Regional Analysis: North American Free Trade Agreement In today's globalized economies, virtually every country in the world belongs to some form of regional integrated trade organization whether by direct membership, bilateral or multilateral agreement. Regional integration is a process by which sovereign states in a particular region enter into an agreement to promote economic growth through the reduction of barriers to trade restrictions and safeguard common interests such as the environment. The removal of trade barriers results in a free trade zone thus creating a single market. Sovereign nations have many differences, some may be more economically sound and others may have a greater labor force or better technology. In the end, all regional nations must find a method to work together for the common good of all parties. The development of the North American Free Trade Agreement (NAFTA) was to solidify the nations occupying the North American continent, Canada, the United States (U.S.) and Mexico. Many proponents question the success of NAFTA for these nations. This essay will examine the advantages and disadvantages of regional integration and the regional economic development of these nations as members of NAFTA. NAFTA is trade agreement implemented January 1, 1994 between the U.S., Canada and Mexico which removes restrictions on trade between the three countries to encourage free competition, improve investment opportunities and increase market access "for small and medium-sized enterprises (SMEs)" (Tomasetti, H., 2004). Some of the advantages NAFTA has afforded its members are the eradication of tariffs, product price reductions and increased profit margins. NAFTA has eliminated tariffs on all goods traded betw... ... middle of paper ... ...oor results of NAFTA in Mexico leaves one asking who truly benefits from NAFTA and are the countries in the Northern Hemisphere prepared for regional integration under a multilateral or unilateral agreement. References Hill, C.W.L (2005). International Business: Competing in the Global Marketplace (5th ed.). McGraw-Hill/Irwin. New York, NY Moreno-Brid, J. C. (2007). Economic development and industrial performance in mexico post-nafta. Retrieved January 25, 2008 from http://www.eclac.cl/celade/noticias/paginas/3/28353/JCMoreno.pdf Senate Committee of Foreign Relations (2004). NAFTA: Ten years after. Retrieved January 24, 2008 from http://www.america.gov/st/washfile-english/2004/April/20040420162429AEneerG0.7202722.html Tomasetti, H. (2004). The benefits of nafta for smes. Retrieved January 23, 2008 from http://www.ita.doc.gov/td/tic/fta/nafta/roo.htm
The goal of North American Free Trade agreement was to eliminate barriers of trade and investment between the United States, Canada, and Mexico. The implementation of the agreement brought the immediate removal of tariffs on more than one-half of U.S. imports from Mexico and more than one-third of U.S. exports to Mexico. Within ten years of the implementation of the NAFTA agreement, all United States and Mexico tariffs would be gone. The only tariffs that would remain would be those that deal with U.S. agricultural exports to Mexico. However, these were to be slowly phased out within fifteen years of the initial implementation of the program. NAFTA also seeks to eliminate all non-tariff trade barriers.
After three years of debate NAFTA was established in 1994. Fears concerning NAFTA included job creation, loss and transfer, wages and infrastructure. (Ganster/Lorey 188-189) However, with the implementation of NAFTA the economy grew. Ganster and Lorey reveal that bilateral trade increased by $211.4 per year from 1989 to 2004. Commerce grew by 20 percent in the first six months of 1994. There were advantages and disadvantages of NAFTA, nevertheless, NAFTA “intensified the integration of the two economies rather than distancing them.” (Ganster/Lorey 190)
Throughout history, the United States has initiated policies, peace agreements, or laws which were believed to bring prosperity, and success, however those policies as a result were created in the U.S. best self-interest. One of these policies is known as NAFTA, which was a trade agreement created to open up free trade around the globe, however this policy backfired, deeply scaring and deteriorating the Latin American economy, and its people. Specifically, NAFTA known as the North American Free Trade Agreement, took effect on January 1, 1994 was a treaty which entered by the United States, Canada, and Mexico used to eliminate tariff barriers, in order to encourage economic prosperity between these three countries. A quarter century later, the
The North American Free Trade Agreement (NAFTA) is an agreement between America, Canada And Mexico that coincides a triune free trade economic bloc between the three countries. NAFTA was a necessary deal to be made between the North American Nations to compete in the “Economic World Order”. NAFTA was first designed and drafted by American president George Bush senior, Canadian Prime minister Brian Mulroney and Mexican president Carlos Salinas on December the 12th 1992 in San Antonio Texas. NAFTA’S original creators where not the men that finalized the triune trade bloc but instead NAFTA was redrafted to appease all recipients of the deal and its respectful citizens. NAFTA was finalized and singed on December the 8th 1993 by American president Bill Clinton, Canadian Prime Minister Jean Chretien and Mexican President Carlos Salinas. NAFTA came in to full effect on January the 1st 1994. The history of NAFTA and its negative and Positive effect and the necessity of NAFTA will all be explained in this paper.
