NAFTA: Exploring Benefits & Disadvantages of Regional Economic Integration - Essay Sample

Introduction

Regional economic integration is the agreement among nations in a geographic region to reduce and remove tariff barriers to pave way for the free flow of goods between each country.

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Benefits and Disadvantages of NAFTA

The North America Free Trade Agreement (NAFTA) is an international trade treaty between countries in North America. It has several advantages; first, doing away with tariffs on imports from other countries helps stop inflation. Secondly, NAFTA allows smaller businesses to trade between countries, a move that increases the market size thus allowing them to make greater profits much easier. On the other hand, despite its achievements, there have been major concerns about the balance of the benefits. One of the concerns is that it is responsible for the trade deficit in the US labor market. Therefore, most of the manufacturing jobs that were initially available in the US were relocated to Mexico due to cheap labor found in Mexico. The move came as a drawback since close to 700,000 workers lost their income.

Benefits and Disadvantages of BREXIT

One of the main benefits of Brexit is sovereignty. In other words, the move will provide the UK with the opportunity of developing a market that is independent of not only Brussels policy, but also restrictions. Secondly, with the move, the UK will be in a better position to re-negotiate healthier trading terms with both the EU and non-EU nations. Lastly, the move means that Britain would regain control over fishing rights around its coast. Just like NAFTA, BREXIT also has some challenges (Daniels, Radebaugh & Sullivan, 2015). The first challenge is that the UK no longer benefits from the trade deals between the EU and other world powers. Secondly, the new tariffs are likely to be imposed on imports and exports between Britain and the EU member states.

Benefits and Disadvantages of the Trans-Pacific Partnership (TPP)

The TPP just like the other regional economic integration agreements guarantees its members broad market access. It achieves this by removing all non-tariff and tariff barriers to trade in services and goods across the participating nations (Daniels, Radebaugh & Sullivan, 2015). Thus, it promotes trade and new opportunities for people in these countries. Conversely, TPP has some challenges. For instance, it has been predicted that TPP may result in income inequality because it only serves the interests of the investors instead of workers.

Conclusion

Renegotiation of the North America Trade Agreement (NAFTA) would be an important step in solving its problems. On the other hand, in addressing the problems of BREXIT, the UK should invite negotiations with an open mind. Besides, Britain should take terms that ensure trading regulations that suit British economic interests without leaving the EU. Lastly, for the Trans-Pacific Partnership (TPP) there is a need to create a single trade that is capable of benefiting the involved countries in many ways.

Reference

Daniels, J. D., Radebaugh, L. H., & Sullivan, D. P. (2015). International business environments and operations. Pearson Education Limited.