8/01/2004

Trading with Mexico

I just read an article about Senater Mike Crapo, and Mexicos President Vincent Fox at www.americanpatrol.com . In this short artical they were talking about more farm trade with Mexico, and looser migration laws. The artical dident go into much detail about eney ideas of what they want to do, but it said that the President of Mexico is a strong supporter of a free trade market and he thinks it would create more trade in the long run.

If I was to have read this artical before I took this class, I would have thought it was a dumb idea, not for eney paticular reason, I just thought it would be a dumb idea. But now I can see that this would effect a lot of things, like produce prices in the U.S., and also make Mexicos econimy richer, making them trade more with us. I can now look at this as being a positve action that would help the us econimy.

But I would like to know what the class thinks about this, do you see it as being positve, or create more problims then its worth?

11 comments:

Senator Miller said...

I believe this is a very positive move for Mexico. Through opening free trade internationally they have more of an opportunity to import cheaply made goods, and specialize in a market niche. The only thing that I see as a possible foreseeable problem is whether Mexico can find that niche, and produce goods that other countries want.

Kid said...
This comment has been removed by a blog administrator.
Kid said...

Trade is always a good thing. This might be just what Mexico’s economy needs. Anyone who has ever been to Mexico knows how poor the economy is there. But as we have learned this semester they aren’t really poor in absolute terms. Compared to the US’ standard of living they are poor. Their economy is 50 years behind ours, but all South American countries are behind when compared to America. They live the way our grandparents and some of our parents lived. That isn’t necessarily a bad thing.

Boris said...

Anything that strengthens the Mexican economy is a good thing. They can use all the help they can get. Plus, as Mexicos economy grows, not only does it give them more trading power, but as our neighbor, it would be very beneficial to us. We are their biggest trade partner. Both countries would be able to trade more and both economies would grow.

kamm said...

It would be a great thing for Mexico to be able to have a free trade market. Their cost of labor is much cheaper than many of the industrilized countries, so they could make things cheaper and also sell for less. I think one of the keys would be for them to find a few things that they could produce efficiently. This would produce more jobs for their citizens and a higher GDP.
Over time their median income would rise and they would be a much richer country. Unfortunatly all of this takes time, so even when they become richer, they will still be behind.

metromut said...

I agree with all the comments here. Free trade in Mexico will do a lot for that country. It could help them catch up so they are not so far behind everyone. Like we talked about in class, they are our neighbors, and so trading with them could be very good for our country as well. Both economies will be boosted.

Dr. Tufte said...

Lots of spelling errors in the original post.

I think it is a good thing that the post and the comments are following the line of argument given by economists - that free trade is always good.

To play the devil's advocate though, here are two (more advanced) issues that economists also think about. First, what if our agricultural industry is able to produce things so cheaply that it puts Mexican farmers out of work. What then? Second, What if we are subsidizing our farmers, and it ends up putting Mexican farmers out of business? In some sense, we are already taxing American consumers to put farmers out of business in other countries.

One point about Kamm's post - cheap labor isn't what trade is about. It is about being both cheap and productive. Americans get paid a lot, but we are very productive, so the real costs of doing business here are that high in many industries.

james said...

I agree that trade is good. my qustion though is what do we get from Mexico? Many companies have moved production to Mexico for cheaper labor prices. How does this affect imports and exports? In effect are we just importing our own products.

C-Dizzle said...

I think that it’s a good idea to regulate the trade between our two countries. If the trade door was opened completely and suddenly, the economy would suffer. I am for slowly opening the door to trade though because if done in moderation, our economy could compensate better.

Dr. Tufte said...

Punctuation problem James.

WRT James' comment, a lot of our trade with Mexico is re-exportation and re-importation. But this isn't a reason to knock this kind of trade, unless you have evidence that it didn't occur in other situations.

WRT C-Dizzle's comment, the sentiment being expressed may be genuine, but this is also precisely the line given by people who really just want to restrict trade too.

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