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?

4 comments:

derek 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.

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.

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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