INT 610 week 8 - Module 8 Free Trade Agreements Lisa M...

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Module 8 – Free Trade Agreements Lisa M Iodice INT-610; Professor Ekern
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Module 8 – Free Trade Agreements Lisa M Iodice INT-610 In the year 2015 nearly every country is a part of one or more free trade agreements. This short paper will describe the benefits that countries seek to gain by joining an economic bloc, what the economic bloc is for the United States and what advantages and disadvantages membership in that bloc has produced. When supporters say that free trade is good for nations, they are speaking in regards to the desired results that free trade brings. When a country is considering joining an economic bloc, they are seeking several benefits. One of the most obvious would be to increase imports and exports through greater market access achieved through reciprocal concessions in trade barriers (Whalley, 1998). Another benefit they hope to realize may be economies of scale through better access to raw materials and technology. By better utilizing labor and resources, products may be able to be produced more efficiently thereby lowering costs, which then allows for more competitive pricing (and competition in general, meaning no monopolies). Countries seeking to join an economic bloc may also be hoping for more foreign direct investment. Foreign direct investment may create larger markets. Tariff elimination is another benefit a country may be seeking when joining an economic bloc. This has the effect of lowering the price of imports which means that consumers are able to purchase products based on lowest price (Arnold, 2003). This, in turn, increases competition and helps to not only create an expanded marketplace but also helps create an efficient market.
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