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Running heading: Free trade and foreign direct investment

Free trade and foreign direct investment
Name
Institution
Date of submission

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Free trade and foreign direct investment

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Introduction
In the new world of business trade association are founded in particular country blocks
state in promoting trade laws
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In this focus, we will look at the
North American Free Trade which is a North American free trade as it is an agreement among
the United States, Canada, and Mexico which is designed in removing the tariff barriers between
the countries to promote free movement of goods and service making business more efficient
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Since its implementation in January 1994 by Bill Clinton has since tremendous changes where
tariffs between the United States and Mexico where the tax on imports or exports where NAFTA
required the elimination of the tariffs on the half of united states where goods shipped to Mexico
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) Imports tend to reduce when tariffs are high where it results in a
decrease in the supply of goods and a consequent increase in the price of the good
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NAFTA results to a creation of the world largest free trade in the region as an increase in the
gross domestic product which has amounted to wealth produced in the country
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More opportunity for manufacturing organization has been

Free trade and foreign direct investment

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established due to NAFTA in the access to new markets in the aspects of the consumer as while
as labor
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Has free trade provided an overall positive or negative economic effect on Business,
Government and the Populace?
Since its inception in 1993, the rise of the United States trade deficit with Canada and

Mexico has supported has caused the increase in production
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There has been the
growth in shipping of beef, agricultural and wood as while as paper products to the United
States
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Many small business exporters have benefited due to lack of complicated producer in caring out
the business hence this automatically raises the living condition of the state’s members
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(Arrow, K
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,
Costanza, R
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, 1995)
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Free trade and foreign direct investment

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What has resulted due to the current economic state of the world?
One cannot separate the economic concepts from the political science as while as history

since political is the control of the economy as history is the recorded facts and figured over the
years
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NAFTA
has had a great positive impact on the Mexico economic development as it has encouraged
foreign investors in building trust in Mexico despite its government having a high protectionist
and populist
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With this, there are great gains in the
investments between the countries
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Role played by FDI played in the success as a while as failure of the free trade
associations?

Foreign direct investment is the investments made by a company or an individual in another
country where it has an interest in that particular country resulting in widening of the assets as
while as shares which automatically gives investors a management's interest in the firm
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With
this concept, they are an increase in skills personnel
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(Grossman, 1991)The cost and the expenses of production are reduced
when the foreign direct investments in the free trade associations where there have been an
enhanced by the democratic political institutionalization of the free markets were thereby
encouraging globalization and investments in various regions as firms compete for markets
around the globe
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Enhancements of the democratic institutionalization and
the free market where globalization and investments have been encouraging in a great way
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(thomas, 2002)
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Free direct investment has increased the prospects for the countries in
determining the future growth rates of the countries in the new free-trade association such as
NAFTA whereby improved technology has significantly helped in reducing the small capital
intensive
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((2016, November 30)
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Retrieved from
https://www
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com/history-of-nafta-3306272
Arrow, K
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, Costanza, R
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(1995)
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Science,
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Grossman, G
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(1991)
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National Bureau of Economic Research
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C
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Reflections on Article 1105 of NAFTA
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Wade, R
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Governing the market:
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