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Pros And Cons Of North American Free Trade Agreements

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Free trade agreements (FTAs) are treaties between nations and aim to reduce barriers to trade. FTAs assist in the protection of local markets and industries and increase the scope of people to which they can sell their products. Additionally, they are designed to increase competition, leading to variety in customer choice and lower prices for products, subsequently benefiting consumers. FTAs can have varied implications for organisations, employers and related stakeholders through both economic and social aspects. Free trade is able to allow for businesses to thrive through a comparative advantage, and allows for businesses to expand through diversity and expertise. Yet they may prove detrimental to nations, hence organisations, involved, due …show more content…

Agreements with countries such as Japan can help to increase the Australian economy, create more jobs and benefit consumers. It is expected that over the next few years, this agreement will result in the creation of thousands of jobs whilst improving households who will be $4000 better off. The Australia-Japan agreement also meant that tariffs on Australia’s biggest cultural export halved. This meant that Australian consumers benefited from the downward pressure for prices on Japanese cars, car part and various household items. Additionally, the benefits to the agricultural and manufacture sectors will enable businesses to have a comparative advantage. The elimination of tariffs has allowed the participants of The North American Free Trade Agreement (NAFTA) to focus on efforts on natural advantages. While the U.S. has an advantage in producing high-quality goods for low costs, Mexico is able to produce certain foods at a lower cost. Hence both countries are able to purchase one another’s products at a cheaper price and is an intention of FTAs. Consequently, exporters are able to produce more, increasing their nation’s Gross Domestic Product. (GDP). This can also lead to economies of scale for a business. Thus free trade allows for countries to benefit from a comparative advantage they may have in producing goods and services. Coupled with tariff …show more content…

Further, movement of labour also increases economic status of people through the creation of jobs. As a result, there may be a gradual reduction in poverty, asserting that FTAs may be of benefit to developing countries. For instance, under NAFTA, 200,000 export-related jobs are created annually, providing incomes between 15-20% more than manufacturing jobs that have been outsourced from America. Additionally, developing countries have the ability to transfer their highly skilled labour to developed countries accounting for high performance in domestic industries leading to an increase in productivity and economic growth. Global companies have more expertise to develop local resources more than domestic companies, and is evident in mining, oil drilling and manufacturing companies. In addition, these local companies gain access to technology which is vital to higher growth (Asid and Khalifah, 2016). This economic growth is reflected in an increase of gross domestic product and exports for developing countries such as Africa and East Asia. For example, much of Latin America’s middle income level countries have paired with countries such as China resulting in financial system improvements. (Chen and Emile, 2013). Hence a shift in manufacturing industries is evident due to the attraction of investors to said country.

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The North American Free Trade Agreement (NAFTA) is a three-country accord negotiated by the governments of Canada, Mexico, and the United States that entered into force in January 1994. NAFTA’s terms, which were implemented gradually through January 2008, provided for the elimination of most tariffs on products traded among the three countries. Liberalization of trade in agriculture, textiles, and automobile manufacturing was a major focus. The deal also sought to protect intellectual property, establish dispute-resolution mechanisms, and, through side agreements, implement labor and environmental safeguards.

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There are many debates regarding NAFTA although it is considered to be the largest free trade agreement. By terminating tariffs, NAFTA rises investment opportunities. “The efforts of those opposing NAFTA were unsuccessful because President Clinton effectively did what all presidents before him have done when in need of congressional support. He cut deals with and twisted the arms of members of Congress in order to win the day.” (Livingston & Wink, 1997).

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While the abolishment of tariffs between the US and Canada is seen as one of main benefits granted by NAFTA, the FTA originally eliminated most barriers of trade between Canada and the US . NAFTA granted Canada access to the Mexican market and provided export opportunities for in financial and automobile sectors. While the US and Canada had planned for a thorough integration of the Mexican energy trade, they remained unable to break the monopoly of Mexico’s national oil company, Pemex (M. Angeles Villarreal & Ian F. Fergusson, 18). However, NAFTA nonetheless allowed for a greater access to the Mexican energy sector. In 2015, the US was the largest investor in Canada with a total stock of Foreign Direct Investment totalling 325.9 billion whereas

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The North American Free Trade Agreement (NAFTA) is a free trade agreement between the three North American countries: Canada, United States, and Mexico. The agreement was signed by the presidents and prime minister in 1992, but it came into force by January 1, 1994 after being ratified by each nation’s legislative or parliamentary branch. The main goal of NAFTA was to eliminate trade and investment barriers, and its provisions were divided into four categories: intellectual property, environment, agriculture, and transportation infrastructure. Two decades after the signing, NAFTA has shown its significant impact on the economy of each North American nation. Proponents and critics have long been debating on the effects of NAFTA, and it becomes

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The North American Free Trade Agreement has provided many benefits for North America. Because of NAFTA, trade, jobs, and economic growth have greatly increased between Mexico, the United States, and Canada. Along with these advantages many drawbacks can be found. One of the major issues concerning NAFTA is the agricultural competition between the United States and Mexico. NAFTA needs to address the conflicts that Mexican farmers are facing because a large portion of Mexican farmers are losing their jobs, making sacrifices, and stressing their lands causing environmental problems.

