NAFTA amid Globalization

1893 Words Jul 9th, 2018 8 Pages
The world today is as interconnected and interdependent as never before mainly due to rapid globalization. The process of globalization has long began with human migration and trading of goods (Chanda). More recently, the world has experienced three rapid globalization periods. First, from the Industrial Revolution in Europe that opened up new resourceful lands in many other countries which encouraged the flow of people and foreign investments for productions (Salvatore and Dominick, page 2). The second phase of rapid increase in international trade happened during post WWII when heavy trade protections during the depression period were dismantled (Salvatore and Dominick, page 3). Present, globalization is at another peak development as …show more content…
Along the same line, each country’s economy has benefited from the accord’s liberations. By comparing the GDP figures in 1993 and present, the North American economy has doubled more than its size. (NAFTANOW). Overall, jobs were created in each country and “North American employment levels have climbed nearly 23% since 1993, representing a net gain of 39.7 million jobs” (NAFTANOW).

Despite the benefits NAFTA has brought, it raises the question whether all countries benefit on the same level, especially for Mexico’s developing economy. Is there a potential that NAFTA is favouring the powerful countries like United States and Canada more than a less powerful one? It also raises the concern of modern day economic exploitation or colonialism.

One of the biggest problems with NAFTA is the significant unequal difference in the wage rates between United States, Canada and Mexico (Kehoe, 1995). Because Mexico is more labour abundant than the United States and Canada, it is not surprising that their labour would be cheaper than United States and Canada. However, this creates opportunities for exploitation as companies in the United States and Canada outsourced their unskilled jobs to workers in Mexico. This not only resulted in the loss of unskilled jobs in both the Canada and the United States but it also led to the rapid growth of export assembly plants called maquiladoras near the

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