Preview

TRANS-ATLANTIC FREE TRADE AGREEMENT

Satisfactory Essays
Open Document
Open Document
627 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
TRANS-ATLANTIC FREE TRADE AGREEMENT
1 Introduction

Since Adam Smith wrote about “Free Markets” in his magnum opus “The Wealth of Nations”, economists, capitalists, as well as market socialists are aiming for country-systems where trade happens without governmental, or any other interference, no tariffs or any other barriers. The goal of free trade areas is to eliminate exactly these hurdles for free trade. Free trade areas are trade blocs consisting of states who signed a Free Trade Agreement (FTA) which eliminates things as tariffs, import quotas and preferences on, in the best case, all goods and services between them. The goal of such FTA’s basically is to reduce barriers to exchange so that trade can grow. The reason why trade can grow is because of specialization, division of labour and the most important thing, comparative advantage. The next step of a FTA would be a customs union, which has a common external tariff. Members of FTA’s are free to set their own external tariff.
The TAFTA, the Trans-Atlantic Free Trade Agreement, is herefore a proposal for a FTA between the US and Europe, as shown in Picture 1. Other possible members of this FTA could be the European Free Trade Agreement (EFTA) and the North-American Free Trade Agreement (NAFTA).
Such proposals like this have been made almost 20 years ago, but in February 2013 the president of the United States, Barack Obama, came up with this topic again in his State-of-the-Union speech. Since then, negotiations for the so-called Trans-Atlantic Trade and Investment Partnership (TTIP) are ongoing. (LabourNet, 2013)
This report aims to find out the advantages or disadvantages for the United States such an agreement or partnership would bring with it.

Picture : Member States of the TAFTA

2 Importance of the FTA
2.1 Importance for the United States
Free Trade Agreements (FTA) have proved to be one of the best ways to open up foreign markets to U.S. exporters. Trade Agreements reduce barriers to United States (U.S.) exports, and
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Powerful Essays

    Nafta and Its Effects on Robeson County
    • 2468 Words
    • 10 Pages

    Nafta and Its Effects on Robeson County

    Since being signed on January 1, 1994, NAFTA (North American Free Trade Agreement) has opened opportunities between the United States, Canada, and Mexico. NAFTA is considered by GDP standards the largest free trade area. In 2008, all tariffs between the countries involved were completely eliminated. From 1993 – 2009, trading cost has tripled from $297 billion to $1.6 trillion.…

    • 2468 Words
    • 10 Pages
    Powerful Essays
    Read More
  • Good Essays

    Pros And Cons Of Nafta
    • 553 Words
    • 3 Pages

    Pros And Cons Of Nafta

    In January 1, 1994, the North American Free Trade Agreement (NAFTA), a state-of-the-art market-opening agreement, came into force. Since then, NAFTA has systematically eliminated most tariff and non-tariff barriers to trade and investment between Canada, the United States, and Mexico. By establishing a strong and reliable framework for investment, NAFTA has also helped create the environment of confidence and stability required for long-term investment. NAFTA was preceded by the Canada-U.S. Free Trade Agreement.…

    • 553 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Harvey N M2 A2
    • 621 Words
    • 2 Pages

    Harvey N M2 A2

    Peter Hann describes free trade as, “generally considered by economists to be beneficial to international trade by encouraging competition, innovation, efficient production and consumer choice” (Hann, 2011 para. 1). Free trade allows freedom of international exchanges; with this there are advantages as well as disadvantages. Some advantages consist of cost advantages, factor earnings, cheaper imports, and an enlarged market (Chand, 2015). Cost advantage allows free trade to warrant a portion of possessions and resources. This in turn leads free trade into the most efficient conduct of economic affairs. Factor earnings and cheaper imports allow production factors to increase while import rates decrease. Enlarging the market is an advantage of free trade because it increases the market allowing labor to be possible. The disadvantages of free trade consist of all countries being in conjunction and working together. Meaning it will only work and be productive if all countries participate, if there is one country that decides not to partake in free trade, it will not work. It is also unfair to and creates a disadvantage to countries for those countries that are unable to compete with larger, advanced countries (Chand, 2015).…

    • 621 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Nafta Cons
    • 199 Words
    • 1 Page

    Nafta Cons

    The North American Free Trade Agreement (NAFTA) is an agreement between the United States, Canada, and Mexico to eliminate trade barriers and stimulate economic growth in these countries. This agreement, signed in 1992 effective January 1, 1994, created one of the world’s largest free trade zones. The anticipated benefit of having NAFTA was to create jobs in the three countries, for economic growth for the countries involved, and to give consumers better pricing and selection of goods desired to purchase. Since its inception in 1994, this free trade agreement has continued to be controversial, depending on the perspective in which it is being evaluated. Currently there are media reports that the agreement may be overturned because it does…

    • 199 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Good Essays

    The Pros And Cons Of NAFTA
    • 478 Words
    • 2 Pages

    The Pros And Cons Of NAFTA

    NAFTA is categorized as one of the largest formed trading blocs. Despite the expansion and diversification in the economies of member states, there has been quite a number of setbacks as a result of the enactment of the trading platform. NAFTA'S focus was to reduce tariffs among member states namely Mexico, Canada, and the United States over the years, making it easier to trade goods across national borders, and increasing economic efficiency in North America.…

    • 478 Words
    • 2 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    International Trade Social Justice + Equity Implications
    • 250 Words
    • 1 Page

