Disadvantages Of Nafta

Decent Essays
1. Introduction
General discription of the assignment:
+ Canada is one top automobile exporter in the world with a strong history
+ USA is the largest and the most important market of Canada with a relationship and history between 2 countries. All most vehicles assembled in Canada is exported to US. And Canada also import a huge amount of automobile components from US.
+ Afer the industry crisis in 2008 and the effect of NAFTA, Canada automobile position and market share are losing to Mexico and other competitors. Canada is facing a trade deficit in automobile industry
+ However, automobile is the most significant industry in Canada that they are not allow to lose. Although the US market is becoming more competitive and there are lost of disadvantage
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- Access to US market: According to World bank, “ Canada’s NAFTA advantage gives investors access to 470 million consumers”. “ Many Canadian production hubs are actually closer to U.S. markets than American production sites — of Canada’s 20 largest cities, 17 are within an hour-and-a-half drive of the U.S.”
- Developed technology and R&D support.
- Government supports: + Low tax “Canada’s overall marginal effective tax rate on business investment is by far the lowest in the G-7 — about 17 percentage points lower than that of the United States” Source: Department of Finance Canada. + Government policy: Canada’s government gives many benefits to automobile investors in the effort of maintaining the position and increase the competiveness of the country autos industry.
- Universal health care system: help to reduce the cost of health care and increase the performance and productivity of automobile workers.
- Rank 14th in the World Bank’s logistics performance index. This help to reduce the cost of transportation and optimize the automobile supply
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