Explain the importance of free trade agreements to the U.S. and how they benefit the U.S. economy

Question

What will be an ideal response?

Answer 1

The United States currently has free trade agreements in force with twenty countries grouped into three strategic geographical regions: the Middle East and North Africa, the Pacific Basin, and the Americas. Most agreements are with small countries that account for a small share of U.S. merchandise trade, but Canada, Mexico, and Korea are major exceptions. Free Trade Agreement countries account for around 47 percent of U.S. exports and approximately 34 percent of imports. Proponents of FTAs make the argument that U.S. markets are relatively more open than many foreign markets. Given the relative openness of the U.S. market, bilateral and plurilateral FTAs that help open foreign markets promote U.S. exports relatively more than U.S. imports instead of causing a proportional increase in both. Consequently, U.S. exports to FTA partners are a larger share of total merchandise trade than U.S. imports from FTA partners. This supports the idea that FTAs have been relatively good for the U.S. insofar as they have helped to open foreign markets.