This document outlines the written assignment for ECON 421, International Trade, for the fall 2020 semester. The assignment has two parts. The first part is a data collection and visualization exercise with some descriptive writing. The second part focuses on a short essay about the recently USMCA agreement. More specific instructions on the two parts are outlined below, but first some ground rules.
There will be some strictly enforced ground rules that you will want to pay close attention to. These rules are intended to limit the scope of your project and work effort. Many students are in different situations and these rules (while some of you might find them irritating) significantly reduce the open-ended nature of the project. The idea is for you to focus on quality rather than quantity, while getting practice producing written output in a constrained professional environment. The first ground rule is that you must upload your assignment as a single PDF file in Canvas. If you use MSWord, for example, you will want to use the “export” option to save as a PDF/XPS or Adobe PDF document. Your document must be typed in 11 or 12 point font. Your document should include the following pages, and the document cannot exceed 12 pages inclusive of the title and reference pages:
Title page including your name, date, and course information.
– Page 1, Figure 1 and Paragraph 1
Page 2, Figure 2 and Paragraph 2
– Page 3, Figure 3 and Paragraph 3
Part 2: Essay on USMCA (you should generally target 4 to 5 pages)
The final ground rule is to give appropriate credit to your sources. You are encouraged to rely heavily on your sources of information, but the words you use should be your own. Learn the difference between plagiarism and paraphrasing (with appropriate citation). Note that an inline parenthetical citation style with a reference list is preferred. Okay, so what do I mean by strictly enforced? Failing to follow the rules will result in as much as a one-letter-grade reduction in your score for each offense.
Specific instructions for each part:
1 Data and visualization (3 pages)
In part one of the project you are asked to produce three graphs (one for each page) and comment on the information. You need to download the data and generate the appropriate graph using your favorite software (MSExcel, for example). Do not take an image from one of your sources (cited or otherwise). The point is for you to generate the graph, look at it, and communicate a description of the graph in a single paragraph. You should focus on quality over quantity in the paragraph. You do not need to comment on everything that is going on. Pick one or two features of the graph that show a relationship with a contemporary event. In some cases the thing that may be interesting is that the event did not seem to change anything. If your paragraph is more than half a page you need to trim it down. Again do not try to explain everything—focus on a couple of details of interest.
1. The US trade deficit and income:
Use a line graph to plot the US trade deficit from 2010 to March of 2019 using monthly or quarterly data. On the same graph plot US GDP normalized to the same scale (e.g., use the right axis for GDP so the heights of the lines are comparable). A good source for these data is the Bureau of Economic Analysis. Include in your plot vertical lines indicating the timing of important political and policy events. These events must include the 2016 election, the 2017 tax cuts, and the series of tariff increases and trade-policy agreements under the Trump administration. The idea is to show the changes in the trade deficit and income over time (in a roughly equivalent scale) and relate these series with important political events. Include a paragraph of text that comments on the content of the graph. In the text you need to describe what is in the graph, but also indicate if and how the “events” related to the observed data.
2. The twin deficits (US trade deficit and US Government deficit):
For the second graph do the same analysis, but now plot the US trade deficit and the US Government deficit. Again get the plots to roughly the same scale and include the relevant trade and political events. In your paragraph be sure to indicate how the new series (the government deficit) relates to the events and how it is related to the trade deficit.
3. Commodity prices:
For the third graph consider how policy effects commodity prices. Select 4 different commodities that have published price data. You must include Soybeans and Corn as two of the four, and you need to normalize the prices so they are comparable. For example, you can scale the prices so they are all one at the start of the series. The USDA is a good source for agriculture price data but finding these in a convenient format is not necessarily transparent. As an alternative you can use other reputable sources that have already summarized cash price series. You need not stick to agriculture commodities for the other three. Again include a set of relevant policy events and write a paragraph relating the data and events. You may also want to include important weather events to help explain the series on agricultural commodities. For example, there was a big drought in 2012. If you focus on agriculture commodities the concept of a “crop year” is more useful than the calendar year.
2 Essay on USMCA (6 pages maximum)
You are asked to write an essay on the USMCA agreement. The idea is to write something like an extended newspaper article that summarizes what was agreed to and what are the impacts of the agreement. Before you start, download and read the executive summary from the United States International Trade Commission (USITC) report on the USMCA published in April of 2019. You should target no more than 4 to 5 pages for your essay, but you are allowed up to 6 pages of text. In addition to the USITC executive summary you should pull specific details from the relevant chapters of the report to support your essay. In addition, you must bring in at least 3 additional citations. That is, you should consider how at least three other authors have commented on the USMCA to include in your essay.
Anderson, James E. (1979) ‘A theoretical foundation for the gravity equation.’ The American Economic Review 69(1), 106–116
Feenstra, Robert C. (2004) Advanced International Trade: Theory and Evidence (Princeton: Princeton University Press)
USITC (2019) ‘U.S.-Mexico-Canada trade agreement: Likely impact on the U.S. economy and on specific industry sectors.’ Technical Report, United States International Trade Commission: Publication 4889