Free Trade Paper

1759 words - 8 pages

When Presidents Clinton and Bush supported free trade agreements with Latin America congress opposed their initiatives. In this essay I am going to discuss why free trade is beneficial, why presidents favor free trade while members of congress oppose it, under what conditions congress will support Presidential free trade agreements, how an adversarial legislature can assist Presidents in strategic trade negotiations, and finally whether free trade zone is a good idea.Free trade is beneficial because it creates a positive sum whereby more products are available for everyone. For example if there is free trade with Mexico the Mexicans can just spend all their time growing crops while the ...view middle of the document...

The members of congress are not interested in the benefits of the collective. Their interest is to protect their constituents. Since free trade will hurt some individuals then the MOC of these individuals will oppose the free trade while the president will support free trade because he represents the whole of the people and the whole of the people will benefit from free trade. However, since the president depends on congress approval for his duties this means that free trade cannot happen. Therefore we must ask on what conditions will congress support free trade.The answer to this is that congress will support free trade in the cases when the president and the majority of the members of congress are form the same party. When the president leads a free trade reform the whole of the population will benefit and thus his approval will increase and he will become more popular and so will the party. This benefit is greater than the costs that will be incurred by the losses of the individual districts. Therefore MOC are willing to sacrifice their districts for the welfare of the whole if their party benefits from this. However we should not expect MOC to be willing to do this if the trade will hurt them too much. When there is divided government we will see that MOC will not agree with free trade initiatives because they have no incentives to follow them. They will not get benefits and they will be hurt because they hurt their constituents. Furthermore, MOC are willing to support free trade if the other country is willing to open up their industry and the US puts tariffs on the imports.However, there are benefits to democracies because of the congress that wants to block free trade. To explain this we must use Putman's two-level game. The game is like a continuum of where we see where the points are where the key actors are willing to stay. In one side is the US opening up and having the other country close up their markets while the other extreme is the US closing its markets and the other one opening up their market. When dealing with autocracies this benefits the US as we can see in the diagram:no diagramHowever, when dealing with other democracies (because the other democracy's congress will also want to maximize their benefits) this can prove difficult and sometimes this leads to have to compromise by MOC (such as the president example discussed above) if they will trade because both actors will only want to benefit themselves.Based on what I know about free costs/benefits of free trade I think that free trade zones are a good idea. Economically I have to say that say that it depends on what exactly the agreement advocates. If it hurts individuals too much then I do not think that this overcomes the benefits that other derive. Thus I would not want people to lose their jobs and starve in order for the whole to benefit. However, in terms of politics I see free trade as a great investment because free markets are likely to spawn democracies ...


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