DB 1 BUSI 464.docx - Countries join free trade...

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Countries join free trade agreements (FTA) for multiple reasons, the first reason is the increase in market access to foreign markets. Lynch, D. A. (2010). talks about the increase in market access by saying, “Lower tariff barriers are the type of market access that is easiest to see and measure. The degree to which an RTA grants preferential access—the margin of preference —can be substantial: the US imposes a 25 percent tariff on imported light trucks, but qualifying light trucks made in fellow NAFTA countries Canada and Mexico face no tariff.” (Page. 3) The second reason is for a country to achieve economic stability. Countries with unstable economies attempt to achieve stability by forming FTAs with countries that have stable economies. Beckman, J., & Zahniser, S. (2018) gives an example of a country attempting to achieve economic stability by saying “For Mexican consumers, NAFTA has provided the framework for a large increase in imports of U.S. feed grains, oilseeds, oilseed products, and animal feed and Canadian canola. In turn, these imports have provided the basis for sustained growth in Mexican
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