For years, presidents have enforced Free Trade agreements with other countries to provide cheaper goods and help the world economy. It all began back in 1985, when the U.S. signed an agreement with Israel which has no expiration date. The idea was to eliminate the tariffs on goods that are normally implemented when coming into foreign countries and promoting goodwill among different countries. The second agreement was signed in 1988 with Canada but was superseded in 1994 by the North American Free Trade Agreement (NAFTA) between Mexico, Canada and America, signed by Bill Clinton.
NAFTA was extremely controversial because there were so many negative effects.
- Thousands of Americans could lose their jobs if U.S. companies started working out of other countries, like Mexico
- The U.S may not come out on the better end of deals with other countries. Example, the high ratio of Korean cars being sold in America as opposed to American cars being sold in Korea.
Optimist hoped the Free Trade would create more middle class jobs and raise the U.S income by billions.
As with all things in life, nothing is ever black and white. The FTA does result in more affordable goods and higher profits, but many Americans lost their jobs when their factories moved their business out of the U.S. The major countries corporations outsource from now are Mexico and Asia, creating “sweat shops” where workers get less pay and unhealthy work conditions.
On December 4, 2010, Obama renewed the FTA agreement with South Korea stating this new plan focused on protecting worker rights and health standards. Whether conditions in these sweat shops will improve is up for debate but one thing is for sure: Free Trade Agreements will continue to be made and used.
According to the International Trade Association, America now has FTA’s with 14 countries across the world which accounts for over 42 percent of U.S exports.