North America Free Trade Agreement (NAFTA -- Pros and Cons)

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to pay a tax on their exports. This allows domestic producers to increase their domestic supply, which causes an increase in the domestic price, leading to a more prosperous country. The next form of a trade barrier is a quota. This restricts the amount of imports. The effects of a quota are similar to that of a tariff. However, unlike a tariff, this form of barrier restricts imports instead of taxing them. The third main trade barrier is a subsidy. Subsidies provide funds to certain domestic markets. More notable the agricultural sector is commonly known for these kinds of trade blocs. This will increase supply due to the producer�s ability to generate more crops without as much foreign competition. Consequently, this causes an increase in market price and a decrease in quantity demanded, which is the total amount of goods or services that are required at a particular time. As a result, domestic producers benefit and consumers lose welfare.

Therefore, the main objective of ...

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have been quite evident. According to economist and author Gary Hufbauer, �It has worked. North American firms are now more efficient and productive. They have restructured to take advantage of economies of scale in production and intra-industry specialization." (Huffbauer 2) However, it�s difficult to measure NAFTA�s effect very precisely, given the complexities involved in �pin-pointing� the exact culprit to economic shift, additionally, it�s nearly impossible to foresee an economy without NAFTA. Therefore, in efforts to asses the true effects of NAFTA it requires a complex analysis of measuring trade between nations, and the externalities that arise from the exchange process.

It�s ...

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