Pros And Cons Of The North American Free Trade Agreement

Impact of NAFTA on Mexico’s manufacturing industry – Effect on Productivity, Wages rates, Incomes, and Investments in FDI

After 27 months of negotiation, the North Atlantic Free Trade Agreement (NAFTA), a trade agreement between the three north American countries: Canada, United States, and Mexico, was put into effect on January 1st 1994. NAFTA was developed to increase trade among the three north American countries while simultaneously promoting each countries’ economy growth. However, the United States faces a new government, and President Trump believes that NAFTA should be renegotiated to modernize the trade agreement instead of removing U.S participation. Some of these renegotiations, include: Trade in goods, Investment, Digital Trade, Cross-Border Data Flows, Government Procedure, etc, take into account the changes in the economy since 1994. This new

The economies of Canada, USA and Mexico were booming. The North American Free Trade Agreement has been beneficial for Canada. Eliminating tariffs from products entering Canada from the US or Mexico helped increase trade between these three countries. Prior to NAFTA, tariffs in Mexico reached up to 25% and were 2.5 times US tariff rates. Without it, international trade rules would have allowed Mexico to raise their tariffs up to 50%.

The article, “Displaced People: NAFTA’s Most Important Product”, written by David Bacon for North American Congress on Latin America, discusses how economic crises have caused Mexicans to be displaced. The North American Free Trade Agreement (NAFTA) has caused the price of crops in Mexico to lower so much that there are no economic benefits from planting them. There are around 500,000 indigenous Mexicans from the state of Oaxaca now living in the United States as farmworkers. The article states that between 2000 and 2005, the countryside in Mexico has lost a million and a half jobs. This causes indigenous Mexicans who relied on planting crops to make money to migrate to the United States. Families that cannot migrate to the United States and are now jobless will go hungry as they search for buyers to buy the crops they grow. While the crops they grow continue to lose money value, the price of the food that they need to survive keeps increasing. After Mexico adopted NAFTA, the price of tortillas has more than doubled and companies continue to monopolize tortilla production. Poor Mexicans are left with no ability to make money and

the Mexican agricultural industry had to compete with the far more industrialized US farm industry. Even though the amount of exported products tripled since the institution of NAFTA [according to the economist], most of those exports were maize. The United States was producing a greater amount of grain products and importing them cheaply into Mexico. The amount of American imports overwhelmed the Mexican market and forced them to sell to America and Canada. The theory the United States held was NAFTA would decrease the amount of Mexican immigration. However, this hurt the Mexican economy enough until around 2008 to force millions of Mexicans into the United States, doubling the Mexican-born population to twelve million in 2013 (Sergei, M. 2014).

The North American Free Trade Agreement, commonly known as the NAFTA, is a trade agreement between the United States, Canada and Mexico launched to enable North America to become more competitive in the global marketplace (Amadeo, 2011). The NAFTA is regarded as “one of the most successful trade agreements in history” for its impact on increases in agricultural trade and investment among the three contracting nations (North American Free Trade Agreement, 2011). Supporters and opponents of the NAFTA have argued the effects of the agreement on participating nations since its inception; yet, close examination proves that NAFTA has had a relatively positive impact on the economies of the United States, Canada, and Mexico.

When countries have needs but not the capacity to satisfy those demands they enter into trading through the exchange of surplus, produce to help their trading partners. Canada, Mexico, and the United States created a treaty to establish a relationship that can benefit everyone in this process known as NAFTA. This agreement has been criticized and has been blamed for hurting the US economy more than helping. Although speculations may be misguided, I do not know much about this agreement, and I must research multiple sources. This paper seeks to understand if NAFTA has produced significant benefits for Canada, Mexico, and the United States economies.

The North American Free Trade Agreement, also known as NAFTA is a trade agreement between Mexico, Canada and the United States that went into effect in 1994 under President Clinton. NAFTA was created to help eliminate most tariffs on imports and exports between the three nations involved. Because of NAFTA these three countries are prospering more than ever. Overall, NAFTA has been a great success in achieving its purpose to increase trade and help boost the international economy. NAFTA, trying to help boost the economy, focuses mainly on increasing the international commerce in North America, and in that respect it undoubtedly succeeded.

Although the agricultural sector of Mexico was affected by NAFTA, the country has another source of income to keep their economy running gasoline and oil, tourism, and the remittance that is being sent through Western Union by families, who earn money in the United States, to their loved ones in Mexico. It was documented in 2008 that there were $25 billion that was sent back to Mexico (The Other Side of Immigration), but even though the country [Mexico] earns through oil, tourism, and remittance, it was still not helpful for the Welton 26 and most Mexicans who migrated illegally to have job opportunities. That is why many Mexicans like the Welton 26 illegally migrated to the United States for better opportunities and to earn more money to provide for the ones they left behind.

While aiming for economic improvement, NAFTA has worsened the environment of Mexico in the process. Mexico is one of the three countries involved in the North American Free Trade Agreement. Having the second largest

The North American Free Trade Agreement, otherwise known as NAFTA, was placed into force on the first day of January in the year of 1994(Gov't of CA/US/MX). The agreement without doubt connected more businesses and economic growth into the following countries that have access to the agreement, including Canada, United States and Mexico (Canada International Global Affairs). From the following research conducted by multiple certified Canadian sources, they have proved that Canada’s prosperity has grown and created diverse and deeper commitments with the rest of North America (Canada International Global Affairs). Over the past few decades that NAFTA has been introduced in, they have had an excellent and positive effect on the Canadian economy.

Overall though, NAFTA has accomplished some goals, but has drastically failed in others (Weintraub). Even though there have been some benefits from the North American Free Trade Agreement, the loss of jobs, increase in illegal immigration, negative environmental impact, and change in the job markets in the USA and Canada have been very detrimental to the two nations, often at the expense of Mexico’s rapid industrialization. Approximately, 1,015,291 US jobs have been lost directly because of NAFTA since Mexico is a region with a lower cost of operation so the jobs market can’t compete with Mexico (Anderson and Bourassa). Since the United States has monopolized the food industry, for the most part, in North America, they have displaced around 9.3 million Mexican farmers that have either left for the city or illegally immigrated to the United States (Anderson and Bourassa). Environmental impacts have been negative in regions such as the “maquiladora zone”, which is along the Mexican-American border because of the increase in factories in the area, which has caused an increased in population and overall traffic and urban expansion, which has killed the desert environment of the region (Anderson and

The North american Free Trade Agreement (NAFTA), established in 1994, is an economic agreement, whose primary goal is to eliminate subsidies and trade barriers for national industries between The United states, Mexico, and Canada. The organizational structure of NAFTA was originally intended to have more advantages and positive outcomes, than negative effects on these three countries, but many factors have caused NAFTA to lean more towards the negative impacts it has had.   Although the organization undoubtedly succeeded their main goals, controversy has come up about how NAFTA has impacted the U.S and Canada negatively, regarding employment and wages. Industries are facing harmful disturbances as they lose market shares, because of competition

On January 1, 1994, the long-awaited trade agreement between Canada, Mexico, and the United States came into effect. The North American Free Trade Agreement, also known as NAFTA, removes tariff trade barriers between the respective countries by arranging a duty-free trade in a variety of goods. It also protects things like copyrights, patents, and trademarks amid the three countries. The agreement made trading and producing goods easier while also working to make North America a more aggressive player in the global marketplace (Amedeo, 2011). NAFTA opened up barriers for people to reach a bigger market to prosper from.

Clearly NAFTA has led to widespread job loss, with more than 200,000 U.S. workers certified as NAFTA casualties under just one narrow government program. Since the 1970's, there has been a steady trickle of