International Trade Comprehensive Solved Essay Example

International Trade Comprehensive Solved Essay Example

Introduction

International trade allows for the continuous movement of goods and services across borders (Arango Miranda et al., 2020). The trade statistics published by the International Trade Administration (2023) show that participation in international trade has enabled the U.S. to acquire a wide range of products that it may not adequately produce. The U.S. is among the world’s largest trading nations regarding imports and exports of goods and services. Different free trade agreements influence greater trade performance between the U.S. and other countries, such as Canada and Mexico (Baier et al., 2019). This paper outlines the leading U.S. exports and imports in terms of value, major trading partners, and the impacts of free-trade agreements with Canada and Mexico on the current trade performance.(International Trade Comprehensive Solved Essay Example)

What are the leading U.S. exports and imports in terms of value?

The top 5 exports for the U.S. in 2022 include chemicals at $288016 million, transportation equipment at $248967 million, computer and electronic products at $233876 million, oil and gas at $213290 million, and machinery, excluding electricals at $164462 million (International Trade Administration, 2023). On the other hand, the leading imports into the U.S. in 2022 include computer and electronic products at $507949 million, transport equipment at $415960 million, chemicals at $360654 million, machinery except electrical at $237602 million, and oil and gas at $219433 million (International Trade Administration, 2023).(International Trade Comprehensive Solved Essay Example)

Which trading partners are most important to the United States? This can be measured in terms of total exports, total imports, or total exports plus imports.

The most important trading partners to the U.S. in terms of exports in 2022 include Canada at $354994 million, Mexico at $324378 million, China at $153837 million, Japan at $80317 million, and the United Kingdom at $77301 million (International Trade Administration, 2023). Moreover, the most important partners to the U.S. in terms of imports in 2022 include China at $536754 million, Mexico at $454930 million, Canada at $437729, Japan at $148330, and Germany at $146608 (International Trade Administration, 2023).(International Trade Comprehensive Solved Essay Example)

Which countries have the largest trade deficits and trade surpluses with the United States?

China has the largest surplus with the U.S. Specifically, it exported goods worth $536754 million compared to imports from the U.S. worth $153837 million, creating a surplus of $382917 million (International Trade Administration, 2023). On the other hand, Canada has the largest trade deficit of $82735 million. This country exports goods worth Canada at $437729 compared to imports of $354994 million (International Trade Administration, 2023).(International Trade Comprehensive Solved Essay Example)

Find the trading statistics for the U.S. and Canada and the U.S. and Mexico.

Trading statistics between the U.S. and Canada include export worth Canada $354994 million and imports worth Canada $437729 (International Trade Administration, 2023). Therefore, the U.S. has a trade surplus of $82735 million with Canada. For the U.S. and Mexico, the U.S. exports in 2022 were worth $324378 million compared to the imports from Mexico, which were worth $454930 million (International Trade Administration, 2023). Therefore, the U.S. has a trade deficit of $130552 million.(International Trade Comprehensive Solved Essay Example)

When the United States signed a free-trade agreement with Canada (1989), no one thought twice about it. When the agreement with Mexico was signed (1994), there was significant opposition. Use the concepts of inter-industry and intra-industry trade to explain the differences in opposition to the two trade agreements.

The U.S.-Canada Free Trade Agreement (FTA) was signed in 1989 (Crosbie et al., 2022). The primary purpose of this FTA was to eliminate trade barriers in goods and services between the two countries and facilitate the establishment of conditions for fair competition (Arango Miranda et al., 2020). The U.S-Canada FTA received much support from the stakeholders as they perceived it to influence a positive relationship between the two countries. Specifically, the U.S.-Canada FTA was largely based on the intra-trade policy as it provided opportunities for businesses from both countries to benefit from the economies of scale and their competitive advantage (Baier et al., 2019). Evidence from the study by Crosbie et al. (2022) shows that the U.S.-Canada FTA intra-trade in industry group included food and live products, manufacturing products, and machinery and transportation products. Through the intra-trade approach, the U.S.-Canada FTA was perceived to facilitate the production of economic gains between the two countries as it provided workers and firms from the U.S. and Canada to learn and innovate on particular products.(International Trade Comprehensive Solved Essay Example)

