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International Perspectives by J.C. Scull

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International Trade

Is the U.S. ready to move away from liberalism to protectionism?

globalization…An unbiased explanation of the trade policy options we face today…

Recently and specially during the 2016 presidential election cycle, there has been a great deal of discussion and criticism about both the U.S.’s free trade approach and also the free trade agreements that have either been enacted or are being currently negotiated. This public narrative seems to be based on the sentiment that free trade and free trade agreements are at the expense of American jobs ultimately negatively affecting the economy.

However, what would imply moving away from our current policy of free trade? How would our country change? Would the American people accept the type of changes that would be required to put in place a protectionist or mercantilist policy of trade? If the country moved ahead with a policy change such as this, would our current form of government be able to implement the types of programs needed to make the change from a free market economy to protectionism or mercantilism?

Continue reading “Is the U.S. ready to move away from liberalism to protectionism?”

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ABOUT FREE TRADE AGREEMENTS

 

In recent months a great deal has been made of the impact that globalization, international trade and free trade agreements in particular have had on the U.S. economy. In 1994, NAFTA, the North American Free Trade Agreement came into effect. It was originally sold as “creating one of the world’s largest free trade zones and laying the foundations for strong economic growth and rising prosperity for Canada, the United States, and Mexico.” (NAFTANOW.ORG)

Most people may not be aware, but NAFTA was not the first free trade agreement the U.S. signed with another country. In 1985 the Israel — United States Free Trade Agreement (including the Palestinian Authority) was signed into law. The IUSFT is a trade pact that lowered barriers to trade in some goods while reducing or eliminating duties on merchandise exported to U.S. from Israel, Gaza Strip and the West Bank. Notice that no reduction in duties to U.S. goods exported to this region was included in the pact.

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The Difference Between Free Trade and New Trade

So one of the Chinese professors from Peking University got up and said “Developed countries, including the U.S.A. were once underdeveloped. Mercantilism allowed them to become developed. Now that they are developed they want to push free trade on the rest of the world” — Beijing Symposium on Trade. Tsinghua University — 2012)

Traditionally members of the Republican Party have been proponents of a Laissez-Faire approach to markets promoting unrestricted trade. Democrats on the other hand have been more interested in partnering with unions and labor in order to protect jobs.

However, the last two democratic presidents have been very willing to create free trade agreements those unions, labor and progressives within the Democratic Party have called damaging to the U.S. economy. At this point in time however, it seems that the U.S. is pretty much on board with promoting and practicing free trade on a grand scale.

Continue reading “The Difference Between Free Trade and New Trade”

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