International Marketing Assessing the Impact Term Paper

Excerpt from Term Paper :

The U.S. companies have benefited from the cost reductions to labor, the significantly lower healthcare costs, and the lower compliance costs if they are privately held with subsidiaries in Mexico. They have also had to pay the price of protecting their factories and employees in an area known for rapid escalation of drug violence as well. In aggregate, between Mexican and U.S. companies, the latter is by far more ahead on both the NAFTA and Free Trade Area of the Americas agreements. As for the comparison of Mexican and U.S. workers, the Mexican workers have an opportunity to gain higher paying jobs and American workers have to contend with their skills becoming more commoditized and work less. The trade policy of the U.S. has been to promote the global relocation of highly commoditized, low risk industries out of the country, which has harmed employment in these sectors while in some cases forcing the industry itself to consolidate and go through a shakeout (DiCaprio, 2010). Both the Mexican and U.S. consumers equally benefit from the lower costs.

Conclusion

The common perception that protectionist mindsets can seriously harm an economy is true when it comes to both agreements discussed in this analysis. Creating a more vibrant, open network across trading partners rather than being so restrictive would do much to make free trade much more of a catalyst of economic growth.

References

DiCaprio, A.. (2010). U.S. Free Trade Agreements and Policy Flexibility: Will New Rules Hinder Industrialisation? Development Policy Review, 28(4), 387-410.

Kim, K.. (2010). Is Free Trade Good for Working Americans: Lessons from North American Free Trade Agreement. The Business Review, Cambridge, 15(1), 33-38.

Sources Used in Document:

References

DiCaprio, A.. (2010). U.S. Free Trade Agreements and Policy Flexibility: Will New Rules Hinder Industrialisation? Development Policy Review, 28(4), 387-410.

Kim, K.. (2010). Is Free Trade Good for Working Americans: Lessons from North American Free Trade Agreement. The Business Review, Cambridge, 15(1), 33-38.

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