Nafta

The North American Free Trade Agreement or as its most commonly known NAFTA “is a comprehensive rules-based agreement between the United States, Canada, and Mexico”, that came into effect on January 1,1994. All three countries signed it in December of 1992; later on November of 1993 it was ratified by the United States congress. NAFTA was not only used in cutting down on tariffs between both countries but it also help deal with issues such as Transportation, Border Issues, and Environmental Issues between these two countries. NAFTA changed some tariffs immediately and within fifteen years other tariffs will fall to zero. NAFTA was not created to just lower tariffs it was also created to open protected sectors in agriculture, energy, automotive trade, and most importantly textiles. It also opened up the U.S. Mexico border to previously restricted areas of trade. “It set rules on government procurement and intellectual property”.

Now after it’s fourth year of existence it is apparent that it is good for Mexico and the United States. Because of NAFTA Mexico has been able to make significant changes in their economy, far more than the U.S. “The Mexican overall trade balance went from a $18.5 billion deficit it 1994 to a $7 billion surplus in 1995”. Even though American exports slipped $4 billion in 1995, the recovery of the Mexican economy in 1996, when the GDP grew 5.1%, American exports came round and grew to 20%, later to 35% thanks to NAFTA. Also because of NAFTA two way trade between the United States and Mexico has grown to 60% from 1993.

Although Mexico’s economy is making its first boom in sixteen years, it is still “economically small compared to the U.S”. Mexico’s economy has been compared to that of the size of Florida. Because of this all the hype about the loss of jobs to the U.S., especially California, have been taken over the top. According to the most recent information it was proved that NAFTA has had almost no effect on U.S. employment levels. At first when NAFTA came into effect U.S. employment levels did decrease, but within three years all employment went back up to normal. Some say that this in fact is not due to NAFTA, but to the continuing expansion of the U.S. economy.

Another aspect that has made Mexico’s economy boost is the Maquiladoras program. It began in 1995 as a side program of NAFTA, ”and set up a special cust...

... middle of paper ...

...ans of transporting goods across the border. Normally trucks are forced to wait in long lines for several hours; this is due to the lack of adequate infrastructure. This also causes polluting exhaust to escape into the air causing an even greater problem in the border air; this causes 20% of all air pollution. The 2,000-mile border separates two regions with totally different economical levels as well as environmental concerns. “The North American Agreement on Environmental Cooperation (NAAEC) was approved as a side agreement to NAFTA to insure that all parties enforce national and international environmental laws. It was also created to address any environmental problems due to NAFTA implementation. Because of this two environmental agencies have been set up to tackle these issues, they are the Border Environment Cooperation Commission (BECC) and the North American Development Bank (NADBank). They have set up mechanisms that allow community participation as well as allocated and approved funds for infrastructure projects. This in turn has created an upswing in the battle against environmental pollution along the U.S.-Mexico Border, may they be directly related to NAFTA or not.