Kenneth Burkhardt Economics 131: Macroeconomics February, 2017 Word Count: 1523 The North American Free Trade Agreement, also known as NAFTA, involves Canada, Mexico, and the United States. NAFTA was introduced in January 1994, which provided the elimination of most tariffs on products dealt within these three countries. Some of the major products that were traded relate to agriculture, textiles, and automotive manufacturing. The reason why NAFTA was formed was to protect property, establish dispute- resolution mechanisms, and implement labor and environmental safeguards. The goal of creating this free trade agreement was to bring stronger and steadier economic growth to Mexico, which would lead to new jobs, and opportunities for the current
NAFTA negotiations began on June 11, 1990 when former President George Bush and Mexican President Carlos Salinas de Gurtari met to discuss the possibility of revising current trade policies. The thing that set the NAFTA apart from other trade agreements historically was that it was to be the first trade agreement entered into between two industrial countries and a developing country. By much of the world the NAFTA is often viewed upon as North America's answer to the European trading bloc. Many provisions of the NAFTA take their roots in the Canada-U.S. Free Trade Agreement which became operational January 1, 1989. A target objective was to create free trade between the United States, Mexico, and Canada rather than a comprehensive economic union such as that of the European Community.
The free trade that NAFTA has established among the United States, Mexico, and Canada has... ... middle of paper ... ...d exports but have lost their government subsidies, which effectively negates the gains from increased exports. There are many benefits of NAFTA, which are increased employment, raised national income, higher productivity, and lower consumer prices. The negative effects are increased pollution, loss of U.S. jobs, and unfair treatment and unsafe conditions for Mexican workers. The benefits definitely outweigh the negative effects in the long run because improved economies will raise the standard of living and promote better overall economic growth in all of North America. Bibliography: Works Cited Dentzer, Susan.
The Success of the North American Free Trade Agreement (NAFTA) On January 1, of 1994 a new approach to trade amongst North American countries took effect. With the aid of the United States Congress, President Bill Clinton was able to form a contract between The North American Countries of Canada, Mexico, and The United States of America. This contract, known as the North American Free Trade Agreement (or Nafta for short) was designed with many economic results in mind. Hopes were that not only would trade be easier, cheaper, and more abundant for all countries evolved, but economic wealth and growth would follow. Support for Nafta was split among most citizens of this country.
This would appreciate the dollar because Canada would need the U.S. currency to invest in our country. Canada is running a constant trade surplus. We must also look at the current account balance of Canada. It decreased drastically from 1996 to 1997. This, most likely, means their imports were greater than their exports.
Secondly, a worldwide ideological shift had begun during the 1970’s favouring the adoption of neo-liberal free market principles which championed free trade agreements. Thirdly, the emergence of global regional trading blocs, and increased US protectionism led Canadians to ponder their economic position in a changing global environment. Finally, and perhaps most importantly, the 1980’s marked the decade in which corporate power manifested i... ... middle of paper ... ... Investment in Canada (Ottawa: Government of Canada, 2012) Last modified 2012, 04. http://www.international.gc.ca/economist-economiste/statistics-statistiques/data-investments-investissements/data-FDIC/FDIC_US-EU_Sector.aspx?lang=eng&view=d Magdoff, Fred and John Bellamy Foster, What Every Environmentalist Needs to Know About Capitalism: A Citizen’s Guide to Capitalism and the Environment. New York: Monthly Review Press, 2011. McBride, Stephen and John Shields, Dismantling a Nation: Canada and the New World Order.
The success of the Auto Pact led Canada to think that it could develop a bigger relation with the U.S. by allowing free trade on all products. Canada’s hopes were to gain more competitors, encourage the extraction of natural resources, and attract other countries to invest in theirs (26). In 1985, Canada and the U.S. started discussing about the Free Trade Agreements. Brian Mulroney of the Conservatives was the one to sign this agreement right after he was elected as Prime Minister in 1988 (27). Under this agreement that took effect on January 1, 1989, the countries took away tariffs on most products, Canada’s right to put taxes on exports from the energy sector, and gave companies of the U.S. the right to sue Canadian companies if policies were clashing against the agreement (28).
This agreement eliminated “all trade restrictions such as tariffs, quotas, and non tariff barriers.” The Canadian economy gains access to the U.S economy that is ten times its size. While the U.S economy will gain the lower-priced Canadian goods. These two agreements show how much the Canadian economy relies on the United States economy and threw these two agreements the Canadian producers can export and import U.S goods easily and at an affordable and profitable price. In this paper I will show you how the FTA and the NAFTA help the Canadian economy export and import into the U.S economy and will show you how much the Canadian economy needs the American economy to do business. Why are the FTA and the NAFTA important to Canada?
One of the reasons Canada entered into free trade was the high expectations for increased trade volume and job creation. Not a bad plan when you consider the flow of dollars through the Canadian economy and its spin offs of increased productivity and decrease in the unemployment rate. But what really happened when Canada entered into free trade was a series of events which brought the country into a recessionary period. Canada experienced a net loss of 138,000 jobs in the manufacturing section and had the worst rate of productivity among the G-7 countries. The desire to protect Canadian industry and jobs has given employers more bargaining power with regards to national programs such as unemployment insurance.
The purpose of this paper is to explore the effects that NAFTA has had on the economy and it’s people during the implementation of NAFTA and in what NAFTA will bring in the future. The North American Free Trade Agreement was designed to open borders and promote free trade between three countries: Canada, the United States and Mexico. Signed in 1992, ratified by the U.S. Congress in November 1993 and implemented January 1, 1994, NAFTA reduced some tariffs immediately while others are scheduled to fall to zero over a 15-year period. NAFTA follows the prescription of liberalization- including the deregulation of government restrictions to allow increased trade, direct foreign investment, and foreign ownership of businesses. On January 1, 1994, a Mexico still sleepy from New Year’s celebrations awoke to discover a passionate new revolution sweeping across the state of Chiapas.