Podcast Summaries: NAFTA Time Out

Name: Professor’s name: Course: Date: Podcast Summaries In Trade Talks Episode 8: NAFTA Time Out – Unsurprisingly Unconventional, trade geeks Soumaya Keynes and Chad Bown discuss the economic tension that is a result of the NAFTA talks between Mexico, Canada, and the USA. This episode is an excellent synopsis of the fourth round of NAFTA negotiations. It accomplishes three things. First, it provides a NAFTA roundup. Second, it discusses how connected the NAFTA countries are, and how much American value is embedded in Mexican exports. And third, a quick-fire round enables the geeks to answer questions about NAFTA. The main points made in this episode include: NAFTA has resulted in a huge trade deficit for the United States which has caused a loss of thousands of manufacturing jobs. This deficit is a result of the resistance to change from the negotiating partners. Second, only 16% of the value of Mexican exports to the United States is American content. This means that there is not a lot of American content embedded in Mexican exports. Third, the United States has a bilateral trade imbalance with Mexico; the United States imports more from Mexico than it exports. What I heard from this episode is enlightening. I agree with Chad Bown’s assertion that there is tension between Mexico, Canada, and the United States. This tension could be arising because of a lack of certainty with the new NAFTA negotiations. From this episode, I have learned that there is a value-added aspect which is often missed because imports and exports are calculated in what is called ‘gross flow terms.’ I have also learned that when the trade value is measured in value-added terms, the number is smaller. In Trade Talks Episode 15: Is China a Non-Market Economy? Why the WTO Gets to Decide, Soumaya Keynes and Chad Bown highlight a huge WTO dispute. This dispute drove China to sue the United States and the European Union because both countries refused to treat China as a market economy. This refusal also meant that lower duties on Chinese exports would not be put by the United States and the European Union. This episode explains the legal, political, and economic implications of the dispute for the multilateral trading system. The main points made in this episode include: After China’s accession into the WTO in 2001, the United States, India, Brazil, and emerging economies applied extra harsh anti-dumping duties on China. This was because its economy was growing at a substantial rate 10-12% per year, its exports were also growing at a substantial rate which created competitive pressure on industries and the rest of the world, and those industries did not like this. Second, most economies do not regard China as a market economy because most of its industries are state-owned, most of its industries are getting state-subsidized loans, and most of its industries are given land to build on and pay low rent. European and American industries do not get these cheap inputs, and from this perspective, most economists today do not regard China as a ...