Who US Trades With and Does Not and Why
Trade is the exchange of goods and services for money. Most countries of the world engage in trade as a means of generating extra income to their economies and supplement the tax collected. The current government uses income generated from trade to develop infrastructure, pay salaries to its workers, and provide essential social amenities to its citizens. This paper examines who the US trades with and does not and the reasons behind it.
Some international companies, which are based in USA, are doing business with Latin America due to its large population of about 600 million people (Epstein, 2015). According to Epstein (2015), the number of commodities produced in the US and exported to Latin America
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These countries include China, Canada, Mexico, Japan Germany, United Kingdom, South Korea, France Netherlands, Venezuela and Taiwan. Naranjo (2013) also observes that Netherlands is the eighth largest destination for exports from the US while Venezuela forms the eighth largest importer of oil from the US. These countries contributed to 68 percent of the total imports and 64 percent exports respectively made by the US in 2007 (Naranjo, 2013). According to Villarreal (2015), trade between Mexico and USA is very significant because they share a number of common cultural and social ties and a huge population in Mexico provides a large market for US products. Villarreal (2015) observes the North American Free trade agreements (NAFTA) implemented in 1994 helps the two countries to develop strong economic ties. The number of countries involved in trade between the US and the Sub-Saharan African (SSA) countries is small. In 2007, 81% of the US imports were from three Sub-Saharan countries with Nigeria, Angola, and South Africa contributing 49%, 18%, and 14% respectively (Langton, 2008). Natural resources form the Major US imports from the SSA region. The US imports energy products mainly petroleum, metals, and minerals from the region. In addition to natural resources that form the major imports to the US, transport equipment from South Africa also contributed greatly to US imports …show more content…
This is because the countries are believed to be supporting activities related to terrorism, development of nuclear weapons, and gross violations of human and civilian rights. Terrorism is believed to be one of the main causes of the collapse of most businesses; therefore, engaging in business with these countries that do not uphold these values. The research outlines that North Korea as early 2008 was prohibited to engage in trade with the USA because of its strong involvement with activities related to its obscene military exercises and the development of its ballistic missile programs. Therefore, any activity that could have assisted the country to acquire nuclear to be used from the USA was not allowed. African countries of Sudan, Somalia, and Libya are also not allowed to trade with American companies due to their involvement in activities that undermines human rights and poses a great threat to the security of people in those
Trade is essential to overcome the dollar gap that prevented foreign marketing of United States goods (Melanson and Mayers, 159). There are many economic issues which face the nation at this time. A recovery from World War II and the Korean War, a recession, a change in the political party of the president, and several other issues. Thus, this must be a time of strong economic leadership. The policies made and legislature passed must steer the United States through this apparent storm and give the nation a chance to rest from the hecticness of the first half of the century.
When we look at just a few of the specifics of our trade with the U.S., we find that:
After three years of debate NAFTA was established in 1994. Fears concerning NAFTA included job creation, loss and transfer, wages and infrastructure. (Ganster/Lorey 188-189) However, with the implementation of NAFTA the economy grew. Ganster and Lorey reveal that bilateral trade increased by $211.4 per year from 1989 to 2004. Commerce grew by 20 percent in the first six months of 1994. There were advantages and disadvantages of NAFTA, nevertheless, NAFTA “intensified the integration of the two economies rather than distancing them.” (Ganster/Lorey 190)
The North American Free Trade Agreement—NAFTA—was an important agreement signed between three countries—the U.S., Mexico and Canada. NAFTA played an important role between each of these countries’ relations with one another through imports and exports. Throughout the presidential elections throughout the years, NAFTA has been highly debated on whether or not it has helped benefit the economy of these countries or if it has caused a lot detrimental issues. NAFTA promised many benefits for these countries, but not all of their promises were carried through; many views across the political spectrum also have their indifferences about NAFTA.
Mainly, the United States imports petroleum products and crude oil from Canada 23.3%, Venezuela 10.7%, Saudi Arabia 10.4%, Mexico 9.2%, and Nigeria 8.3%. (e. I. Administration) In addition, approximately 77 other countries import to the United States. (e. I. Administration)
Throughout history, the United States has initiated policies, peace agreements, or laws which were believed to bring prosperity, and success, however those policies as a result were created in the U.S. best self-interest. One of these policies is known as NAFTA, which was a trade agreement created to open up free trade around the globe, however this policy backfired, deeply scaring and deteriorating the Latin American economy, and its people. Specifically, NAFTA known as the North American Free Trade Agreement, took effect on January 1, 1994 was a treaty which entered by the United States, Canada, and Mexico used to eliminate tariff barriers, in order to encourage economic prosperity between these three countries. A quarter century later, the
Many business owners and entrepreneurs are doubtful about the global opportunities available to their business. In other words, business owners don’t give consideration to the world markets, instead they tend think locally in terms of gaining customers. This doubt however is unfounded. The international trade commission reported that 70% of the world’s purchasing power and 95% of the world’s consumers are located outside of the United States, which means that there is a massive market that is currently untapped by 99% of business in America. In addition to doubt, there is the uncertainty about exporting to other countries, this uncertainty may stem from lack of knowledge about foreign trade and the international laws. A business owner may be uncertain about how, when, where, and to whom it is legal to ship their products. Although, this uncertainty is understandable it is not required for businesses that are conducting business legally within the United States, business owners should remain mindful of this so that they can push their uncertainties aside. The last factor that deters businesses from international trade is Fear. Fear that there will be unforeseen and uncontrollable issues with transporting goods such as: theft, loss, damages, diversions, and/or regulatory penalties that may be imposed on the business. Although, there is a
The United States has for over two centuries been involved in the growing world economy. While the U.S. post revolutionary war sought to protect itself from outside influences has since the great depression and world war two looked to break trade restrictions. The United States role in the global economy has grown throughout the 20th century and as a result of several historical events has adopted positions of both benefactor and dependent. The United States trade policy has over time shifted from isolationist protectionism to a commitment to establishing world-wide free trade. Free trade enterprise has developed and grown through organizations such as the WTO and NAFTA. The U.S. in order to obtain its free trade desires has implemented a number of policies that can be examined for both their benefits and flaws. Several trade policies exist as options to the United States, among these fair trade and free trade policies dominate the world economic market. In order to achieve economic growth the United States has a duty to maintain a global trade policy that benefits both domestic workers and industry. While free trade gives opportunities to large industries and wealthy corporate investors the American worker suffers job instability and lower wages. However fair trade policies that protect America’s workers do not help foster wide economic growth. The United States must then engage in economic trade policies that both protect the United States founding principles and secure for tomorrow greater economic stability.
