International Trade Essay
865 Words4 Pages
What is International Trade? International trade is defined as trade between two or more partners from different countries in the exchange of goods and services. In order to understand International trade, we need to first know and understand what trade is, which is the buying and selling of products between different countries. International Trade simply is globalization of the world and enables countries to obtain products and services from other countries effortlessly and expediently. International trade has been in existence throughout history and has an economic impact on the participating countries. Trade in most countries has a share of the Gross Domestic Product (GDP) and helps to boost the…show more content…
Free Trade is the concept we use when referring to selling of products between countries without tariffs, fees, or trade barriers. Free Trade simply is the absence of government interference or numerous restrictions, which has been labeled as laissez fair economics. Free Trade grants easier access to goods and services, promote faster growth for the economy, and also allows for the outsourcing of production of goods, which hurts the economy. Many believe that the free trade hurts developed countries and nations, due to the loss of jobs by international competition and can reduce the country’s GDP. Overall, free trade agreement with other countries can save time and money and increase participating countries economy.
North American Free Trade Agreement (NAFTA) 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.
NAFTA was born out of the original Canada-US Free Trade Agreement of 1988, which did change the existing agreement concepts, but essentially
- Length: 371 words (1.1 double-spaced pages)
- Rating: Excellent
International trade or world trade affects the entire American economy. The early industrial years of American the economy was based entirely on the exporting goods to other countries, and these exports created the revenue need to sustain the country. America would export more products than it needed this created a surplus in the GDP. This began to change in the 1930’s when the trade began to change and the country began to import more products. This downward trend led the GDP its lowest point in history. In today’s world trade market America’s import percentage is somewhere in the mid-60%. The balance of trade in America today is running in a deficit.
The U.S. government has created trade agreements the various countries that allow free trade between these countries. This means there are no tariffs, fees or taxes applied toward the good being imported or exported between the countries in the agreement. These countries include Mexico and Canada that create the North American Free Trade Agreement (NAFTA), and Israel. These agreements are not limited to free trade, but other countries such as Jamaica, that need assistance in order to grow economically American has lessened the amount of tariffs need to import good into America.
International trade provides resources that the U.S. does not produce enough of to sustain the country. One of the major imports needed in the U.S. today is oil. This is one of the reasons America has a free trade agreement with Israel. This allows oil to be imported without tariffs. Other products such as cars imported from Japan create import taxes that the government spends on the U.S. economy.
Additionally, the U.S. has imposed restrictions on foreign countries to reduce the flood of goods into the market place. These items include textiles imported from countries that produce these items a much cheaper cost.
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International Trade World Trade North American Other Countries Trade Agreements Foreign Countries Various Countries U.s. Government
This decreased cost comes from lower wages paid to workers and lesser working conditions. The restrictions also keep unsafe or inferior products out of the market place. The U.S. has also imposed restrictions against countries not only for economic reasons but also for national security or humanitarian reasons. International trade is necessary for the U.S. to have a stable and profitable market place.