Research Project

International Trade: Free Trade Agreements and Growth Student's Name Institution Course Code: Course Name Professor's Name Submission Date International Trade: Free Trade Agreements and Growth Free trade agreements (FTAs) encompass a wide range of offers in which participating countries mutually agree to eliminate obstacles to commerce. Bilateral or multilateral FTAs reduce trade barriers like tariffs and import quotas to facilitate seamless and economically practical global trade. The US led the negotiation of multiple FTAs, including NAFTA and USMCA. These agreements have boosted U.S. product sales and shaped the economy. This topic is essential due to the debate on globalization, trade protectionism, and economic nationalism. With growing concerns regarding job relocation and regional economic inequalities, it is crucial to comprehend the effects of FTAs now more than ever. After establishing an FTA between partner nations, they negotiate to determine the operational framework of the agreement. Such agreements are likely. FTAs are specifically crafted to stimulate economic expansion by enhancing job opportunities, facilitating access to untapped markets, encouraging healthy market rivalry, developing inventive practices, and offering a competitive edge to partner nations. The prevalence of entrepreneurship is steadily increasing in the United States as many young individuals choose to embark on their business ventures instead of dedicating their formative years to government or private sector employment. Entrepreneurship involves problems and possibilities that FTAs may encounter in the pursuits of entrepreneurs (Ajewole et al., 2022). In addition, examining current free trade agreements and their consequences will yield important information for upcoming trade negotiations and policy-making. This research reviews the existing literature by thoroughly assessing the effects of FTAs on economic development, environmental sustainability, and social equality. It will examine how FTAs such as NAFTA and the USMCA have changed trade patterns and GDP growth. This study will also look into challenges posed by FTAs, such as differences in labor conditions and environmental standards. Literature Review Overview of Free Trade Agreements Although economists may have differing opinions on many subjects, there is a strong consensus that free trade is universally advantageous. According to Stantcheva (2022), free trade enhances productive efficiency and provides consumers with superior options. Furthermore, they suggest that the long-term benefits of free trade outweigh any potential impact on employment. Substantial empirical data demonstrates the significant impact of trade and trade policy on the economy and individuals, affecting their roles as employed individuals and consumers. Hofmann et al. (2019) argue that preferential trade agreements are vital in the global economic system. Academic and policy disagreements in trade policy revolve around several problems, ranging from the rationale behind preferential arrangements to their impacts on members, non-members, and the broader multilateral trading system. The trade-environment literature by Nemati et al. (2019) states that there has been a growing focus on the relationship between the environment and the goods trade, with less attention paid to services. Lydgate and Winters (2019) assert that free trade agreements impact trade liberalization. Research such as Adlung (2020) asserts that FTAs are meant to be 'WTO-plus' agreements enabling more trade liberalization between nations with similar trade philosophies. For the United States, the main goals of trade agreements are to reduce barriers to exports, protect American interests in international competition, and fortify the legal environment of FTA partner nations. Currently, the US has 14 free trade agreements with 20 nations. These agreements can hasten an entity's entry into foreign markets while making it more competitive by eliminating or reducing tariffs and implementing other favorable policies. Every FTA is focused on lowering trade barriers and creating a more foreseeable and comprehensible investment and commerce environment. This reduces the cost for US companies to export their products/goods/services directly into foreign country markets. Impact on Economic Growth Islam and Bhandari (2023) researched FTAs, with the US being analyzed for economic and long-term effects. Islam and Bhandari (2023) argue that FTAs can have several advantages, such as enhancing a nation's economy as a whole and creating fresh economic prospects. In a separate study conducted by Nemati et al. (2019), the researchers observed that FTAs are associated with a substantial rise in trade volumes, leading to a subsequent increase in GDP. The benefits of FTAs can be qua...