Impact of Foreign Trade, Research Paper Example

Impact of Foreign Trade on the United States Jobs

The world has opened up to due recent advancements in travel and communication. More importantly the development of information technology that has seen the world turn into what scholars are calling a global village has played a major role in the development of international trade. The development of international trade has also been spurred on by the development of trading blocks as well as the numerous double taxation treaties that the countries are entering into in the very recent. The United States has been at the forefront in these developments as well as granting special trade concessions to trading partners such as the African Growth Opportunity Act (AGOA). These trade arrangements have had major impacts on the economy while at the same time they have contributed to the loss of jobs in the US.

The first way in which this international trade has led to job losses is through importation of cheap goods. The countries involved in these agreements such as the AGOA countries are able to produce goods at much lower costs than the equivalent costs in the United States. This will make the imported products cheaper and effectively rendering the producers of equivalent products in the United States jobless.

The second way through which the international trade is rendering people in the US jobless is through business process outsourcing. Through this process, companies based in the US contracts people in other countries to handle their businesses online. This process is attractive because of two reasons. One the companies are able to use the cheaper labor costs and two they take advantage of the time zone differences hence creating 24 hour operations without having to increase their office spaces. This makes the manpower in the US less utilized hence leading to joblessness.