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U.S. economy and free trade

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Use the link below and watch the video. Then, answer these questions please:

In the 1992 U.S. presidential election, H. Ross Perot claimed that there would be a "giant sucking sound" as jobs left the United States and went to Mexico under the North American Free Trade Agreement (NAFTA). Why and how does free trade help the U.S. economy? How might free trade hurt the U.S. economy? Choose one side of this argument and support your perspective with the theories presented in the attachments and video.

** The Transcript attachment are the words to the video.

http://www.mhhe.com/economics/solman_video_mov/trade_triumph.mov

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Solution Summary

The answer to this problem explains the impact of NAFTA on employment in the US. The references related to the answer are also included.

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Free trade helps the US economy in several ways. The US exports of goods increase and these support a large number of jobs. The US manufacturing goods and services support more than 2.4 million jobs in the United States. In addition, the US agricultural exports support a large number of jobs. Free trade supports more productive and higher paying jobs in the export sector. Free trade also widens the variety of products for purchase by consumers and businesses. In addition, free trade leads to greater investment and more growth.
It is claimed by some that free trade harms the US economy. Those who argue against free trade say that free trade causes adverse balance of payments situation, the imports increase more than exports, and cheap foreign goods ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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