Question

1;Two decades ago when the United States entered into the North Amerrican free trade Agreement with Canada and Maxico, there was significant opposition from organized labor and some politicians.There does not seem to be the same level of opposittion to the TTIP Why do you think this is so?

2.The trans Pacific Partnership(TTP) has met with significant political resistance in the United State (see the opening case). while the TTIP has not (at least as yet). Why do you think this is the case?

Refer http://www.chegg.com/homework-help/creating-world-s-biggest-free-trade-zone-benefits-proposed-t-chapter-6-problem-1cdq-solution-9781259578113-exc

Answer 1

1. According to Stopler-Samuelson theorem, trade increases the price of the nation's abundant and cheap factor and reduces the price of its scarce and expensive factor.since in case of USA , it is the nation with cheap resource and labor scarce. So when free trade will happen, there will be fall in real income of labor, and real income of owner's of capital would rise. Since due to free trade in USA there is benefit of the capital owner were accounted,hence two decades ago when the United States entered into the North Amerrican free trade Agreement with Canada and Maxico, there was significant opposition from organized labor and some politicians.

whereas TTIP is a proposed trade agreement between USA and European Union. it aims to promote trade with multilateral economic growth.According to European Commission TTIP would boost the EU's economy by €120 billion, the US economy by €90 billion and the rest of the world by €100 billion. So this was an agreement for the global benefit. Hence more opposition was not seen as compared to the previous one.