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Economic Effects Of NAFTA

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As it is known The North American Free Trade Agreement (NAFTA) was created in January 1994. It has brought economic growth and prosperity for Canada, the United States and Mexico.
There were big expectations for the organization, but the effects of it came to be in a long-term time, not just a few years. In its first ten years NAFTA had small economic effects on Canada and the US, but mostly on Mexico. Although since then the influence of the organization came into effect. Economists predicted that overall the effects would most probably go at Mexico rather than Canada and the US. They find that Mexico's agreement towards the United States income has increased since NAFTA, but Mexico's growth over this time hasn’t changed much with the growth …show more content…

NAFTA has certainly increased US-Mexico trade, but has little effect on US-Canada and almost none on Mexico-Canada. NAFTA has essential effect on international trade quantities, but less on prices and welfare in member countries or nonmember. Also it is suggested that there is almost zero welfare impact on member or nonmember countries. The organization has increased North American output and prices in many sectors by pulling out imports from nonmember countries. This might lead into future confrontations. Mexican export to the United States had a huge increase when they entered NAFTA, but it is difficult to disentangle the effects of it from the effects of before that. In my opinion if NAFTA is continuing to have a substantial impact on international trade volumes and an almost no effect on prices and welfare it will bring consequences which won’t be positive at all. The balance is missing and it be long before things go south. Although it is found that the effects on trade volumes are more important or sufficient than the effects on welfare or prices. NAFTA generated sufficient trade effects, mostly of trade in intermediate goods which are used as inputs to produce other intermediate and final goods. It is found out that

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