Trade Agreements

Trade agreements allow companies to sell their products and services in other countries with little or no restrictions, depending on the agreement's terms. Think of some of your favorite products that come from another country. Most of them are possible due to trade agreements at some point in the process, and those agreements allowed the company to produce a quality product at a competitive price. Trade agreements have generated opportunities, but they have created challenges in some industries and countries. Jobs have become concentrated in lower-wage countries, which produce products that are then sent back to higher-wage countries through trade agreements. Read this section and then complete the questions at the end. 

Review Questions

  1. Does international trade, taken as a whole, increase the total number of jobs, decrease the total number of jobs, or leave the total number of jobs about the same?
  2. Is international trade likely to have roughly the same effect on the number of jobs in each individual industry?
  3. How is international trade, taken as a whole, likely to affect the average level of wages?
  4. Is international trade likely to have about the same effect on everyone's wages?