    International Trade Social Justice + Equity Implications

    * Regional Trade Agreements link individual countries or regions, and are a good arrangement between equal partners with similar-sized economies. But when a rich country has a trade agreement with a poor one, the richer, stronger economy always benefits – particularly in Free Trade Agreements (FTAs), which often remove the poor country’s right to use tariffs and quotas to protect its own industries and farms from cheap imports.…

    • 250 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Powerful Essays

    Nafta Pros And Cons
    • 1106 Words
    • 5 Pages

    Nafta Pros And Cons

    NAFTA is the North American Free Trade Agreement, a treaty between Canada, Mexico, and the United States that has been in effect since 1 January 1994. The agreement was designed to increase trade among the three nations by reducing or eliminating restrictions on commerce, such as tariffs and import quotas. It is one of the most powerful and wide-reaching treaties in the world, governing the entire spectrum of trade and commerce on the North American continent. Although it was designed to benefit its member nations economically, it has been the subject of controversy since its inception.…

    • 1106 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Good Essays

    How the Canadian Economy Is de
    • 2176 Words
    • 9 Pages

    How the Canadian Economy Is de

    The Free Trade agreement is between the United States and Canada. The Free trade agreement came into effect in 1989 even though three fourths of trade between Canada and the United States was already free. This agreement to Canada is huge because it set up a free trade zone between the U.S and Canada, which is the largest free trade zone in the world. The Free Trade agreement is huge to Canada because 20 per cent of Canada's GDP comes from exports to the United States. This agreement eliminated "all trade restrictions such as tariffs, quotas, and non tariff barriers." The Canadian economy gains access to the U.S economy that is ten times its size. While the U.S economy will gain the lower-priced Canadian goods.…

    • 2176 Words
    • 9 Pages
    Good Essays
    Read More
  • Good Essays

    The Pros And Cons Of NAFTA
    • 810 Words
    • 4 Pages

    The Pros And Cons Of NAFTA

    The North American Free Trade Agreement (NAFTA) is a treaty that lays out the fundamental basis for economic prosperity and economic cooperation between Canada, Mexico, and the United States. The implementation of NAFTA has encouraged several economic policies, such as trade liberalization, which in turn have produced several economic benefits, ranging from significant economic growth to the production of jobs in the three nations. However, NAFTA has produced controversy with the possibility of the revocation of the agreement as a whole due to the lack of cooperation amongst the three nations. The trilateral negotiations of NAFTA require international cooperation amongst the parties to increase the effectiveness of the agreement and to ensure…

    • 810 Words
    • 4 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Globalization Chapter 1 Study Guide
    • 427 Words
    • 2 Pages

    Globalization Chapter 1 Study Guide

    The Number of free trade agreements signed between the United States and other Countries Allowing free Trade. For example the North American Free Trade Agreement (NAFTA), that includes all North American Countries. Other major free trade agreements are held with China, Japan and Russia. These free trade agreements allow the flow of goods and services to reach all parts of the World, which in turn generates a Global economy.…

    • 427 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Gains from Trade Using Supply and Demand Analysis
    • 782 Words
    • 4 Pages

    Gains from Trade Using Supply and Demand Analysis

    Free trade, interchange of commodities across political frontiers without restrictions such as tariffs, quotas, or foreign exchange controls. This economic policy contrasts with protectionist policies that use such restrictions to protect or stimulate domestic industries. In this article I will discuss the positive and negative effects of free trade. Trade can lead to an improvement in overall economic welfare if countries specialize in the products in which they have a production advantage. Trade allows businesses to exploit economies of scale by operating in international markets. International competition stimulates higher efficiency and reduces monopoly power. Trade enhances consumer choice and international competition between suppliers helps to keep prices down. Trade in ideas stimulates product and process innovations that generates better products for consumers and…

    • 782 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Opportunity Cost From Your Day-To-Day Life
    • 557 Words
    • 3 Pages

    Opportunity Cost From Your Day-To-Day Life

    Free trade has its downsides like hurting small businesses and having negative effects on employees such as lower wages and bad benefits. When working with other countries in free trade, it could seem one sided if those country are less technically inclined as we are. However, free trade can also have a positive impact. New jobs can be created, there will be lower prices for consumers, and countries that contribute to free trade can benefit from competitive advantage. Even though some countries may not be able to provide technologically advanced products, they can still contribute with other goods such as clothing, food, and other non-electronic merchandise that other countries may not be able to produce as well. Free trade may have its downsides, but it is a very important part of economic…

    • 557 Words
    • 3 Pages
    Good Essays
    Read More
  • Powerful Essays

    Research
    • 13292 Words
    • 54 Pages

    Research

    A Free Trade Area of the Americas: Implications of Success or Failure for the Members of the OAS…

    • 13292 Words
    • 54 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Role of Obama in Promoting Globalization
    • 1116 Words
    • 5 Pages

    Role of Obama in Promoting Globalization

    * The U.S. continues to pursue FTA’s like the FTTA (Free Trade Area of the Americas) to promote free trade and globalization…

    • 1116 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Good Essays

    What Are Some Economic Challenges And Opportunities Of Globalization
    • 724 Words
    • 2 Pages

    What Are Some Economic Challenges And Opportunities Of Globalization

    During the 1980’s, Canadian Prime Minister, Brian Mulroney, was urging the U.S to organize freer trade between Canada and the States. But at this particular time, the United States had ‘protectionism’, meaning that an import coming in from other countries was limited. However, in 1989, The States decided that freer trade was a good idea. President Ronald Regan stated “restricting trade in the long run is bad for everyone, especially for the working people of America”, so the Canada-United States Freer Trade Agreement began. In 1994, Mexico was included in the FTA, which was then…

    • 724 Words
    • 2 Pages
    Good Essays
    Read More

Related Topics