Nafta and Textiles Industry

QUESTION 3: With hindsight, do you think it is better to protect vulnerable industries such as textiles, or to let them adjust to the new situations that follow entering into free trade agreements? What would be the benefits of protection be? What would the costs be?

I think that it is better to let vulnerable industries adjust to the new situations that follow entering into free trade agreements. It is because protect an industry is just availability for short run. If want an industry to run continuously and compete in the domestic and global market, the industry must able to do adjustment with the new economic situation. Besides that, protect an industry express that the industry is less efficient and it will only waste the cost. By forcing the adjustment and If the industry is successfully to evolution, it will be greater efficiency and competition will be introduced, and prices will fall.

Anyway, there is some opponent standpoint. Protection of vulnerable industries such as textiles, can avoid the unemployed rate continue increase when economic crisis. There are a large number of workers in vulnerable industries and a plenty number of them not able to switch to other industries. Protection of vulnerable industries can let the government do not need to cover a lot of unemployment payments.

If NAFTA and the process of readjustment in the textile industry affect the U.S. workers' job move to Mexico, it will having a large job losses in U.S. But, if government try to protect this vulnerable industries, it will involve a highly costs. If the apparel production continue in U.S, the consumer need to pay higher price for the clothing. It will decrease the purchasing power of consumer. After a comic effect, it may influence the economic development. Besides that, in the globalization world, it is better and efficient to specialization in production. It can use the least resource to produce the most product. If US continue to protect