NAFTA: Economic Net Positive or Net Negative for United States?
The North American Free Trade Agreement (NAFTA) is a free-trade deal between the United States, Mexico, and Canada. The agreement was signed in January 1994 by U.S. President Bill Clinton, Mexican President Carlos Salinas, and Canadian Prime Minister Jean Chrétien. The objective of NAFTA was to eliminate barriers to trade and investment between the three countries. As part of the terms written in the agreement, the tariffs were phased out slowly, and final aspects of the deal weren’t fully executed until January 1, 2008. (Sergie)
Back when the North American Free Trade Agreement was first established and even before full immersion, a lot of people saw it as having a negative impact on the United States, but over the years, as a whole, the NAFTA was a positive agreement for the United States;
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The trade between the U.S. and Mexico was already growing before the NAFTA agreement was implemented; however it has increased significantly over the first two decades “from roughly $290 billion in 1993 to more than $1.1 trillion in 2012.” Two other industries that have flowed is investment and travel. Surprisingly (at least to me), is that The United States handles more trade with Canada and Mexico than six major countries combined. Those to include China, India, and Japan. (Sergie)
Despite the job loss in the beginning, a study by the Federal Reserve shows that there has been an overall increase in wages. U.S. by 0.17%, Canada by 0.96%, and Mexico by 1.3%. I believe the increase in wages for Mexico could be due to the high demand of employees since their manufacturing industry as grown. However, more recently the illegal immigration issues have increased. Immigrants likely come to the U.S. for work because even though we pay them considerably less than the American employee, they can still make more money in the United States vs. Mexico.