Establishment of regional trade unions has increased in the last decade, with close to one-third of trade unions being created or revived within this period. Trade unions are founded to give countries economic power in the international market. However, two primary issues still need to be addressed: economies of scale in production and production sharing across borders. Taking an example of the North American Free Trade Association, (NAFTA), complains of unequal gain have been raised. The US, for instance, has complained that the trade union has deprived its citizens of jobs since some big companies such as Brake Parts Inc. relocated to Mexico as a way of reducing operating costs. Besides economics, trade unions are also characterized by politics. Political interests change according to the prevailing politics in a country. Leaders who do not believe in the union provide less support to the union, which is a representation of their interest or those of the people they represent, depending on the benefits they receive. The success of trade unions, for instance, NAFTA, is contingent on the economies of scale it provides and social welfare of workers (Chase, 2003). Unions that give the biggest economies of scale while ensuring workers benefit maximally are counted as the most successful.
The article analyses multilateral trade arrangements. NAFTA is a multilateral trade agreement since it has more than two member states that is, Canada, Mexico, and the US (Chase, 2003). Bilateral arrangements involve only two countries. Multilateral trade unions thus enable members to access to bigger markets. Trade unions aim at increasing the economies of scale while giving member countries a bigger market for their products. However, they face a challenge of political interference, which slows down their progress. Regional production sharing is thus essential to ensure all members benefit equally. NAFTA has not realized all its aspirations due to demographic, social, and cultural differences (Hufbauer, 2015), but its economic impact surpasses the challenges. The author does not have a specific audience, but his article would best benefit economists analyzing the benefit of trade unions.
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The author sought to address the importance of trade unions while examining the challenges they face. Using NAFTA as an example, the author points out the need for an amendment to capitalize on economic gain for all member States (Hufbauer, 2015). NAFTA should look into its economies of scale and sharing of production benefits to ensure no country benefits at the expense of another.
The information provided by the article opens up the depths of multilateral trade unions. Ignorant citizens may be led into believing that all trade unions are good. However, delving into the details and in-depth analysis of the trading blocs may indicates otherwise. As an economist, the information provided in the article is a tool of analysis to show the costs and benefits of trade unions. Trade unions are also part of international relations, as trade is the biggest connecting factor among nations. It is during economic forums that head of states meet in most cases.
The information provided by the author agrees with the information provided in the course textbook. It is an extension of the contents of the book. However, the author does not expound on what other trade unions face besides NAFTA. To earn a bigger audience beyond readers interested in NAFTA, the author could provide a broader introduction on the general operation of both bilateral and multilateral trade unions before focusing on NAFTA, such as readers have a perspective on what other unions are beside the union between Canada, US, and Mexico.
References
Chase, K. A. (2003). Economic interests and regional trading arrangements: The case of NAFTA. International Organization, 57(1), 137-174.
Hufbauer, G. C. (2015). NAFTA Revisited: Achievements and challenges. Peterson Institute.
