A Discussion of the Negative Impact of NAFTA on North America

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A Discussion of the Negative Impact of NAFTA on North America The North American Free Trade Agreement was passed in November of 1993 and went into effect on January 1, 1994. The agreement aimed to eliminate tariffs between Canada, Mexico and the United States, leading to the eventual creation of free trade among these three countries by the year 2008. Supporters of NAFTA billed the agreement as a wonderful opportunity to create jobs, stimulate competition, and free North America from harsh and often unfair tariffs that restricted trade between the three nations. From a theoretical perspective, NAFTA appeared to have the makings of a highly beneficial relationship between Canada, Mexico and the United States. Despite the great expectations of NAFTA, it seems the agreement has fallen short of its promise to increase the economic and social livelihood of these countries. In this paper I will discuss the economic and social impact of NAFTA on Mexico, Canada and the United States. I will show how free trade has damaged both the Canadian and Mexican economies because it has made the success of both countries too dependant on the success of the United States. In addition, while NAFTA certainly benefits a portion of the populations in Canada, Mexico and the US, it harms another, namely the working population. This harm is apparent in the loss of jobs for this portion of the population along with the widening wealth gaps that are apparent in all three countries. In sum, NAFTA must be reformed in a way that gives as much emphasis on the importance of labor and social development as it does to the protection of investors, finance and big business. Free Trade Creates Dependencies Both Canada and Mexico are very diff... ... middle of paper ... ...dden Costs: Trade agreement results in job losses, growing inequality, and wage suppression for the United States. Economic Policy Institute. 2001. 2.) Salas, Carlos. The Impact of NAFTA on Wages and Incomes in Mexico. La Red de Investigadores y Sindicalistas Para Estudios Laborales (RISEL). 2001. 3.) Campbell, Bruce. False Promises: Canada in the Free Trade Era. Canadian Centre for Policy Alternatives. 2001. 4.) Faux, Jeff. NAFTA at Seven: Its Impact on Workers in all Three Nations. Economic Policy Institute. 2001. 5.) Arroyo, Alberto. NAFTA and the Mexican Economy. The Mexican Action Network on Free Trade (RMALC). http://www.developmentgap.org/rmalecon.html 6.) World Bank. Inequality in Latin America and the Caribbean. World Bank: Social/Economic Policy. October 8, 2003.

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