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Global trade has led to the development of free trade zones in the United States. Free Trade Zones (FTZ) allow for raw materials to be imported duty free until the product is sold outside the FTZ. There are benefits for local area in tax relief and employment. Foreign manufactures benefit from the FTZ by being able to showcase their product in the FTZ without paying a tariff. Looking at the larger picture of global trade and it’s effects on Americans, Seyoum and Ramirez identify negative aspects that go beyond the FTZ. Global trade has decreased available manufacturing jobs in the United States due to lower production costs in Asia and South America. The available jobs are limited high income positions that increase income disparity in the community. Increased competition and available products on the market alters the supply-demand dynamic lowering profits. Free trade agreements have lowered tariffs and taxes resulting in an increased burden for American taxpayers. These factors have combined to lead to an enormous trade deficit. (Seyoum & Ramirez 2017)
American brands that manufacture goods such as appliances, smartphones and automobiles are losing ground and customers to Asian and European companies that are increasingly making top quality, reliable products that consumers prefer. (Gitman et al. 2018)
Global trade does not increase the quality of life for American citizens, especially those who are employed in manufacturing or factory jobs. Large businesses often outperform small businesses which leads to less competition and availability of products and employers. Large corporations possess too much money and influence on society.
Gitman, L., McDaniel, C. Amit, S., Reece, M. Koffel, L. Bethann, T. & Hyatt, J. (2018) Introduction to Business. OpenStax.
Seyoum, B. & Ramirez, J. (2017) Foreign Trade Zones in the United States: A Study with Special Emphasis on the Proposal for Trade Agreement Parity. European Business Review (29) (1) pp 103-122. Retrieved 3/7/21 from: