Pros and Cons of Foreign Investment Case #2
The North American Free Trade Agreement (NAFTA) was enacted in 1992 between the United States (US), Canada, and Mexico and began its enforcement January 1, 1994 (Villarreal & Fergusson, 2014). The agreement was enacted to reduce the barrier of trade between the three countries by eliminating tariffs with the goal of increasing prosperity within the countries. NAFTA was opposed by many who saw the agreement as detrimental to US jobs, while proponents argued the agreement would in fact increase jobs in the US. In its twenty years of enforcement, many pros and cons of the agreement have been experienced.
Positives of Foreign Investment Effects One of the arguments presented by the AFL-CIO regarding
…show more content…
Organizations exporting to countries such as Mexico where the Peso is far weaker than the US dollar, experience less costs as exorbitant tariffs charged to organizations of non-NAFTA countries are eliminated by the trade agreement resulting in larger profits for exported goods and services. Though the Peso is weaker than the US dollar, the exchange rate is stable with only minor changes providing additional advantages and further reducing risks to US organizations in engaging in trade with Mexican …show more content…
The side agreements were required to protect investors and workers by promoting cooperation on labor and environment matters and provisions to resolve an organization’s failure to uphold and enforce local labor and environmental laws (Villarreal & Fergusson, 2014). NAFTA therefore raised the risks to foreign investment where it was intended to reduce such risk necessitating further agreements to ensure needed protections were in
Workers have safer conditions, higher paying jobs to choose from, and better benefits negotiated for them by their collective bargaining unit. The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is a national federation of labor unions in the United States. It was formed in 1955 by the merger of the AFL, an organization composed primarily of craft unions founded in 1886, and the CIO, a federation of industrial unions founded in 1938.
Throughout the history of the United States of America the continuation of misfortunes for the workforce has aggravated people to their apex, eventually leading to the development of labor unions.
against their employers, employees were able to go on strike and prove a point. Some
"North American Free Trade Agreement (NAFTA)." Encyclopædia Britannica. Encyclopædia Britannica Online. Encyclopædia Britannica Inc., 2011. Web. 23 Nov. 2011. .
Fair trade should give protection to governments from exploitation. For example, small farmers can be protected by giving government food sovereignty. An article from the Chicago Democratic Socialist Organization proposed, “The agreement must return to governments the ability to safeguard food sovereignty by protecting family and small-scale subsistence farmers” (Chicago Democratic Socialist). Rewriting the agreement can protect the small farms and retain jobs for farm workers. The article further addressed an issue discussed previously, “Large-scale importation of basic grains into Mexico is a major cause of the economic collapse of rural communities, which forces millions of undocumented migrants to seek work in the USA” (Chicago Democratic Socialist). Therefore, it would solve problems both in the US and Mexico. It will take efforts of the many to renegotiate NAFTA, and many other terms needs to be added. The general direction should focus on protecting the interest of the general public by restricting corporate powers. Fair trade will reduce the problems caused by
this is up by 50% from 1988, when they first signed a free trade agreement.
The goal of NAFTA was to systematically eliminate most tariff and non-tariff barriers to trade and investment between the countries. NAFTA has allowed U.S., Mexico, and Canada to import and export to other at a lower cost, which has increased the profit of goods and services annually. Because the increase in the trade marketplace, NAFTA reduces inflation, creates agreements on intern...
