Globalization Of The Marketplace Has Brought About Costs...

Regionalism Briefing Introduction The globalization of the marketplace has brought about costs and benefits for all countries and industries. A main benefit of globalization for producers, like the those of us in the manufacturing industry is access to more customers however, competition also increases which decreases the potential for sales. Economic integrations are a part of global business that look to increase the efficiency of resources. Economic integrations and trading blocs are instituted in order to remove barriers to trade. The idea is that by removing barriers each individual economy will be able to utilize their own resources and those of others with more with more efficiency (Hill, 2013, p. 256). The result is that a common†¦show more content†¦Free Trade Area A free trade area is the lest integrated form of economic integration - â€Å"all barriers to the trade of goods and services are removed† but members still has the ability to set their own rules when trading outside of the bloc ( Hill, 2013, p. 257). The North American Free Trade Agreement (NAFTA) is the most recognizable free trade area (Hill, 2013, p.257-258). The major argument against free trade areas is that jobs which can be done for less are moved to other countries (Ho, 2016). In order to provide the congressional committee with an overview of the impact free trade areas have had on the US manufacturing industry this text will focus on NAFTA’s impact. NAFTA NAFTA is a free trade agreement between the US, Mexico and Canada that was implemented in 1994 (Childress, 2012, p. 23). Barriers to trade were removed in order to encourage trade between the countries (Childress, 2012, p.23). This allowed each country to focus on producing goods and services that their own local factors of production allow them to do most efficiently and trade for those which can be produced for less and of higher quality in other countries. â€Å"The U.S. lost roughly 800,000 jobs to Mexico between 1997 and 2013† NAFTA wa â€Å"the key driver for job losses† (Lunby,2016). Many US manufacturing companies moved production to Mexico where labor is cheaper as labor is the highest direct cost associated with manufacturing,