Canada. The successes listed above, also appeared in the United States and Mexico, which impacted our country. For every job that was created for them, some were lost elsewhere. Ontario, in result of jobs created elsewhere,:

The North American Free Trade Agreement (NAFTA) has boosted the US economy growth by introducing free trade with Mexico and Canada. Since, after the implementation of NAFTA in 1994, US have experienced several favourable outcomes. The imports and exports of agricultural goods, electronic equipment, machinery, automobiles, drugs, oil and minerals have been increased among the NAFTA countries thus giving rise to total profits. The agreement has also contributed in eliminating the unemployment in United States and has controlled inflation rates. NAFTA bloc has also created number of job opportunities in the country. Moreover, the consumer prices have been decreased and income levels of US citizens have been raised due to reduced tariffs and taxes. This paper will discuss the facts and figures since 1993 and show how United States has achieved benefits with NAFTA agreement.

Another issue is export. What proportion of the nation's output that is potentially exportable is in fact exported? One way to address this more narrow question is to begin with the domestic output of the goods-producing sectors of the economy, as measured by the value of final exports of goods, plus change in goods inventories,

In 1994, the North American Free Trade Agreement (NAFTA) was enacted between two industrial countries and a yet still developing nation. This was an agreement that was the first of its kind due to the relationship that the countries had and the investment opportunities that it presented. The United States, Canada, and developing Mexico decided to work towards eliminating most tariffs and non-tariff barriers between the three in order to increase the flow of trade in goods and services. Since its enactment NAFTA has led to the providing of over 40 million more jobs throughout the countries, and it has also tripled merchandise trade between the three participants to an astounding $946 billion USD in 2008 (NAFTA Now). However even then it is still not very clear whether enacting NAFTA was worth the time and effort and in fact the United States may have been better off not having joined NAFTA.

The North American Free Trade Agreement between Canada, the United States, and Mexico continues to be greatly beneficial to Canada and its citizens after twenty-two years since the agreement came into effect in 1994. NAFTA has remained as one of Canada’s greatest assets, increasing trading traffic of goods and services. The free trade agreement benefits Canada because it creates more employment, provides Canadians with more selection in goods, and increases economic growth. The North American Free Trade Agreement brings Canada great leverage and will, in all likelihood, continue to benefit us in the future.

The North American Free Trade Agreement, commonly known as the NAFTA, is a trade agreement between the United States, Canada and Mexico launched to enable North America to become more competitive in the global marketplace (Amadeo, 2011). The NAFTA is regarded as “one of the most successful trade agreements in history” for its impact on increases in agricultural trade and investment among the three contracting nations (North American Free Trade Agreement, 2011). Supporters and opponents of the NAFTA have argued the effects of the agreement on participating nations since its inception; yet, close examination proves that NAFTA has had a relatively positive impact on the economies of the United States, Canada, and Mexico.

These export trade agreements, in the next two decades, will create thousands of available jobs, and also boost the GDP by approximately $25 billion, which benefits consumers, households and economic growth. There are several strategies under the new trade agreement that targets partnership and bring benefits:

“By 1988 three-quarters of Canadian trade was already with the United States” (White 1994). By the time negotiations concerning NAFTA commenced in 1990, proponents of the aforementioned Free Trade Agreement (FTA) were witnessing some of the many beneficial effects that compelled them to lobby for such an agreement. The bilateral trade deal between Canada and United States, was the engine starter for much of the shared substantial economic growth that occurred between 1989 until 2002. Throughout this period of growth “Canadian exports to the United States rose by 221%” (Lessons From NAFTA). The sub sequential growth that was initially sparked by the FTA paved the way for NAFTA sympathizers and proponents as means to promote this unprecedented trilateral trade agreement.

Though the trade agreement between U.S., Canada and Mexico benefits Canada, it also causes negative impacts. U.S. today is the largest export market for Canada as 75% of Canada’s merchandise exports go to the U.S.1 Therefore it is evident that Canada’s biggest source of direct investment and debt capital is in fact, the U.S.1 Being such a heavy partner in trade U.S.’ fluctuation in economy in turn creates fluctuation in Canadian economy.10 This was prominently evident during the time of the United States’ second recession.10 The falling of the American dollar created pressures on Canada as intra regional trade declined from $421 billion in 2000 to $383 billion.1 This in turn resulted in a loss of trade as a percentage of world merchandise exports, from 6.8% in 2001 to 6.1% in 2002 causing the FDI to significantly decline as compared to the European Union at the time1. This not only affected Canada but also affected Mexico by causing 400,000 Mexicans to lose their jobs.

The vast majority (about three fourths) of our trade deficit in manufactured goods is caused by imbalanced trade flows with Asia, as shown in Figure 2. The deficits with Asia are large and rapidly growing, despite very high rates of growth in the region until 1997. Europe and NAFTA were each responsible for about 13% of the deficit in 1998. The U.S. ran a small surplus with the other countries in the Western Hemisphere, and with the rest of the world, in this period. http://www.epi.org/content.cfm/webfeatures_viewpoints_tradetestimony

It is commonly believed that free trade between nations is a mutually beneficial arrangement for all parties involved; indeed, this is held to be an absolute truth. Though free trade is undoubtedly the most effective form of commerce between countries from a purely economic standpoint, increasingly we find that our so-called "free trade agreements" are horribly unbalanced. Indicative of these fiascoes is the North American

     There are various trade agreements the United States have with many other countries and I will do a brief overview of a few of them. The most noticeable one is the North American Free Trade Agreement, which include the United States, Mexico, and Canada. This agreement was constructed and approved in January of 1992 and formed the largest free trade area. NAFTA eliminated and reduce tariffs and non-tariff barriers in addition to comprehensive provisions in the way trade was conducted between these countries.

Being the world 's largest economy, the United States is also largest exporter and importer of goods and services. American economic growth relies heavily on trade. According to a recent report on NAFTA, “Since 1992, nearly 20 million new jobs have been created in the U.S., in part due to the 1994 NAFTA agreement. Total trade between the NAFTA partners -- the U.S., Canada, and Mexico -- rose from $293 billion in 1993 to more than $475 billion in 1997, and has increased since. ” (Bowman, Free Trade). It is obvious evidence that international trade is beneficial to the US economy, at least in the 1990s.

”Free trade policies have created a level of competition in today's open market that engenders continual innovation and leads to better products, better-paying jobs, new markets, and increased savings and investment” (Denise Froning). Though Free trade plays a huge role in the economy today because of what and where it is used. Free trade allows for traders to trade across national boundaries and other countries without government interference. Meaning that traders have very few regulations that allow for them to do this without the government intervening. Free trade makes things for traders much easier and also allows for many more jobs in the US, such as exporting jobs, or jobs in the auto industry and plants. Though there are many

The numerous trade agreements developed between different groups of countries reveal the success of developing such relationships. Countries these trade agreements have reported increased imports and