Calculating the Costs of NAFTA

Calculating the Costs of NAFTA

Effective on January 1, 1994, the North American Free Trade Agreement

(NAFTA) was enacted as a new dream, one designed to enhance the economies

and production of goods for the United States, Canada, and Mexico. Since its

conception, it was, and still remains today a controversy over the “potential

greatness and predictive results” vs. the actual facts and figures that have been

witnessed. Now, only some five years later, many would agree that this dream

has developed into a nightmare for those on all sides of the border. This

agreement’s far-reaching and damaging effects have been felt--in the United States--

mostly by the small business owners, and the individual middle-to-lower class

worker. I will expand on these points, however, I must also mention the plight of

our nation’s neighbors, who share in the consequences of this pact. NAFTA is on

its way to marking a decline in the American economy, an increase in

unemployment, and a general deterioration in the morale of the workforce in

America.

The glorious theory of NAFTA sure sounded innocent enough. In fact, it

painted the beautiful picture of North American countries holding hands in a

union bound for excellence. Together, they would strive for a common wealth

and to each, a revival of imports and exports; thus improving the economic

traditions of all. Free trade (eliminating tariffs) between countries and

expansion of sales across the border were the main objectives in the agreement,

and each side had something to gain through the process(Online, 1). Canada, who

imports vast amounts of agricultural products, appreciated the elimination of

tariffs on the goods that are brought into their country. For the United States,

the opportunities were many. The expansion of trade meant more product

needed, therefore more jobs would be created to employ the people. It also

allowed for the establishment of manufacturers anywhere in North America

without any exchange penalties. This is what made it possible to abuse the

cheaper labor in Mexico to make American products and then sell these back to

the Americans at the same price. Mexico had bright hopes for the future, also. It

seemed they had been granted a more respectable position in international

commerce. In addition, it could also provide more jobs for their poverty-stricken

public(Creations, 1-5). Collectively, these merits looked great on paper and

achieved much support from both democrats and republicans, providing for its

passing in both the Senate and House of Representatives. In its only opposition,

were mostly labor unions, knowing the effects of the cheaper Mexican labor; and