Trade And Immigration Policies Economics Assignment

Trade and Immigration Policies
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Problem.
NAFTA is one of the main problems that is affecting the economy of the US due to the issue of free trade with neighboring countries such as Mexico and Canada. In this case, the trade policies of importation and exportation have been made less strict as compared to the times when NAFTA was not available. Trade and immigration in the US have been areas of global discussion due to the benefits and challenges that it’s facing. As well, trade in the US is directly connected to the immigration issue in the fact that some of the borders used for immigration and trade are being used for illegal purposes such as the smuggling of drugs and weapons (Slack, Martínez, Lee & Whiteford, 2016). The free movement of immigrants in and out of the company have affected the US trade because of this increased smuggling of illegal goods.
Facts about the problem.
In regard to trade, NAFTA has brought about the migration of US jobs to Mexico whereby the cost of production is cheaper. As a result, the manufacturers that remained in the US had to lower their prices in order to be able to compete with the Mexican manufacturers. In the year 1994 and 2010, there was a total of $97.2 billion US trade deficit with Mexico and in turn displacing more than 600000 US jobs. Also, the US wages were suppressed because the companies used to offer threats to the workers than they would close down and move to Mexico. Hence, workers gave up on wages bargaining and had no option but work for low wages (Blair, 2017).
In regard to immigration, there are more than 11.1 million immigrants and around 52% of them are Mexicans. This means that the US market if flocking hence affecting the economy negatively as a result of the strain to create more job opportunities for the increased population. Also, these immigrants have contributed to the increased levels of drug trafficking (Slack, Martínez, Whiteford & Peiffer, 2015).
Solution
The solution to this problem would be reviewing the rules of the NAFTA to ensure that part of them is in favor for the US trade and immigration policies. Having strict rules on NAFTA would reduce the number of manufacturers migrating their factories to the US. As a result, most of the investment will be done on the US economy hence leading to economic growth instead of job loss and wage suppressions. Also, having strict rules on the issue of migration will cut on the expenses associated with criminal activities related to drugs and weapons smuggling. Such amount can be reinvested in the US economy to come up with programs that benefit the economy.
In regard to the comparative advantage theory, it would be advisable to ensure that NAFTA regulates the production of specific goods in countries that have a lower production cost. As a result, the countries involved in the trade will experience a mutual benefit. In this case, both US and Mexico will each, manufacture the goods whose raw materials are readily available and export them to either country. Hence, this would mean that the tra...