TRADE

Is Trade Good for America?

Is Trade Good for America?

Summary

Trade is typically defined as the exchange of goods and services among countries. That exchange is a spatial interaction, or movement that has long been a fundamental component of the study of geography. The analysis of America trade is split into two essential parts. One part, largely the interest of economists, concerns the structure of trade or the selection of goods and services that a country produces for exchange with other countries. The second part concerns the pattern of trade, or the geography of the exchange of those goods and services. It is the pattern of trade that is of primary interest to geographers, who have long studied the flows between countries. In studying those flows, geographers have also considered their institutional context, including government policy, and their effects at both the national and sub-national regional scales (Grant, 2000).

American trade assumes that trade is liberal, that is, devoid of government restrictions, and at the same time is the justification for liberal trade policies. Actual trade, however, occurs in an institutional framework in which government-directed commercial policy plays a crucial role. Common instruments used by governments to inhibit imports, for example, are tariffs and quotas. Tariffs are taxes on imported goods that governments have used both to raise revenues and to protect domestic producers from trade competition by offsetting other countries advantages in production costs. Quotas are limitations on the physical quantity of imports; only so many square meters of cloth can be imported, for example, or so many automobiles. Such a physical limitation not only raises the price of the imported good by inducing its scarcity, it also allows for domestic monopolies to form among a country's individual producers. Recent multilateral American trade agreements have had the general trend of reducing tariffs and ...