With The North American Free Trade Agreement as a main example, the opposing view for the agreement include groups of citizens involved in manual labor and various spiritual groups. These citizens argued that free trade would eventually take away hundreds of American jobs. They believed the trade agreement would take away all democratic power of domestic procedure. On the other hand, there are positives for having the NAFTA set into place. Some of the world 's largest corporations promised it would create hundreds of thousands of new high-wage American jobs, raise living standards in all nations involved and above all else the agreement would improve environmental conditions. The North American Free Trade Agreement was promised to transform Mexico from a deprived developing nation into a thriving new market for American exports to be
In January 1994, the United States, Mexico, and Canada implemented the North American Free Trade Agreement (NAFTA), forming the largest free trade zone in the world. The goal of NAFTA is to create better trading conditions through tariff reduction, removal of investment barriers, and improvement of intellectual property protection. NAFTA continues to gradually reduce tariffs on set dates and aims to eliminate all tariffs by the year 2004. Before NAFTA was established, investing in Mexico was a difficult process. Investors needed the Mexican Government's approval and were also required to meet specific investment guidelines. These requirements necessitated investors to export a set level of goods and services, utilize domestic goods and services, and transfer technology to competitors. Under NAFTA, investors no longer need government approval to invest and are treated as domestic investors. NAFTA has also increased intellectual property rights and allowed companies to obtain patents in Mexico and Canada. In the past, companies were hesitant to export research and development intensive goods; with increased intellectual property protection, however, exports of these goods have shown a definite increase. As a result of better trading conditions, exports and imports of most other goods have increased along with the research and development intensive goods. In Mexico, the elimination of investment barriers has allowed investment to expand. Increased trading and investment has then created many jobs, raised the Gross Domestic Product, and lowered consumer prices.
NAFTA, or, the North American Free Trade Agreement is an agreement signed by the USA, Mexico and Canada that effectively reduced and sought to eventually eliminate all tariffs from items traded between the three countries. This trade bloc has very directly affected the state of Texas as it is right on the border and actually comprises most of the border between Mexico and the United States. NAFTA, enacted in 1942 under President Bill Clinton, has to date increased exports from Texas to Mexico by 53% and created over 190,000 new jobs in the state of Texas (Texas Public Policy). This is not to say that NAFTA is without fault. The agreement, according to the Department of Labor, has hurt 21,019 jobs in Texas and cost many Mexican citizens their
The NAFTA is involved in this phenomenon because since the agreement involves Mexico it in turn creates job opportunities for the Mexicans and on top of that Mexican workers are part of an underdeveloped country which in turn means they are going to get less money due to the condition of their economy. And for American businessmen that is a very desirable quality in a potential employee due to how much profit the companies and factories will make simply by giving more low paying jobs to Mexicans and decreasing the American workforce. This source relates to economic globalization, because the NAFTA is essentially an economic agreement between major countries to save money and reduce trading taxes. This agreement causes an economic rise in all of these countries by causing an increase in jobs in Mexico and increasing companies’ profits in the US and
Roughly fifteen year ago the United States entered into an agreement with its neighboring countries Canada and Mexico. With the incarnation of this intercontinental free trade agreement; the United States acting as the conduit would not only increase trade productivity for itself but, allot its sister nations to the north and south the same advantages. The North American Free Trade Agreement (NAFTA) is beneficial to America because, it encourages the expansion of job opportunities, abolishes taxes and tariffs that can restrict the flow of imports and exports, and supplies the States with goods and services at lower costs causing profits to increase exponentially.
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...
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...
The North American Free Trade Agreement—NAFTA—was an important agreement signed between three countries—the U.S., Mexico and Canada. NAFTA played an important role between each of these countries’ relations with one another through imports and exports. Throughout the presidential elections throughout the years, NAFTA has been highly debated on whether or not it has helped benefit the economy of these countries or if it has caused a lot detrimental issues. NAFTA promised many benefits for these countries, but not all of their promises were carried through; many views across the political spectrum also have their indifferences about NAFTA.
On the 1st of January 1994, the North American Free Trade Agreement (NAFTA) came into effect. It eliminated all the major tariffs amongst the countries , of the United States, Canada and Mexico. It has been considered positive by all the major outcomes, but nobody takes in consideration what is really happening. Mexico being our brother country is being negatively impacting its resources, land, and people . Cheap labor and awful working conditions keeps America sky high in its economy. There are many ways that one can change this agreement and make it just for the economy of each country.
On January 1st 1994, the North American Free Trade Agreement went into effect. The purpose of NAFTA is to reduce and eventually erase trade barriers, allowing the importing and exporting of goods and services to occur with ease. NAFTA began life as an agreement between the United States and Canada, and then in 1992, Mexico joined the venture. The union of these countries made sense, mainly because of their proximity to each other, and the benefits that each would soon come to realize. Some of the key contents in the NAFTA agreement include a removal of tariffs on goods, protection of intellectual property, and easier access to invest in foreign industries. These new trade agreements would increase the flow of cheap goods from Mexico to the U.S., thus lowering cost of living, and create higher paying jobs for the indigenous Mexican workers (Chomsky).
Low tariffs on import increases jobs outsourcing which will negatively affect the employment opportunities in developed countries. The RTA signed between US, Mexico and Canada (NAFTA) reduced tariffs on imports allowing foreign companies to expand and outsource their production. (EPI, 2003) As a result, the bargaining power of American workers was undercut. (Faux, 2013) NAFTA caused the loss of 700,000 jobs as the production moved to Mexico. The jobs lost were mainly from California, Texas and Michigan, where the majority of US manufacturing relies. Besides that, the majority of the workers who lost their jobs suffered a permanent loss of income. (Faux, 2013) Moreover, NAFTA enabled the US employers to force workers to accept lower wages and benefits and blackmail local governments into giving tax reductions for their corporations and other subsidies. (Faux,