Global Discussion Growth of Regional

Global Discussion

Growth of Regional Agreements in Europe

One of the major reasons behind the slowdown of NAFTA and the lack of expansion in transportation rights and in certain other aspects of the trade agreement is the political/cultural pressure being levied against the agreement by large groups of individuals in North America and around the world. Given the size and strength of the United States' economy, especially prior to the collapse of the nation's housing market and banking industries and the overall global economic recession that ensued, many felt (and feel) that NAFTA and other similar trade agreements with the United States would lead to unfair advantages and gains for the United States while hurting its trading partners or at least leaving them without any real benefits. There is some merit to this argument, as the United States already has a massive trade surplus with Mexico and a still sizeable (though definitely smaller) surplus with Canada. With this current imbalance in trade in the region, many feel that NAFTA is highly exploitative of Mexico especially, allowing goods from, the United States to be exported to the country without generating any profit for Mexico via taxation, while Mexico simply does not have the industry to take advantage of the same situation in reverse.

Whether or not the slowdown of NAFTA will have a major hindering effect on the United States' economic growth remains to be seen. Canada remains one of the United States' largest trading partners despite the NAFTA slowdown, and trade with Europe and Asia -- both of which provide large markets for U.S. goods and which supply large quantities of imports -- will not be affected by NAFTA in any direct way. It is likely that the effects of this slowdown will be negligible, therefore.

The Balance of Germany's Trading Partners

Germany maintains an overall trade surplus of approximately a billion dollars, exporting more goods that are produced in Germany than it imports. As the largest European economy with a still-vibrant industrial and manufacturing sector, this trade imbalance is hardly surprising-it is more surprising, in fact, that the surplus is not larger than it currently stands. When it comes to Germany's specific trading partners, there are also few surprises -- the United States is a major importer of German goods, though it exports less to the Germany than do other nations; Spain, France, and Italy also have significant trade relationships with Germany -- all of them are border-sharing neighbors with the country, and all of them also have a trade deficits, importing more German goods than they export back. Given the overall size of the German and other European economies, however, these trade imbalances with Germany are not actually especially extreme.