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Case Study for FTA

Free trade agreements (FTA) are one important policy tool for governments engaged in international trade. The U.S. government’s website on the topic (http://trade.gov/fta/) shows that while 9% of world GDP is in non-FTA countries, 41% of U.S. exports are sold in FTA countries. Clearly, a well-negotiated FTA will increase the volume of trade.

However, FTAs remain controversial. Do they cause job loss, as Ross Perot famously argued in his presidential campaign? Do they change the location of manufacturing and the patterns of trade for better or worse? Do they affect government revenues in the form of taxes and tariffs?

We know from David Ricardo’s arguments that free trade improves utility on a global level. We now want to gain a better of understanding of what that looks like in practice, and whether the theory holds up under scrutiny.

For this assignment, select any major FTA. It does not have to include the U.S., and it can be bilateral or multilateral. Read broadly about its history, implementation, and effects on the economies of the countries involved. Then write a 2 to 3 page summary of the pertinent information about the FTA. You must cite multiple sources, and they should be diverse, including popular press such as the Wall Street Journal, Financial Times, or Economist. You must also cite at least one article from an academic journal. You should not cite unsubstantiated websites as reliable sources! Stay neutral in most of your presentation, and then conclude with your opinion and a prediction for the future.

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