Module-5 Discussion(CL)

1. On the discussion forum, describe an instance where a government has taken some action the result of which is influence on commerce.Minimum 250 words.

2. Respond to two classmates’ postings. Minimum 100 words per posting.

Instructions

Criterion                 Description                               Points possible 

________________________________________________________   

Content         Initial response addresses                            5

                          question presented  

_______________________________________________________

Word Count           250 Words                                           5

_____________________________________________________

Response To    Participant responds to                             10

Classmates            two classmates, 

                       and response furthers the discussion, 

                    (e.g., asks a question, provides further

                     information or examples, or introduces

                     a different opinion (10points/per posting). 

                 100 words minimum word count for reply post. 

_____________________________________________________

                         Total Points possible                               20

Response#1

The United States Government passes laws that are mostly intended for better economy to public and private sectors. These laws cover wide range of aspects including commerce, e-commerce, cyber laws, public rights, violations, taxes, technology, military, etc. In certain cases, the statutes passed by the congress could have impact on multiple of such aspects and not just one. 

         The North American Free Trade Agreement (also known as NAFTA, 107 STAT 2057), was a bill that was passed by the 103rd congress during Clinton’s administration which defines trade deals between the North American countries like Canada, United States and Mexico. The agreement incorporates tariff treaties for goods pertaining to agriculture, textiles, automobiles, etc. The expectation from the bill was to improve the number of U.S. jobs and reduce the unemployment rate by increasing the amount of imports and exports. Since the bill was passed, there was a speculation that it would turn out to improve economy and jobs within Mexico rather than the United States.

       The NAFTA agreement had a profound impact on commerce between the three countries. As predicted, the bill reduced trading expenses and boosted the job economy. According to Wharton (2016), this agreement has led to trade value increase from approximately 290 billion to 1.1 trillion in over 20 years. It also created nearly 6 million new jobs, all of which were only possible due to the trade bill (Alexandroff, Hufbauer & Lucenti, 2008). Investments across borders has also increased as stock market improved over the years. The agreement has created an integration of supply chains across countries making it easier for enhanced commercial deals. 

References:

Alexandroff, A. S., Hufbauer, G. C., & Lucenti, K. (2008). Still amigos: A fresh Canada-US approach to reviving NAFTA. Commentary – C.D. Howe Institute, (274), 0_1,0_2,1-25. Retrieved from https://0-search-proquest-com.library.acaweb.org/docview/216590878?accountid=9864

NAFTA’s Impact on the U.S. Economy: What Are the Facts? Knowledge Wharton (2016, September 06). Retrieved from http://knowledge.wharton.upenn.edu/article/naftas-impact-u-s-economy-facts/

Response#2 

Governments can make some policies or formulate strategies that can have an impact, whether direct or indirect on commerce. This can be achieved through legislations or strategic decisions which when agreed upon can cause a ripple effect on business at large. One major instance where a government action has influenced commerce is tax subsidies which is a reduction of tax one is obliged to pay by the government, hence encouraging business progress. I am going to explain more on export subsidies, which are defined as tax reliefs given by exporters to promote export of goods and discourage domestic sale as to improve the economy at large by participating in the international market (Goldstein, 2014). We are going to discuss about how government legislations and policy influence commerce with export subsidies as the area of interest.

Export subsidies primary role is usually to decrease imports and encourage more domestic manufacturing. The subsidies are achieved by reducing the costs accrued by importers and therefore the government policies motivate export of commodities. This has encouraged more production and creation of jobs as people manufacture more and more commodities for exports because of favorable tax incentives. This has in turn improved living standards and economies of countries who experience growth due to improved trade. The subsidies also have some side effects like inflation, which may be experienced due to increased wages so they are then seen in pricing as the businesses have to increase prices to cater for increased wage bills.

After looking on how government action can influence commerce, it can be said that the decisions or policies that governments put in place can have a positive or negative effect on commerce in a country. Decisions made must be strategic and well-articulated to ensure economic stability in a country. Good government policies reflect in the commerce of a country and will be mirrored by improvement of the economy while poor decisions have the potential to cause much harm to commerce in a certain area (Suranovicby, 2014). It is therefore important to say that governments play a very vital part in influencing commerce.

References

Goldstein, Jacob 2014 “The Invention of ‘The Economy’”

Steven M. Suranovicby 2003 “International Trade Theory and Policy Export Subsidies”