Author Question: Why are trade agreements between the U.S. and Mexico more controversial than trade agreements ... (Read 172 times)

jace · **on:** Jun 30, 2018

Why are trade agreements between the U.S. and Mexico more controversial than trade agreements between the U.S. and Canada?

What will be an ideal response?

Question 2

Critique the infant industry or the labor argument for protection.

What will be an ideal response?

hramirez205 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

Because of difference in levels of economic development is greater, which leads to larger political and social tensions.

Answer to Question 2

Critique of the labor argument largely rests on the confusion between nominal wage rate differences and productivity wages.
Critique of the infant industry argument is based on 1 ) the rent seeking and misapplication of what it means to be an infant industry, 2 ) the government's ability to correctly identify such industries vs. the market's ability to do so, 3 ) the protection creates disincentives for efficiency and low-cost production.