Steven Suranovic

Former Assistant Treasury Secretary Paul Roberts writes in Business Week (2004) how the premise of free trade is how the international division of labor follows the principle of comparative advantage. The us is likely to acquire an absolute advantage in all stages from the production process, because American workers are, on average, more skilled and educated than those people in developing countries, and infrastructure within the United States is superior. But the United States' advantage in terms of efficiency is almost certainly to be greatest in high-technology production processes, for which a highly skilled work force is critical.

The united states gains from the improve in efficiency resulting inside global division of labor. Roberts cautions that for comparative advantage to work, a country's labor, capital, and technology need to not move offshore. This international immobility is necessary to prevent a organization from searching for an absolute advantage by going abroad. Roberts notes how the internal cost ratios that determine comparative advantage reflect the range and quality in the country's technology and capital. If these factors move abroad to wherever cheap labor creates them more productive, absolute advantage takes over from comparative advantage, which explains the recent movement of jobs inside the form of outsourcing work.

According to an article in Globe Trade, in January of 2002 President Bush announced how the United States would explore a free trade agreement in the nations of Central America. The President mentioned his Administration would jobs closely with Congress on the this goal. The President added how the function of this initiative was to strengthen the economic ties the united states already had with these nations and to reinforce their progress toward economic, political, and social reform. The Central American Free of charge Trade Agreement (CAFTA) is a proposed agreement between the united states and Guatemala, El Salvador, Honduras, Costa Rica and Nicaragua. Negotiations concluded in December 2003 and Congress was expected to vote on CAFTA in 2004. The President advised that CAFTA will ensure that American workers and firms are not disadvantaged, build over a $4 billion of U.S. investment inside region, and avoid erosion of U.S. competitiveness.

It has been recommended that the Bush Administration hoped trade negotiations would trigger closer political and economic cooperation in between the Central American countries, advancing Central America's integration and contributing to higher peace, economic cooperation, and stability within the region.

There are numerous major economic trading blocs inside world that attempt to address the issue of regional integration in advertising international trade and global business. These groups include Canada, Mexico and the United States as the members of NAFTA, the member nations on the European Union which include France, Germany, Italy, Spain, Sweden, and the United Kingdom. The Mercosur member states for instance Argentina, Brazil, Paraguay, and Uruguay. There is a Caribbean Community and Commercial Market named Caricom. The Asia-Pacific Economic Cooperation (APEC) forum includes Australia, Canada, China, Japan.

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