The Expansion of The North American Free Trade Agreement

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The Expansion of The North American Free Trade Agreement

Should the United States Pursue the Expansion of NAFTA?

Statement of the Problem

The North American Free Trade Agreement (NAFTA) entered into force on January 1, 1994. It created the world's largest free trade area: 380 million people producing nearly $8 trillion worth of goods and services. One of NAFTA's primary objectives is to, "contribute to the harmonious development and expansion of world trade and provide a catalyst to broader international cooperation" (US Trade Rep.). To ensure its role in advancing world trade NAFTA must expand its boundaries to the Caribbean as well as Central and South America.

Assumptions

The NSS claims that enhancing access to foreign markets is necessary for promoting prosperity. It states, "Our prosperity as a nation in the twenty-first century also depends upon our ability to compete and win in international markets"(NSS). The expansion of NAFTA into Central and South America will benefit US trade by reducing tariffs in one of the fastest growing regions in the world. The reduction of tariffs will improve the US' ability to access foreign markets by virtually eliminating the costs to enter the markets. This will enable US corporations to sell their goods at lower prices, therefore allowing the people of the region to purchase US goods. This ability to access such markets will eventually increase the number of capital intensive jobs available in the US. The institutions and mechanisms that NAFTA created have smoothed the path to allow North American businesses to trade, invest and position themselves for better productivity and comparative advantage, thus making our economies stronger against shocks, such as Mexico's...

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