North American Free Trade Agreement (Nafta)

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North American Free Trade Agreement (NAFTA) I. Brief overview of NAFTA (mainly for in-class presentation) a. NAFTA Introduction b. Original Expectations II. NAFTA over the last 12 years a. Impact on the U.S. economy i. Jobs (Employment Growth) ii. Labor iii. Income iv. Imports vs. Exports (Trade Deficit) 1. Agriculture v. Economic growth b. Impact on Canadian economy c. Impact on Mexican economy d. Global Impact i. International Business ii. FDI (Foreign Direct Investment) III. NAFTA - The Good, the bad and the ugly a. Successes b. Short Comings i. Lessons Learned c. Broken Promises IV. NAFTA’s role going forward a. What needs to be fixed? i. Current Issues and Challenges b. How do you fix it? i.…show more content…
It is believed by many leading economists and theorists that the process of dollarization is very important and that it would greatly further the cause of NAFTA. “Dollarization occurs when residents of a country extensively use the U.S. dollar or another foreign currency alongside or instead of the domestic currency. Unofficial dollarization occurs when individuals hold foreign-currency bank deposits or notes (paper money) to protect against high inflation in the domestic currency. Official dollarization occurs when a government adopts foreign currency as the predominant or exclusive legal tender” (Mack 1999). This is proposing that the NAFTA becomes more like the EU, and has a single currency. Many have used the term dollarization, but they fail to close in on the real context of the situation. ‘Dollarization’ has been quite often very loosely used in many of the literature and references, where it is said that the foreign money would completely take over the local currency. This is hardly true. What many people fail to understand is the great benefit that this can have on behalf of and for the cause of NAFTA. It is extremely important to keep three useful concepts to keep in mind when considering the incorporation of it via NAFTA: “Asset Dollarization - The term Asset Dollarization refers to the use of foreign currency in any of the three functions of money: unit of account, means of exchange and store of value. Currency Substitution refers to the use of
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