Macro

International switch everyplace is an economic phenomenon is a strategy that has taken the experiences of many countries in the world. Between connecter and non get together globalization that pull aheads pla crystalizeary divvy up few allow disagree that join is the break option.This paper seeks to analyze and discuss the manner that greater internationalistic cope put on or hurt the US preservation, by identifying possible sectors which will benefit or suffer from spread out international wiliness, the practised or bad reasons for expanding the NAFTA to into the substitution the Statesn trim Trade engagement (CAFTA) and finally to make a conclusion in sum, whether expanded international handle is really to be a good or a bad thing for the United States. In so discussing the to topics, the paper incorporates in detail, five of the concepts from Economic Concepts section.Analysis and DiscussionExpanded international trade aims to promote free trade among natio ns. For the USA, having the NAFTA and CAFTA as just examples of more definite agreement between or among nations to promoted the trade between or among them. The WTO is very a bigger organization that promotes the same purpose. The seeming aim thereof of free trade agreements and the States under(a) the NAFTA and CAFTA may relieve oneself separate reasons that US has in mind moreover for the purpose of this paper, the economic benefits for the US as solely undeniable.The greater international trade and the US economyGreater international benefit quite a than hurt will go to the United States because the United States could produce more than it consumes. It is being net manu positionurer should hold in been reflected in its trade balance which should have reflected a supererogatory Trade Balance exactly over the years the United the states have always bee in trade deficit What makes in interesting for America is that despite the trade deficits over the years since it has i mported more than it has exported, its blunt domestic products over the years have roll away been increasing over the years.Viewed from the whether its people have benefited from the high GDP over the years, it could be argued that whether the trade balance is surplus or deficit, it is favorable to the United States. As how does this happen, could alleviate be explained the fact that many countries make investment in US dollar marks in term of US stocks and bonds and even in currency. This reaction of countries seems to put the US almost always in a bust position.The net effect for the US despite the trade deficit is the gains from as translated in terms of better foreign swap as against other countries. over again on this angle, although strong dollar as against other foreign currencies would have do US in a better position, devaluating the same could still result to the US still winning the net effect of things.On this none, Samuelson (2004) said that a sliding dollar wou ld have three possibilities The number 1 one is that the United States wins and no one else loses if a falling dollar incites the U.S. economy by increasing exports and restraining imports. This will have the effect of wasted industrial capacity which will keep the inflation low. Samuelson however believes that under this scenario, Europe and lacquer dont suffer much, because the ongoing global economic convalescence gathers strength and cushions export lossesThe second possibility is for the second, the United States and mainland China to win while Europe and Japan lose. This happens because China keeps its currency, the renminbi, fixed to the dollar, and that it besides gains competitive advantage when the dollar drops. This is further supported by the fact that China stabilizes the renminbi by investing surplus dollars in U.S.Treasury securities rather than interchange them for local currency.). This however will depress exports of Europe and Japan and destroys their econom ic recovery and then protectionism rises. The third although possible to happen be remote to happen that is the dollar crashes and that everyone loses. This happens when foreign investors dispose of their U.S. stocks and bonds, as value weaken in terms of their currencies which will trigger massive selling (Samuelson. 2004)As to how the US does it depends on it monetary policy. The US regime finished the Federal Reserve Bank empennage influence the foreign exchange market in the world because of the bigness. Using the power of the Reserve Bank, it can increase interest rates hence attracting many holders of other currencies to subvert the US dollar and this will again put the value of the US the dollar stronger despite fact that the US has have may trade deficits in terms of more imports as against its exports.The sectors that will get affected by expanded international tradeThere argon sectors that benefit and both(prenominal) which will suffer from the expanded international trade. To prove such effects, it is was reported that thousands of US jobs were lost due to NAFTA. Scott and Ratner (2005) blamed the rise in the U.S. trade deficit with Canada and Mexico through 2004 for the lost of more than a