Nafta And The American Free Trade Agreement

1253 Words6 Pages
On January 1st, 1994, Canada, the United States of America, and Mexico had signed a free trade agreement, under the name - the North American Free Trade Agreement (NAFTA). This Free Trade Agreement was created to achieve its goal of eliminating barriers to trade and investment between Canada, Mexico and the United States of America. However, the question that politicians and economists of our nation are facing is whether Canada should remain in NAFTA with its partners, United States and Mexico. Despite a multitude of benefits that NAFTA is said to have by our political elites, 20 years later, it is evident the agreement has been counterproductive; which is evident by the slow move by Canadian manufacturers to Mexico, significant losses in…show more content…
By 1997, three years after the ratification of NAFTA, 47% of Canadian manufacturing plants that existed in 1988, which accounted for 28% of the jobs in the economy, had closed. To add on, 350,000 manufacturing jobs from 2002 -2008, were lost due to industrial plants moving to Mexico. This drastic drop in factory/plant numbers can be attributed to the fact that companies put their bottom line first - moving facilities to Mexico because Mexican minimum wage is only $5.10 compared to a minimum wage of $11.00 in Ontario. As a further incentive to relocate south, because of NAFTA, corporations don’t have to pay tariffs on products shipped back to domestic markets. Therefore, it is evident that NAFTA has resulted in many industrial firms/plants moving to Mexico for cheaper labour, and the impact of such actions has cost thousands of Canadians their jobs. By joining this free trade agreement, Canada has been able to increase its trade with the US and Mexico. Two decades after the implementation of NAFTA, total merchandise trade between Canada and the US more than doubled at an annualized growth rate of 4.4%. During the same period, Canada 's merchandise exports to Mexico also increased almost seven fold, and its trade with Mexico equaled $31 billion alone in the year 2012. Furthermore, a study completed by the Fraser Institute pointed out
Open Document