Play devil’s advocate and attempt to debunk two peers’ opinions on the advantages and disadvantages of an open economy.

Peer Opinion #1

The main goods that the US exported in the 1990’s were automobile engines & parts, parts and accessories of automatic data process, and petroleum oils. During this time the Clinton administration concluded negotiation & achieved legislative passage of NAFTA that went into effect on January 1st, 1994. It was used to promote trade between the U.S., Canada, and Mexico by eliminating most tariffs on trade between the three countries. In 1995 the WTO was started and “marked the biggest reform of international trade since the end of the Second World War.” (WTO.org). It covered trade in goods, services, and intellectual property. It also put in place new procedures for the settlement of disputes.

According to the balance, there were 6 pros to NAFTA: It more than tripled trade between the countries, increased economic output, created jobs, tripled foreign direct investment, lowered many prices due to the elimination of tariffs, and helped with government spending.

Of course there are always cons as well, these are: while we gained jobs we also experienced job losses, suppressed wages, it put Mexican farmers out of business, these farmers then had to work in substandard conditions in the maquiladora program, US companies degraded the Mexican environment, and they allowed Mexican trucks into the US that are not help to the same safety standard as US trucks.

Amadeo, K. (2020, May 28). 6 Pros and Cons of NAFTA. Retrieved October 09, 2020, from https://www.thebalance.com/nafta-pros-and-cons-3970481

Brainard, L. (2017, May 10). Trade Policy in the 1990s. Retrieved October 09, 2020, from https://www.brookings.edu/research/trade-policy-in-the-1990s/

The history of multilateral trading system. (n.d.). Retrieved October 09, 2020, from https://www.wto.org/english/thewto_e/history_e/history_e.htm

Kenton, W. (2020, September 16). North American Free Trade Agreement (NAFTA) Definition. Retrieved October 09, 2020, from https://www.investopedia.com/terms/n/nafta.asp

World Trade Summary. (n.d.). Retrieved October 09, 2020, from https://wits.worldbank.org/CountryProfile/en/Country/WLD/Year/1990/Summary

Peer Opinion #2

Hello Classmates,

For the US during the decade of 2000-2010, the major export was civilian aircraft, aircraft parts and accessories, and refined petroleum products. The major import of the US was crude oil and mineral fuels followed by motor vehicles. The major trade barriers were the high tariffs placed on agricultural goods, textiles, and there was a ban on import of tuna from countries the US deemed not to be in compliance with the International Dolphin Conservation Program. Two pros of the trade barriers are that when the tariffs are high for agricultural goods, it places more value on locally grown goods. Locally grown goods are able to be priced lower encouraging consumers to buy them instead. The second pro of these trade barriers are that it protects the trade deficit. The barriers made it more difficult for countries to import goods that the US also produces locally. This like the agricultural goods, encourages the local consumers to purchase local goods so the US doesn’t have to import more goods than it exports. The cons of the trade barriers are that it hurts relationships between the US and other countries. This relationship may be important in the future to the US because they may have a good that cannot be produced locally. The second con of trade barriers is that hurts the consumers in the US because the prices of the imported goods are higher. This causes the customer to spend more for an item they like.

Retrieved from https://usa.usembassy.de/economy-trade.htm