one million million million since NAFTA was signed in 1993. Jobs displacement occurred in every state and study industry in the United States and that more than half those lost jobs were in manufacturing industries. The US may have lost in terms of jobs but it may have won in terms of more investments made in the US and in terms of cheaper goods that have entered and the US where its citizens benefited.Expanding the NAFTA to into the Central American Free Trade Agreement (CAFTA)The event of whether I would be in favor of expanding the NAFTA into the CAFTA appears to depend on what is the purpose of this organization. The main issue is whether free trade is better for America. Again on the basis that America produced more than it consumers it is always b etter to for America to expand NAFTA to CAFTA.Zoellick (2005) said that if CAFTA is voted down, the regions worthless in Central will not improve their lot but instead, a door to upward mobility will be slammed shut. The US is doing not only free on economic reasons but also for semipolitical reasons since it believes that by generating employment it lessens problems to society.In sum, expanded international trade is a good for the United StatesBoyes, et. al (2003) said that the US need to be the leader in strengthening the world trading system to promote freer, fairer trade and consequent efficiency gains. Most urgent is for the U.S. to improve its diplomatic negotiations within the Doha Round of the ongoing World Trade agreement talks. They even recommended that the U.S. should make concessions to developing countries in agriculture and in apt property relief for critical medicines so as to successfully convey and improve the more important multilateral system under a free t rade.By so adopting and other public policy actions, Boyes, et. al (2003) believes that US will maintain its long-term strength in its economy. By so adopting freer trade as a rule for the US, it necessary has to criminal its back against protectionism and this is the antidote to freer trade. Boyes, et. al (2003) explained that protectionism and isolationism aim to maintain advantage in particular industries and professions, but other nations can and have emulated and bested the U.S. in selected and targeted areas, and they will continue to do so.They also believe that the strength of the U.S. is not to rear in isolation from globalization. The nations strengths are instead its aptitude to adapt to change, its ability to attract foreign capital, and its ability to attract the best and brightest from across the globe. final stageWe have found that the US will benefit more from greater international trade than not joining than not joining. The simple of joining international trade is the fact that it produces more than it consumes. There is however some sectors that will likely benefit and some which will suffer from expanded international trade because it could not be that America monopolizes all the fellowship in the world. As it opens its economy, there are industry sectors where America is not good at but it employs so many people.When we say, America is not good at certain industries, we are saying that America is simply not efficient economically that other nations are simply better than it that America could acquire it at a lower cost, hence it should abandon America to source the industry outside and instead concentrate on industry where it is good or in industries where is has potential for growth. The industries that it is good are on agriculture while an industry where it is not good at is on services of some professional like those of nurses.Since free trade is better to America as a rule, expanding the NAFTA to into the Central American Free Tr ade Agreement (CAFTA) must be deemed to be a better option. In sum, I believed that expanded international trade is to be a good thing for America.Protectionism is no place in America. Its democratic government would be inconsistent to adopt the same since democracy means exemption and freedom means freedom not only to vote in elections but also freedom to excel where its people have the capacity. The US is very reach to lose many things in free trade if one would look at it. Hence it is difficult to see why other developing nations like those in Central America would let out to see the benefits of free trade.ReferencesBoyes, et. al. (2003) Lessons From the Past History Says the Future of U.S. Industrial battle Is Brighter Than We Think, entanglement document universal resource locator, http//www.ernestmorgan.com/macro/essay3/boyes120103.html, Accessed June, 2007Samuelson, R. (2004) A Global Glut of Greenbacks, Newsweek January 5, 2004, www document URL, http//www.ernestmorgan.com /macro/essay3/samuelson010504.html, Accessed June, 2007Scott and Ratner (2005) Issue Brief 214, NAFTAs cautionary tale fresh history suggests CAFTA could lead to further U.S. job displacement, , www document URL http//www.epinet.org/content.cfm/ib214, Accessed June, 2007Zoellick, R. (2005), CAFTA Is a Win-Win, The Washington Post, , www document URL http//www.ernestmorgan.com/macro/essay3/zoellick052405.html, Accessed June, 2007