Tariffs Fixed to Increase Trade

In Newsday's article, "European-Moroccan pact loosens fish, food trade" the subject of tariffs is discussed. The European Parliament approved a new deal to boost Mediterranean trade by reducing customs costs. A ten year plan was put into motion that hopes to increase Moroccan trade and EU exports substantially. People in favor of this pact find it a good way to keep relations strong between the EU and Morocco as well as help international trade. People against this pact say it will hurt local industries. Many local food industries from these parties do not export because they are small family run businesses. This pact will hurt these groups because only the big food conglomerates are profiting from the deal. Morocco claims to have accepted this agreement with open arms, but the article seems to suggest that they were pressured because if this pact wasn't agreed upon, the entire relationship between these two entities would be reevaluated. 40% of the farms in Morocco are small family farms while the wealthy families with larger farms are benefitting from this agreement. Only time will tell whether or not this agreement is beneficial to both parties involved.

This article is a good example of how tariffs can effect trade. The pact is designed to increase exports and lower costs to do so. This shows how international trade increases producer surplus and how decreased tariffs decrease deadweight loss. This article also shows that there has to be a loser in these situations. No economic scenario is a win-win. The loser in this case would be the local producers that don't export and may go out of business because of it. All in all, this trade deal is a great example of how international trade applies to microeconomics.