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Tuesday, May 8, 2007
U.S. Trade in 2002 with Countries of Current and Proposed Free-Trade Agreements
U.S. Exportsto Countryin Billionsof Dollars
U.S. Importsfrom Countryin Billionsof Dollars
U.S. Exportsto Country asa Percentageof Total U.S.Exports
U.S. Importsfrom Country asa Percentageof Total U.S.Imports
Agreements Already Implemented
U.S.-Israeli Free Trade Agreement
5.3
12.4
0.8
1.1
U.S.-Canadian Free Trade Agreement
142.5
210.5
22.6
18.2
North American Free Trade Agreement (Mexico only, excluding Canada)
86.1
134.1
13.7
11.6
U.S.-Jordanian Free Trade Agreement
0.4
0.4
*
*
Agreements Negotiated but Not Yet Ratified
U.S.-Singaporean Free Trade Agreement
14.7
14.1
2.3
1.2
U.S.-Chilean Free Trade Agreement
2.3
3.6
0.4
0.3
Agreements Under Negotiation or for Which Intention to Negotiate Has Been Announced
U.S.-Central American Free Trade Agreement
Costa Rica
2.9
3.1
0.5
0.3
El Salvador
1.6
2.0
0.3
0.2
Guatemala
2.0
2.8
0.3
0.2
Honduras
2.5
3.3
0.4
0.3
Nicaragua
0.4
0.7
*
*
Subtotal
9.4
11.8
1.5
1.0
From the long lists of free trade agreements between US and lots of different countries, we can see that more and more free trade agreements are negotiated around the world. Before the free trade agreements are so thrive, multilateral negotiations under the WTO are most important for countries to pursue the objective of trade liberation. By the way, the international trade liberation is the elimination of artificial barriers and other distortions, like tariffs, quotas subsidies that countries use to protect their domestic industries from foreign competition to trade. However in recent years, US and other countries have begun to negotiate free-trade agreements to eliminate almost all trade restrictions and subsidies, with various individual countries and groups of countries.
I think the quick progress of the free trade agreements between countries in recent years is mainly due to the strong desire for lots of countries to increase foreign trade and develop their economy in a more convenient way. As we know, that multilateral negotiations under the control of WTO are a bit complicated. There are too many rules of the WTO that countries have to obey. And too many procedures have to go through before a negotiation would be done. While free trade agreements between individual countries are more free, detailed and convenient although certain criteria have to be met as well.
Free trade agreements, very obviously, can help countries develop their economy in one way or another. For example, reduction in trade barriers increases the competitiveness of imports from other countries not only relative to domestic production but also relative to imports from other countries. It is easy to understand that if the price of the import is lower than the domestic cost of producing the same good after the reduction of the trade barriers, it’s economically beneficial to the country. Although as an importing country which every country has a role to act as, it is not so beneficial since the competitiveness is so intense after the reduction of trade barriers of other countries, the overall result is beneficial to the country’s economy since every country has so many choices to export their products to other countries with small barriers. It is said that ultimately, negotiating individual free trade agreements with all the countries would benefit all the countries around the world.
But it is true that free trade agreements benefit all the countries in the world? Obviously the answer is no. Since it is possible for free trade agreements divert the world away from multilateral trade liberation and lead to the development of large, competing trading blocs-the United States, the Western Hemisphere, the EU and Japan, it would give those powerful countries too much advantages in negotiation with individual countries, especially small developing ones. The result of such unequal bargaining power can be significant trade restrictions by the large countries remain in place. Further, if small countries individually negotiate disproportionate concessions in free trade agreements, it may be difficult to rectify the situation multilaterally in WTO talks since the small countries would no longer have anything of substantial interest to trade away to the large countries in exchange for the latter eliminating their remaining significant barriers.
Although free trade agreements might bring some bad effects to small developing countries, their benefits to lots of countries’ economies cannot be neglected. But whether free trade agreements is an advisable path to take to the final goal of multilateral free trade is difficult to judge. Economic reasoning alone is not powerful enough. Other factors such as foreign policies are important as well. Minyun_Economic Expert
Globalised @ 12:01 PM
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