Some of the consequences of free trade as seen in the case of NAFTA include outsourcing of jobs to other countries, crowding out of domestic industries, poor working conditions among others. NAFTA led to shifts in jobs and production to Mexico as a result of free trade (Villareal & Fergusson, 2015). It has also been blamed for stagnation of wages in the US because of people moving to work in Mexico and Canada and companies also moving there because of the low production costs. According to the centre for Economic and policy research, a surge of imports lead to the US loosing 600,000 jobs in only two decades (Villareal & Fergusson, 2015). In Mexico, the trade is estimated to have put two million workers out of work due to agriculture that is highly subsidized by the US. This then led to increased rates of immigration into the US as people searched for better means of living (Weisbrot et al, 2014). Canada did not suffer any extreme effects as result of NAFTA. However, the productivity gap between itself and the US economy was not closed because its labour productivity remained at 72% as that of US levels (Villareal & Fergusson,
The first source is demonstrating the effect of the NAFTA which stands for North American Free Trade Agreement. The NAFTA is a political agreement between Canada, USA and Mexico, and the purpose of this agreement is to improve trading relations by decreasing trade barriers, by removing tariffs. The first source shows an image of a political cartoon. In this image there is a man with a sad expression on his face in front of a US factory, with a sign on the building saying “Labor Day: This year’s picnic will be held in Mexico, where your job went”. What the source is demonstrating is one of the negative effects of the NAFTA, which is job loss for Americans. The source shows this through symbolism and labelling: The sad man represents American
10-21- What are the basic arguments for and against extreme measures to fight unionization efforts?
These conditions led to massive anger. Workers were joining unions like the American Federation of Labor (AFL) in growing numbers, seeking a solution to their difficult circumstances. Unfortunately, the AFL leadership tried to win favor with the bosses by siding with them and rigging the union structures to maintain their privileged positions. But these lead to defeats for the workers and there demands.
Unions have an extensive history of standing up for workers. They have advocated rights of steelworkers, coal miners, clothing factory employees, teachers, health care workers, and many others. The labor movement is based on the idea that organized workers as a group have more power than individuals would have on their own. The key purpose of any union is to negotiate contracts, making sure workers are respected and fairly compensated for their work. “In theory” unions are democratic organizations, resulting in varying inner authority. Workers look for security within a job a...
Globalization has become one of the most influential forces in the twentieth century. International integration of world views, products, trade and ideas has caused a variety of states to blur the lines of their borders and be open to an international perspective. The merger of the Europeans Union, the ASEAN group in the Pacific and NAFTA in North America is reflective of the notion of globalized trade. The North American Free Trade Agreement was the largest free trade zone in the world at its conception and set an example for the future of liberalized trade. The North American Free Trade Agreement is coming into it's twentieth anniversary on January 1st, 2014. 1 NAFTA not only sought to enhance the trade of goods and services across the borders of Canada, US and Mexico but it fostered shared interest in investment, transportation, communication, border relations, as well as environmental and labour issues. The North American Free Trade Agreement was groundbreaking because it included Mexico in the arrangement.2 Mexico was a much poorer, culturally different and protective country in comparison to the likes of Canada and the United States. Many members of the U.S Congress were against the agreement because they did not want to enter into an agreement with a country that had an authoritarian regime, human rights violations and a flawed electoral system.3 Both Canadians and Americans alike, feared that Mexico's lower wages and lax human rights laws would generate massive job losses in their respected economies. Issues of sovereignty came into play throughout discussions of the North American Free Trade Agreement in Canada. Many found issue with the fact that bureaucrats and politicians from alien countries would be making deci...
(c) a requirement that firms with over 50 employees offer coverage or pay a penalty, (d) a major expansion of Medicaid, and (d) regulating health insurers by requiring that they provide and maintain coverage to all applicants and not charge more for those with a history of illness, as well as requiring community rating, guaranteed issue, non-discrimination for pre-existing conditions, and conforming to a spec...
Due to the distribution of wealth and insignificant legislative assistance, the poor are generally unable to improve their socio-economic status as wealth remains imbalanced. Recently throughout the years the building of foreign-owned factories and plants in some of Mexico’s rural areas has helped draw the population away from Mexico City and redistribute some of the country’s wealth. Since the creation of The North American Free Trade Agreement (NAFTA) in 1994 it has increased Mexico’s financial ties to the United States and Canada, but the Mexican economy remains fragile. Despite its problems, “the Mexican economy, with its growing industrial base, abundant natural resources and variety of service industries, remains important to Latin America. Mexico has become the Unites States second largest export market and third largest source of import” (CIA, 2017).