ValueMags has recently integrated a magazine that demonstrates how Free Trade Agreements are one of the most sustainable ways to create and build sustainable relationships internationally.
According to the magazine ValueMags has begun to offer, Free Trade Agreements are put into place to encourage international trade. There are five main aspects and benefits of FTA’s: increased production; economic development; international cooperation; resource allocation; business incentives. FTA’s promote increase of production because the variety and demand for goods and services increases when a country begins to export goods.Next, the agreements require and encourage countries to play by the rules and abide by the agreement signed. Consequently if countries don’t, businesses will be more inclined to do business elsewhere and those countries will lose foreign investments. Partaking in international trade deals require countries to participate and internationally cooperate. The following benefit of FTA’s is how resources are allocated. The way a country allocates its resources alone verses when it needs to factor in partners is completely different. The final two benefits and arguably the most important are economic development and business incentives. The similar benefits mean that through FTA’s, businesses will be more likely to take risks and grow the economy.
In terms of what applies to North America and what is determined in ValueMag’s new magazine, NAFTA has many benefits for both Canada and Mexico. The effects of implementing NAFTA are that the trade between Canada, Mexico, and the United States has quadrupled. This was through eliminating tariffs. Lastly, the agreement lowered prices of oil for North Americans. Prior to NAFTA, gas prices in North America were higher. As a result, everything that needs to be transported and distributed across North American can be done at cheaper prices.
What is important to take away from the benefits of Free Trade Agreements is that the benefits depend on the level of commitment of the countries involved. If countries intend to be as involved and committed as Canada and Mexico, they are guaranteed long-term success.