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Free Trade Agreement Of Americas Essay

2587 words - 11 pages

Introduction The value of free trade is a contentious issue with many prongs. There appear to be economic benefits in the short-term to most, and in the long-term, to all that participate, as well as disadvantages. However, the area in which free trade appears most valuable and virtuous is that of providing freedom of choice. Since no single individual can produce all the different goods they need to maintain their life and achieve happiness, all individuals should have the freedom to acquire their needs by means of trade with others.This document aims to discuss relevant issues relating to the liberalisation of trade and how this could affect both Western economy (specifically the USA) and ...view middle of the document...

These advocates argue that foreign competition has forced many U.S. high-tech firms into bankruptcy or out of the business of producing certain goods.Some manufacturers and opponents of free trade argue that cheaper labour in foreign countries forces American companies to move their operations overseas. They say that in the long run, America is being de-industrialised. Protectionists also believe that American manufacturing wages must be protected from foreign competition. There is the argument that foreign competition causes Americans to lose their jobs.Tonelson concurs: "Five major American industries-automotive, steel, machine tool, semiconductor, and textile-received significant relief from imports through intelligently structured trade laws. Those industries have confounded the predictions of laissez-faire economic ideologies by gaining market share at home and in some cases abroad, contributing to job creation and reinvigorating American competitiveness." The Bush Administration has the above issues to contend with whilst attempting to convince companies and industries that free trade is the only way to go. Offering protectionism to these organisations will only hinder and impinge the trade agreements, almost surely resulting in developing countries walking away from the negotiating table. Brazil in particular is concerned with the Blue (as in collar) and Green (environment) sanctions that are being pushed by the US Congress. In their eyes this is merely an excuse to protect the US import industries by forcing higher tariffs on Brazilian exports which do not make their goods competitive in the foreign market.Winners and Losers "“ Should Brazil join FTAA? There appears to be no strong domestic consensus in favour of the FTAA, and the general view is that a lot is expected of Brazil and other South American developing countries, whilst little is offered in return. Brazil's tariffs are currently higher than the US, so to bring their tariff rates in line with the US would require reductions from Brazil, and little sacrifice on the part of the US. Additionally 60 % of Brazilian exports to the US face some form of non-tariff barrier. Unless these barriers (anti-dumping, rules of origin, agriculture subsidies and quotas) are negotiated, it will be difficult for Brazil to reach an agreement that offers substantial benefits.A quick look at the corporate power backing the agreement (Chevron, Daimler-Chrysler, Dow Chemical, DuPont, Eastman Chemical, Estée Lauder, Ford, General Electric, General Motors, Honeywell, International Paper, 3M, Motorola, Procter and Gamble, Texaco and UPS, to name a few) leads one to dig a bit deeper. There are two aspects of the FTAA agreement: broadening of intellectual property rights rules and "investor-to-state" lawsuits, which should be looked at closely.Intellectual property rights rules will have a negative impact on Brazil, especially when it comes to rules governing medicine. Existing WTO (World...

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