Benefits and Costs of NAFTA Essay -- NAFTA International Economics Ess

Benefits and Costs of NAFTA Works Cited Not Included As long as NAFTA has been in existence, there has been controversy over its benefits and costs. Since NAFTA is viewed as a neoliberal trade and investment agreement, supporters and critics alike are able to expand its validity to a grander scale when dealing with the question of whether free trade itself is beneficial or harmful. During the life of NAFTA, many valid arguments for and against free trade have been brought to the forefront. Many economists argue neoliberal trade is superior due to allocational efficiency benefits. ?By lowering trade barriers, the agreement has expanded trade in all three countries. This has led to increased employment, more choices for consumers at competitive prices, and rising prosperity? (NAFTA at Eight 2). This rising prosperity mentioned is a result of rising efficiency that pro-neoliberal economists believe develops through specialization. If a country is better than another at producing a certain good, then that country is said to have an absolute advantage over the other in that particular industry. When both countries have higher productivity rates in different industries and they concentrate their efforts in those respective industries, then both countries benefit through neoliberal trade as they are not wasting their time and efforts producing goods that the other country can produce faster. As a result of trade through countries with different absolute advantages, total world production and therefore productive efficiency will increase. Even when a country is more efficient in all industries, both countries can still benefit from trade by comparative advantages. ?Some lawyers are better typists than their secretari... ...stitutions are more responsive to the poor, to the environment, to the broader political and social concerns that I have emphasized is to increase openness and transparency? (Stiglitz 227). These international economic institutions should possess substantial transparency considering their policies directly affect the public. Instead, the IMF and similar institutions have no accountability to the public of which it is supposed to serve. Through lack of transparency, countries with major influence in the IMF such as the U.S. can indirectly impose its own investment agenda upon the country in crisis. If actions of the IMF were directed through a democratic process, more logical and productive policies would develop. If the IMF promotes transparency through the policies it imposes on developing countries, it should set an example through its own governance.