Mexico has a gross domestic product of over $1 million in 2013. The sectors that contribute tremendously to the GDP include Agriculture (5%), services (65%), and industry (28%). The major industries in the country include the manufacturing sector. The country is the source of a myriad of manufactured goods including food, beverages, motor vehicles, clothing and textiles. The country also exports large quantities of oil. The US is also the largest trading partner in Mexico, with a trade deficit of over $49 billion in 2015 (Miller,
Globalization has become one of the most influential forces in the twentieth century. International integration of world views, products, trade and ideas has caused a variety of states to blur the lines of their borders and be open to an international perspective. The merger of the Europeans Union, the ASEAN group in the Pacific and NAFTA in North America is reflective of the notion of globalized trade. The North American Free Trade Agreement was the largest free trade zone in the world at its conception and set an example for the future of liberalized trade. The North American Free Trade Agreement is coming into it's twentieth anniversary on January 1st, 2014. 1 NAFTA not only sought to enhance the trade of goods and services across the borders of Canada, US and Mexico but it fostered shared interest in investment, transportation, communication, border relations, as well as environmental and labour issues. The North American Free Trade Agreement was groundbreaking because it included Mexico in the arrangement.2 Mexico was a much poorer, culturally different and protective country in comparison to the likes of Canada and the United States. Many members of the U.S Congress were against the agreement because they did not want to enter into an agreement with a country that had an authoritarian regime, human rights violations and a flawed electoral system.3 Both Canadians and Americans alike, feared that Mexico's lower wages and lax human rights laws would generate massive job losses in their respected economies. Issues of sovereignty came into play throughout discussions of the North American Free Trade Agreement in Canada. Many found issue with the fact that bureaucrats and politicians from alien countries would be making deci...
A nation that possesses strong industry, a favorable trade balance, and a lack of dependency upon foreign states is optimum. This ideology is one that has been strongly advocated throughout America’s existence, by politicians from Alexander Hamilton to Pat Buchanan. When a nation faces a trade deficit, it means that competing states are producing more efficiently, and ultimately making profiting. Also, a deficit means that industry and jobs, which could exist domestically, are being “stolen” by foreign nations. According to mercantile policy, this is a zero-sum game; when a competitor is winning, we are losing. The United States faces this situation, having evolved from the world’s largest creditor nation during and following World War II to its current position as the world’s largest debtor. Because America imports much more than it exports, an additional 600 billion dollars is needed every year to balance the equation. This money is “borrowed” through the sale of government assets, sometimes to domestic investors, but increasingly to foreign ones. Many circumstances can be blamed for this situation: cheap foreign labor, foreign government subsidy, and closed foreign markets, among others. The question therefore arises: how to negate obstacle...
Few governments will argue that the exchange of goods and services across international borders is a bad thing. However, the degree to which an international trading system is open may come into contest with a state’s ability to protect its interests. Free trade is often portrayed in a good light, with focus placed on the material benefits. Theoretically, free trade enables a distribution of resources across state lines. A country’s workforce may become more productive as it specializes in products that it has a comparative advantage. Free trade minimizes the chance that a market will have a surplus of one product and not enough of another. Arguably, comparative specialization leads to efficiency and growth.
In order for international trade to work well, governments must allow the world market to determine how goods are sold, manufactured and traded for all to economically prosper. While all nations may have the capability to produce any goods or services needed by their population, it is not possible for all nations to have a comparative advantage for producing a good due to natural resources of the country or other available resources needed to produce a good or service. The example of trading among states comprising the United States is an example of how free trade works best without the interve...
The international community have highlighted the benefits that efficient and effective trade in Africa could potentially hold; the G8 in 2005 (and again in...
Central America and the Dominican Republic has become America's tenth largest export market globally with exports to the region totaling $15 billion annually. The American Farm Bureau has predicted that CAFTA could increase U.S. farm exports by $1.5 billion annually (OUSTR, 2005). Other industries, including information technology, construction, paper and pharmaceutical products will also benefit considerably from this agreement.