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The North American Free trade Agreement is one of the regional trade blocks in which its members are characterize by different sources of national capital. It is a treaty between the United States, Canada, and Mexico enacted in January 1, 1994 with the purpose of eliminating or reducing tariff barriers among its members and to remove investment restrictions and protect intellectual rights. According to the article, N.A.F.T.A. stablish some standards or parameters, the three countries agreed to toughen health, safety, and industrial standards. The treaty was created in order to make it easier between its members to trade, but, numeral negative impacts has affected its members that has led to many people argue if the North American Free trade Agreement overcome its negative impacts on the economy.

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This paper will examine the pros and cons of the current US-Mexican economic relationship established through NAFTA. Specifically, it will examine how NAFTA can be improved to strengthen the Mexican economy and to define the reforms necessary on behalf of both countries. The North American Free Trade Agreement was signed by the U.S., Mexican, and Canadian presidents on December 17, 1992, on the proposition of bringing more jobs into the three countries. The immediate intention of NAFTA was to break trade and economic barriers and protect established capital on negotiated products between the North American countries. The initial pursuit of NAFTA conveyed the discarding of tariffs on Mexico and the U.S.

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Recommendations NAFTA had specific advantages and disadvantages for each country and for specific areas within each country. It is important to examine each area to determine if the benefits outweigh the cost. It is clear that there were several benefits to trade and procedures between each of these countries but were the benefits received from trade enough to outweigh the negative effects on other areas.

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NAFTA has also benefited United States Of America in multiple ways, including the way it has reduced USA’s trade deficit. The trade deficit between the United States and Mexico and Canada has increased by an average of 150 billion dollars per year, and produced a trade surplus in the United States favor of $28 billion after 15 years of trade. Doing this it has also increased USA’s investment of tangible assets, including mining, manufacturing, insurance, and banking. The investment in USA’s money in tangible assets in Mexico and Canada has increased by 2 percent e year since NAFTA has been signed. One major benefit that US obtained during this agreement was having lower oil prices.

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NAFTA (North American Free Trade Agreement) sets the trade and investment rules between Mexico, United States, and Canada. The agreement came into effect during the term of President Bill Clinton in 1994 and helped in eliminating both tariff and non-tariff trade barriers between the member countries. The agreement has supported economic growth (Graubart, 2008). NAFTA comes with many advantages and limitations that affect all the member countries. NAFTA led to the reduction of tariffs, which made it easy for Americans to purchase products from Mexico and Canada.

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Since it’s beginning in 1994, the North American Free Trade Agreement has sought to reduce trade and investment barriers between the United States, Mexico and Canada. While NAFTA has been largely successful in facilitating free trade between the countries, it has been incredibly detrimental for U.S. employment and production. Ultimately, although NAFTA has caused the Mexican GDP to rise, it has significantly impaired economic expansion in the United States. As a result, it would be in the best interest of the United States to renegotiate the agreement with Mexico and Canada in order to prevent outsourcing and return jobs to the U.S. Out of the provided major provisions of NAFTA, the most negative are the reduced tariffs on automobiles and

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The North American Free Trade Act (NAFTA) came into effect on January 1, 1994. One of the promises of the Trump administration in the US was to renegotiate the trilateral free trade deal, which operates between Canada, Mexico, and the United States. While trade talks about the deal have been contentious, experts have long speculated NAFTA is good for Canada. On the other hand, many people were opposed to the deal when it first arrived nearly a quarter-century ago, and there are those who believe NAFTA has done more harm than good for the great white north. Continuing trade talks have left many wondering what influence NAFTA has on Canada’s imports and exports.

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NAFTA, or the North American Free Trade Agreement, was a trilateral agreement signed by the United States, Canada, and Mexico in 1994, aimed at creating a free trade zone in North America. Its primary goal was to eliminate trade barriers between the three countries, including tariffs and other restrictions on goods and services. The agreement was meant to facilitate economic integration and promote cross-border trade by reducing costs, increasing efficiency, and improving competitiveness among the three countries. One of the major controversies surrounding NAFTA was its impact on employment. Critics argued that the agreement led to the loss of jobs in the United States and Canada, as companies relocated to Mexico to take advantage of lower labor costs.

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It was argue that the NAFTA cons outweigh it pros. From 1994 to 2012 the U.S imports and exports percent grown. ” U.S. exports to Canada and Mexico have climbed 201 percent and 370 percent, respectively and the value of imports into the U.S. from Canada and Mexico has jumped by 194 percent and 621 percent, respectively.” (Glassman, 2013) Since NAFTA, the U.S had negative impacts as well. “The U.S. trade deficit with Mexico has grown dramatically, from a trade surplus of $4 billion in 1993 to a deficit of $54 billion in 2012.

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