America's response to the Flat World Case Study

America's response to the Flat World - Case Study Example Apart from World Trade Organization (WTO) and General Agreement on Tariffs Trade (GATT), the United States has entered into small trade deals as part of their plan to pursue trade liberalization on multilateral, regional and bilateral fronts. Securing ties with strategic partners enables the United States to expand its already booming economy. It can conquer overwhelmingly small and developing economies through these trade agreements (McMahon, 2006). As of 2005, America has entered into ten Free Trade Agreements. The first trade agreement is with Israel in 1985. This was followed by Canada and Mexico which comprises the North American Free Trade Agreement (NAFTA) which took effect in 2004. A free-trade agreement with Jordan went into effect on December 17, 2001. Negotiations for free-trade areas with Singapore and Chile, begun in December 2000, have been completed. On January 21, 2003, the United States and Morocco announced their intention to negotiate a free-trade agreement, and on May 21, 2003, the United States and Bahrain announced such an intention (www.citizen.org/trade/nafta, 2006) . It was then followed by the partnership with the countries such as Australia, El Salvador, Nicaragua and Honduras. An agreement with Guatemala, the Dominican Republic and Costa Rica have passed congress and has yet to be enforced. There are three more agreements that are being considered by congress, with Oman, Peru and Colombia. Talks are be ing done with 11 more would be trade partners, either bilaterally, as part of regional deals or as members of customs union (McMahon, 2006). Free trade agreements (FTAs) are arrangements or pacts between countries to secure preferential deals with strategically important countries. It can help the companies to enter and compete more easily in the global marketplace. In these kinds of agreements, this will help level the international playing field and encourage foreign governments to adopt open and transparent rule making procedures, as well as non-discriminatory laws and regulations (McMahon, 2006). FTAs also help strengthen business climates by eliminating or reducing tariff rates, improving intellectual property regulations, opening government procurement opportunities, easing investment rules, and much more. These deals may be lowering or in some cases elimination of tariffs and other hindrances on goods. NAFTA for instance, has set limits for safety and inspection of meats sold in the grocery stores, new patents for medicines that raised its prices constraints on local government's ability to zone against sprawl or t oxic industries; and elimination of preferences for spending the tax dollars on U.S.-made products or locally-grown food (Gruben,1997). Related to this, international trade is an integral part of the U.S. economy, accounting for more than one-quarter of U.S. gross domestic product and supporting more than 12 million U.S. jobs, including 1 in 5 manufacturing positions. FTAs can be a catalyst for accelerating economic growth by allowing greater competition, encouraging the formation