USA Trade Agreement With Latin American Countries - Essay Sample

Introduction

The USA uses different approaches to doing business with other countries across the world. The approach used in business with a particular country depends on whether the USA and that country have trade agreements or not. Focus is no how the USA engages with the Latin American country (Chile) with which she has trade agreements and any other Latin American countries with which she does not have agreements. Latin American countries are the most significant business partners of the US because of free trade agreements. Group findings show that the average effect of a free trade agreement between the USA and Chile is 0.94, showing an increase in bilateral trade (Leung, 2016, page 177). Factors we consider in our comparison of approaches USA use in business with Chile and other countries include, export rights, trade representation, and free trade agreement. Additionally, we look at roles played by the World Bank and the International Monetary Fund (IMF) in the USA trade with Chile and other Latin Countries.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

Free Trade Agreements

This agreement approved by the US congress in 1993 (Villarreal, & Fergusson, 2017) allows the USA and its bilateral partners to trade freely without any trade barriers. Minimal requirements that the USA puts in place with the passing of this agreement allows it to keep a good business relationship with her major trade partners like Chile and Mexico. On the contrary, any countries that trade with the USA and are not part of the North American Free Trade Agreement follow tight trade regulations to access trade opportunities with the US. These countries face trade barriers; therefore, have to adhere to trade regulations to be able to trade with the US. Americans who would wish to also trade with such countries must follow the regulations in the federal legislation to be able to legalize their trade activities with such countries.

USA Export Companies

Most companies involved in exports and imports do not embrace the free trade agreement because they may choose not to go through complicated compliance and regulation procedures. However, the US has been at the forefront helping her export companies find a market and one of the strategies was to pass the Free Trade Agreement Act. On the other hand, the USA administration under President Trump has turbulence and anti-Free Trade advocacy limiting the privileges of the agreement (Shen, 2019). This war sees countries outside the agreement doing better than the ones in the agreement and this is why most companies prefer trading outside the agreement.

Trade Representatives

The US government takes part in having representatives in various countries to enhance bilateral ties for ease of international trade. Institutions like Trade Promotion Authorities work under the Free Agreement Act to better the efficiency of trade through representation in foreign countries like Chile. The representatives attend trade forums, negotiate with the countries' governments for better trade terms, and ensure minimal exploitation of traders in those countries (Kuyper, 2016). The traders who feel they cannot be part of Trade Agreement with the US end up with maltreatment and even fraudulence in foreign countries.

The World Fact Book

Regarding foreign trade geographical zones, criteria characterizing foreign economic activities have minimal attention. The USA combines these criteria with other measures like the free trade agreement to build its economy and foreign trade proficiency (Sokolov, 2019, January). This initiative embraced by America benefits so many countries in the trade agreement; they get real-time markets in the US. Contrary, countries that do not agree do not enjoy such privileges from the US government. They operate as private entities or even engage in illegal business, which is a criminal offense.

International Monetary Fund (IMF) and the World Bank

IMF plays an important role by determining scarce resource allocation to every sector of the economy (Daoud, et al., 2017). The US government can therefore not regulate its resource allocation to trade Unions and Trade representatives abroad in an inappropriate manner. The intervention of the IMF shows that trade agreement gets its major support from both the US government and the IMF agency. This privilege is out of reach to countries that trade with the US out of the agreement act. The World Bank also approved a Global Financing Facility to help countries develop their economies through trade and other means (Fernandes, & Sridhar, 2017). The facility is beneficial to the USA and countries within the Trade Act.

Conclusion

The reflection on the approaches the US government has in engaging the Latin American countries in trade gives a clear picture of the importance of joining trade agreements. The analysis of most of these approaches speaks about privileges that Chile and other agreements within the agreement enjoy. The USA has had this legislation for over 25 years should work hard to enjoy it is trade friendly and not there to oppressed traders and countries in the agreement.

References

Daoud, A., Nosrati, E., Reinsberg, B., Kentikelenis, A. E., Stubbs, T. H., & King, L. P. (2017). Impact of International Monetary Fund programs on child health. Proceedings of the National Academy of Sciences, 114(25), 6492-6497.

Fernandes, G., & Sridhar, D. (2017). World Bank and the global financing facility. bmj, 358, j3395.

Kuyper, J. W. (2016). Systemic representation: democracy, deliberation, and nonelectoral representatives. American Political Science Review, 110(2), 308-324.

Leung, J. Y. (2016). Bilateral vertical specialization between the US and its trade partners-before and after the free trade agreements. International Review of Economics & Finance, 45, 177-196.

Shen, Y. (2019). Trump, 2018 Trade War Edition: An Analysis Through the Political and Economic Perspectives.

Sokolov, S. N. (2019, January). Foreign Trade Geographical Zones In Asia And The Pacific. In International Scientific Conference" Far East Con"(ISCFEC 2018). Atlantis Press.