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Trade Agreements
Compare and contrast the newly drafted USMCA and NAFTA. What are three benefits for the United States?
Trade agreements are treaties signed by two or more nations to encourage the free flow of goods and services between the members (Peng, 2009). These agreements, which can be bilateral or multilateral, reduce or eliminate trade barriers such as tariffs and quotas. As such, they lead to the creation of new markets for businesses, facilitate the production of high-quality goods and enhance economic growth (Peng, 2009). Trade agreements enable small businesses to buy raw materials from other countries within the free trade area without incurring any additional costs and sell more goods in the expanded market. This leads to the creation of new jobs, as the businesses need more personnel to support growing operations (Grossman & Helpman, 1993).
Grossman, G. M., & Helpman, E. (1993). The politics of free trade agreements (No. w4597). National Bureau of Economic Research.
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