On the other hand, signing the North American Free Trade Agreement (NAFTA) in 1994 was largely characterized by a lot of opposition. The primary goal of NAFTA was to eliminate trade and investment barriers between the U.S., Canada, and Mexico (Arango Miranda et al., 2020). The opposition of NAFTA can be assessed in the context of an inter-industry perceptive. Specifically, the enactment of NAFTA led to the potential loss of manufacturing jobs in the U.S., as most jobs shifted from the U.S. to Mexico (Baier et al., 2019). According to Crosbie et al. (2022), NAFTA influenced the movement of higher-paying factory jobs initially found in the U.S. market to more cost-effective trade regions, such as Mexico. Such trends were largely observed in lower-skilled industries such as textile and automotive industries. Although NAFTA achieved its goal of eliminating trade barriers between the U.S., Canada, and Mexico, concerns were still raised about its ability to protect American jobs, which led to significant opposition (Arango Miranda et al., 2020).(International Trade Comprehensive Solved Essay Example)

Given the current trading statistics of U.S. trade with Canada and Mexico, does the opposition to the agreements seem justified?

The current trade statistics show that the U.S., Canada, and Mexico are greatly involved in trading. However, opposition to the NAFTA agreement seems justified from the U.S. perspective but not from the other member states in this agreement. A major concern was the risk of the U.S. losing jobs to other member states, especially Mexico (Arango Miranda et al., 2020). Furthermore, Crosbie et al. (2022) noted that opposition groups generally argued that the enactment of NAFTA was likely to undermine the local governments by limiting their ability to issue regulations and laws designed to protect the public interest.(International Trade Comprehensive Solved Essay Example)

A large number of NAFTA critics perceived the agreement to be a radical experiment specifically developed by influential multinational corporations to increase their profits at the expense of other people (Arango Miranda et al., 2020). Additionally, opposition to NAFTA could be justified because it brought about significant degradation in the health and environmental standards, promoted deregulation and privatization of essential public services, and caused the displacement of family farmers in the signatory countries (Baier et al. (2019). NAFTA further failed to generate impressive economic growth among its member states, with countries such as the U.S. and Canada experiencing economic recession following the enactment of this trade agreement.(International Trade Comprehensive Solved Essay Example)

Conclusion

The leading U.S. exports and imports in terms of value are chemicals at $288016 million, transportation equipment at $248967 million, and computer and electronic products at $233876 million. On the other hand, the leading trading partners with the U.S. include Canada at $354994 million, Mexico at $324378 million, and China at $153837 million. Compared to NAFTA, the U.S.-Canada FTA received much support from different stakeholders because of its ultimate aim of eliminating trade barriers in goods and services between the two countries and facilitating the establishment of conditions for fair competition. On the contrary, NAFTA was perceived to cause the transfer of employment opportunities from the U.S. to Mexico and hence largely opposed. (International Trade Comprehensive Solved Essay Example)

References

Arango Miranda, R., Hausler, R., Romero Lopez, R., Glaus, M., & Pasillas-Diaz, J. R. (2020). Testing the environmental Kuznets curve hypothesis in North America’s free trade agreement (NAFTA) countries. Energies, 13(12), 3104-3112.(International Trade Comprehensive Solved Essay Example)

Baier, S. L., Bergstrand, J. H., & Bruno, J. P. (2019). Putting Canada in the penalty box: Trade and welfare effects of eliminating North American Free Trade Agreement. The World Economy, 42(12), 3488-3514.(International Trade Comprehensive Solved Essay Example)

Crosbie, E., Carriedo, A., & Schmidt, L. (2022). Hollow threats: transnational food and beverage companies use of international agreements to fight front-of-pack nutrition labeling in Mexico and beyond. International Journal of health policy and Management, 11(6), 722-725.(International Trade Comprehensive Solved Essay Example)

International Trade Administration, (2023). TradeStats Express-National and State Trade Data. International Trade Administration. https://www.trade.gov/report/tradestats-express-national-and-state-trade-data(International Trade Comprehensive Solved Essay Example)

https://www.ncbi.nlm.nih.gov/