Title

Trade and Immigration Barriers: The Economic Border Model Applied to the U.S. and Mexico

Format

Oral Presentation

Abstract/Artist Statement

For over seventy years, the U.S. has protected its domestic agricultural industry with commodity subsidies. This policy has created a distortion in the international agricultural commodities market. Increased attention in the past twenty years to how international trade affects developing countries has resulted in escalating pressure from international regulatory bodies such as the World Trade Organization for the U.S. to liberalize its trade policies. This paper asks how removing domestic agricultural subsidies would impact trade with Mexico, and what the corollary impact of this policy change would be on Mexican immigration to the United States. The present study extends contemporary scholarship on the economic impacts of immigration by investigating what impact domestic policies might have on immigration. To investigate this question, this study develops a model to describe baseline conditions much like those that obtain between the U.S. (Country A) and Mexico (Country B). This economic border model accounts for a change in market conditions precipitated by removal of agricultural subsidies in Country A. In the model, Country A (a developed nation) supports its agricultural industry with subsidies, shares a common border and engages in trade with Country B (a developing nation), which provides no agricultural support to its farmers. The model suggests that with the removal of farm subsidies in Country A, agricultural production would fall in Country A and rise in B. This imbalance would impact the labor markets of both countries and reduce the unilateral immigration flow from Country B to A. Central to my analysis of the model's economic phases are Samuelson's factor price equalization theorem, human capital theory, and Bernoulli's hypothesis of economic choice. As applied to economic relations between the U.S. and Mexico, the economic border model predicts that the elimination of U.S. farm subsidies would reduce immigration pressure on the U.S-Mexico border.

Location

University of the Pacific, Classroom Building

Start Date

5-5-2007 9:00 AM

End Date

5-5-2007 12:30 PM

This document is currently not available here.

Share

COinS
 
May 5th, 9:00 AM May 5th, 12:30 PM

Trade and Immigration Barriers: The Economic Border Model Applied to the U.S. and Mexico

University of the Pacific, Classroom Building

For over seventy years, the U.S. has protected its domestic agricultural industry with commodity subsidies. This policy has created a distortion in the international agricultural commodities market. Increased attention in the past twenty years to how international trade affects developing countries has resulted in escalating pressure from international regulatory bodies such as the World Trade Organization for the U.S. to liberalize its trade policies. This paper asks how removing domestic agricultural subsidies would impact trade with Mexico, and what the corollary impact of this policy change would be on Mexican immigration to the United States. The present study extends contemporary scholarship on the economic impacts of immigration by investigating what impact domestic policies might have on immigration. To investigate this question, this study develops a model to describe baseline conditions much like those that obtain between the U.S. (Country A) and Mexico (Country B). This economic border model accounts for a change in market conditions precipitated by removal of agricultural subsidies in Country A. In the model, Country A (a developed nation) supports its agricultural industry with subsidies, shares a common border and engages in trade with Country B (a developing nation), which provides no agricultural support to its farmers. The model suggests that with the removal of farm subsidies in Country A, agricultural production would fall in Country A and rise in B. This imbalance would impact the labor markets of both countries and reduce the unilateral immigration flow from Country B to A. Central to my analysis of the model's economic phases are Samuelson's factor price equalization theorem, human capital theory, and Bernoulli's hypothesis of economic choice. As applied to economic relations between the U.S. and Mexico, the economic border model predicts that the elimination of U.S. farm subsidies would reduce immigration pressure on the U.S-Mexico border.