Economy Trading

Final Paper

Manuel Salas

ECN221-1

   02/19/2015        

Robert Jackson

Final Paper

Trading has been around since ancient times; in fact, trading was the monetary system for a long time until money came around in modern times. I would guess it’s safe to say that trading nowadays is not a lot different than what it used to be. It’s just another form of money that is used to trade goods and pay less for a product we need in exchange for something we produce in excess. Now, when we discuss who the U.S. trades with and who it does not trade with, we can go on for hours. We would think that trading with the US is a no brainer, but that’s false. The US does not do business with certain countries due to political differences and then some. 

Currently, the USA trades with 20 countries. These countries have an agreement with the USA called “trade agreements”.  These agreements are not the same in every country, as they vary based on the region and investment interests. “Although the names of Framework Agreements may vary, e.g., the Trade, Investment, and Development Agreement (TIDCA) with the South African Customs Union, or the United States-Icelandic Forum, these agreements all serve as a forum for the United States and other governments to meet and discuss issues of mutual interest with the objective of improving cooperation and enhancing opportunities for trade and investment” (Office of the United States Trade Representative., 2015).

Since every country has different trade policies, let’s use Mexico as an example. Mexico is one of the largest exporters in the world and one of the largest importers too. Mexico primarily imports from the US metalworking machines, steel mill products, agricultural machinery, electrical equipment, car parts for assembly, repair parts for motor vehicles, aircraft and aircraft parts (Economy Watch, 2010). Also, Mexico exports electronic equipment, mineral fuels (oil) furniture, plastics, vegetables, metal, etc. (Workman, 2014). In addition to just materials, we learn that Mexico and the USA are big on job trading too. The US exports more than three million jobs to Mexico, allowing millions of dollars in revenue for the Mexican government by just using the North American free trade agreement (NAFTA).  

Now, just as Mexico has a great trade relationship with the USA, there are other countries that have no relationship with the US at all. For example, countries like Cuba, North Korea, Iran, Lebanon and Syria are forbidden to do business with the US because of political differences. Also, these countries have had a history with the US and subsequently have shown national security threats and experienced human rights violations (Saez, 2015).

Even though these countries represent a threat to the US, there are certain rules that apply for trading goods. For example, in 2008 North Korea was sanctioned by the US because of its aggressive behavior and missile threats. So what happened is that the U.S Department of Treasury allowed luxury products to be exported to the country but anything that will help Korea’s military nuclear plans is forbidden (Saez, 2015).