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Pros And Cons Of Nafta

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1. North American Free Trade Agreement (NAFTA): Signed in 1993, it is the most extensive free trade agreement and has promoted economic growth in its three signatory countries, i.e. the U.S, Canada and Mexico. Removal of tariffs between the partner countries in January 2008 led to decrease in costs of imports as well as reduction in inflation. This led to rise in investments and profits. People benefited from lowered prices of consumer goods as well as increase in jobs. Exports of goods as well as services such as healthcare and financial services received a boost. Since member countries are permitted to bid on Government contracts, the increased competition led to reduction in budget deficit. For a stable economy, it is essential for the budget deficit to be moderate and under control. As NAFTA provides protection for intellectual properties, it is advantageous for small businesses. So it helps in increasing Foreign Direct Investment. Multinational Corporations (MNCs) have the resources to impact the global economy. As NAFTA removes trade barriers, MNCs have a bigger market to operate in and can invest in product expansion and diversification. They can provide new jobs and improve labor …show more content…

Wal-Mart Stores which has a strong presence in the US market has not been so successful abroad due to lack of cultural adaptation and failure to understand shopping habits of customers, particularly in Germany, Japan and South Korea. Solutions to improve cross-cultural adaptations include socio cultural integration, i.e. mixing of cultures of the concerned countries; imbibing local values and forming local networks; creating a variety of products for the new markets; knowledge sharing with local agencies; a reciprocal relationship with the host country (Feng, 2014, pp 20-21) Wal-Mart has decided not to impose its culture on its non-American employees; show sensitivity towards other cultures; forge strong relations with labor unions and be careful about selecting

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