Some governments across the Americas are strong supporters of the Free Trade Are

Question

Some governments across the Americas are strong supporters of the Free Trade Area of the Americas (FTAA). This is true despite evidence that small companies typically have difficulty competing against large multinationals when their nations take part in regional trading blocs.

1. Do you think the FTAA would improve living standards in small countries (such as Ecuador and Nicaragua) or benefit only the largest nations such as Canada and the United States? Explain.

2. what can national governments do to help small companies compete in large trading blocs like the FTAA?

Explanation / Answer

1- Free Trade of Area of the Americas create strong relationship and freely flow of goods among the trading partners. Free Trade eliminate taxes and remove hurdles and barriers from the trading company. It is beneficial not only for the big MNC but I is also beneficial for the small companies. FTAA improve the living standard of the small countries because they can sell their products in big market, So the demand of their products increases. ASEAN is a great example of free trade agreement. All the countries of ASEAN members have got the advantages of free trade agreement. Small companies can use their extra raw material for bigger market.

2- National Government can give raw materials on subsidized rate to the small companies to promote them. They also reduce the taxes for the small companies to make them competent.

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