Free Trade Research Paper Example | Topics and Well Written Essays - 750 words

Free Trade - Research Paper Example later on all, states aim at managing the economy such that peck get goods at the lowest possible or affordable costs so that they derriere consume more and improve their living standard. Unfortunately, states do non have matching ownership on various imagerys that are necessary in the economy. For example, natural resource reserves such as iron, petroleum, coal, aluminum, copper and other differ widely among the nations. Other resources such as skilled and unskilled laborers, technology, or capital all vary substantially across the nations. Therefore, it becomes necessary for the countries to make up goods based on their core competencies and availability of resources so that goods are produced at the most economical cost. The unornamented produce can be exchanged with the goods produced by other countries economically. The benefit of economic production can be availed only when there are no tariff barriers among the states. The free trade p rovides authoritative economic boost to the member countries in terms of GDP, consumption. It is in fact a win-win situation for people of both the countries.Based on the above perspective, the US entered into a free trade organisation between Canada and Mexico on January 1, 1994 that came to be known as NAFTA. It is a worlds largest free trade agreement covering 45 million people with the combined GDP of the US, Canada and Mexico have surpassed US $17 trillion based on 2008 figures significantly up from the 1993 figure at US$7.6 trillion. It has been argued that North American employment levels have increased by 23% since its beginning. This amounts to a net gain of 39.7 million jobs (Naftanow.org , 2012).Trade axis countries eliminate tariffs thus making the cost of imports cheaper. As a result, demand of the goods spurts due to lower monetary value availability. For exporters, it provides an increased business opportunity and for importers, consumers benefit