The US-Morocco Free Trade Agreement

The US-Morocco Free Trade Agreement is a bilateral trade agreement between the United States and Morocco. The agreement was signed on June 15, 2004, and came into effect on January 1, 2006. The 95 percent of tariff on trade goods were eliminated since the FAT came into effect.

US-Morocco Free Trade Agreement is mutually benefit for two countries. For the United States, their products can sell to Morocco with more competitive price. The US exports to Morocco increase very fast. Also the US companies can found the company in Morocco to take advantage of the low labor costs. Because of it’s convenient for transportation to the European countries. US companies also benefit from the countries that have signed the FTA with Morocco, because they can make the products in Morocco and sell to these countries without tariff.

For the Morocco, the direct benefit is the increase employment and tax contribution by investment from US companies. The US companies can improve the productivity and people in Morocco are benefit by purchasing these products. Morocco’s economy has been growing steadily after past ten years. The country has a stable exchange rate, low inflation, and moderate unemployment.

However, this FTA also has negative impact. In Morocco, about 40% to 50% of people working in agriculture, the decline of the tariff on agriculture products has the direct effect on agriculture, government income and employment, because U.S. has the comparative advantage of agriculture products without tariff. The agriculture in Morocco loses the comparative advantage, so the labor should move to other industry. The companies from U.S. has already created some jobs to remedy the jobs lose in agriculture. Also the government should make policy to coverage people to develop labor-intensive industries, which they have comparative advantage of labor, and exports these products to U.S.. That will help Morocco could keep the employment and increase tax income. 

The seaport economy of RI

Seaports play a very important role in the trade, especially for international trade. The shipping cost by sea is far lower than by air, because the vessel could carry large amount of products to lower its shipping cost per unit. The decline of the shipping cost could keep the comparative advantage of the products sell to other countries. With the development of the sea transportation, some new business appeared, such as port service, security service, shipping insurance and truck shipping. This has contributed to local economy.

When we talk about the comparative advantage of the economy, it is usually between countries. But it also can be applied to the region’s economy. Such as port in the Rhode Island, it creates a lot of jobs and makes a great contribution to the local economy. The products which are shipped to the RI directly has lower costs than the other states which don’t have ports and need to deliver the products by truck from these ports. Also the consumption increase when a lot of people work at the port such as restaurants and hotels.

Because of the status of the seaport to local economy, the government should focus on develop the seaport. As a citizen whose work is not related to the sea transportation may not concern about the economy effect of sea transportation. Local people complaint about the nosey of the port, and prefer the recreational boating which could affect the sea traffic in the seaport. This is conflict with the development of the seaport economy. The government should build enough waterfront recreational area to fulfill people’s needs. Increase the service of the communities around the seaport to decrease the complaint. In addition, RI seaport has a long history, the government need consider to built a museum to raise the people’s attention to importance of the seaport to local economy. 

Can IMF improve the world's economy?

International Monetary Foundation (IMF) was built to help the membership countries to get out of economical crisis, increase the employment and decline the poverty. Usually, the IMF will provide financial assistance to the countries who experience the financial difficult and need borrow money too solve the problems. The money comes from the 187 member countries for the foundation to help member countries that need help. The country that needs help should provide the information of the difficulties and need to borrow money.

As a person or a company, when we want to do business, we have to get enough capital to invest to purchase material and hire people to work. If the money is not enough, we can borrow from bank or other friends. However, if a countries lack of money to develop its economy and deal with poverty, where could it borrow money? The answer is the World Bank, IMF and other unions. IMF is important for the development of the countries, which face the financial crisis; the loan could help the country continue to run rescue plan and improve the economy. The member countries can benefit from this foundation when he deposits a mount of money in the IMF. Although the World Bank can provide the support, IMF is important to work together with the World Bank.

Think about the recent Greece debt crisis, if no one such as European union and IMF borrow money for it to deal with financial problem, how it would be? Bankruptcy? If that, the country will have security problem and impact on the world’s safety.

However, when the country borrows money from IMF, in have to meet the requirement, such as increase the tax and decrease the government spend, and increase the interest rates to stabilize the currency. When the economy is weak, this requirement may hurt the economy rather than to help it. Government usually cut the spends on the health care and the input to health care, food and other public investment, finally cause the decline of the economy. To solve this problem, the IMF should make the different requirements depend on the countries’ situation, because even the financial crisis from different countries is different.