Sunday, March 14, 2010
More on Trade
The fact that free trade is even debated is very frustrating to economists. We can all prosper by free trade, but politics often get in the way. This article is more evidence of this. (More of this has been talked about in the past, for more info look to the "trade" label at the end of the article).
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Becca Keener American Economy Sect. 2
ReplyDeleteThe idea of exporting more American goods is a good one, but actually succeeding in doing is what is being questioned. If other nations are raising taxes on American imports into their nation, they are working against us in what we are trying to accomplish. I think we need to think of what is best on a national level and have an agreement, because if nations keep working against each other, progress will not be made anyways. A compromise of some sort needs to be made. Then maybe both America and other nations will be benefited in some way, as opposed to neither really benefiting in this battle over trade. Free trade has always been seen as beneficial and the best way to go about trade for the United States. Either we need to get other nations to see it that way or a compromise must be made.
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ReplyDeleteI agree, trading is beneficial to a country when countries are willing to work together. Although a country may not have an absolute advantage in producing a good, there is almost always a comparative advantage. In most cases, a country will be "more better" than another at producing a product. If a country has a comparative advantage over the US in producing some good, the government should allow free trade. This would allow the US to produce goods more efficiently, giving up production of the traded good but purchasing it at a cheaper price. However, as the comment before this states that it wouldn't be much help if other countries heavily taxed American imports. There has to be an agreement that benefits both parties.
ReplyDeleteThe issue with free trade internationally involves the compliance of all nations trying to benefit. In the case of the United States, we are trying to up our exports by double of what we are doing now; however, accomplishing this has be proven to not as easy as presumed. Some countries would prefer to raise the price of certain goods incoming to their nation from the United States, thus benefiting them and not us. Being able to set guidelines and certain agreements on the stipulations of "trade" need to be specified in order for both enhance their economies in these cases.
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