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The Pros And Cons Of NAFTA

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Introduction Across America, the landscape of job opportunities has changed drastically since the implementation of the North American Free Trade Agreement (NAFTA) in 1994. This trade agreement between the countries of Canada, the United States of America, and Mexico set out to eliminate tariffs on goods originating in one of the other countries. To those in power, the opportunities appeared endless, with minimal repercussions to affect the overwhelming growth that such an arrangement could bring to North America. In the process of shifting to this policy, as the old adage goes: “the rich get richer, and the poor get poorer.” While the country of Mexico benefited largely from the many industries that packed up from the United States …show more content…

After an introduction to Elite Theory, this report will provide a background of NAFTA and its effects on Canada, Mexico, and the United States. This will show the state of trade in North America in the 1990’s, prior to NAFTA, and address the immediate impacts upon enacting NAFTA, which will show the inadequacies of the Elite Theory. Next, this report will provide an evaluation of NAFTA in present day, proving that the benefits promised did not occur quite how they were construed. Furthermore, this report will offer alternatives to NAFTA, developed with the intention of benefiting the United States more so than the current agreement. Lastly, this report will conclude with a recommendation moving …show more content…

From the perspective of the United States, four main shifts occurred that negatively impacted the U.S. economy. First, 700,000 jobs shifted to Mexico from the United States (Faux, J. (2013, December 9)). The heavy manufacturing state of Michigan and the border states of California and Texas felt the brunt of the exodus of jobs along with other states who had a strong manufacturing presence (Faux, J. (2013, December 9)). While the U.S. did add some jobs along the border, these jobs were low paying retail and service positions that did not alleviate the loss resulting from NAFTA. Secondly, companies in the U.S. gained the ability to force workers to accept lesser pay with the threat of moving the company to Mexico where labor came at a massive discount (Faux, J. (2013, December 9)). This tactic did not stop with wages, but expanded to labor unions and tax incentives. Companies basically used the threat of moving jobs to Mexico as a bargaining chip to receive whatever they asked (Faux, J. (2013, December 9)). Thirdly, agriculture and small business markets in Mexico suffered from the influx of big corporations, resulting in millions of workers without employment (Faux, J. (2013, December 9)). This led to many of those workers illegally crossing the border into the U.S., driving down already lessened wages due to the underhanded tactics of the big corporations (Faux, J.

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The Struggle for Labor Rights on Mexican Maquiladoras María Eugenia de la O Introduction The 1960s, hundreds of foreign assembly factories were established along the Mexico-United States border cities as a result of increasing labor force costs in industrialized nations, and also as an economic strategy of the Mexican government who provided tax incentives, infrastructure and low wages to the new investors. Decades after, in the 1990s, Mexico, Canada and United States signed the North American Free Trade Agreement (NAFTA), consequently thousands of factories -call maquiladoras- be transformed into an important source of foreign investment and jobs to Mexico. Currently there are thousands of maquiladoras in the nation; according to recent

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The maquiladoras have succeeded in holding wages down to about $1.25 an hour, which is still about 20 percent above the Mexican minimum wage”c01. The workers are being paid below that minimum wage, this is allowed because the maquiladoras are foreign owned companies. The Mexican workers know they're being underpaid but they have no other option but to accept it because finding jobs are very difficult. Drucker writes, “Practically all new jobs created in Mexico in the past decade are in maquiladoras; they now employ almost 500,000. Maquiladoras account for four-fifths of the country's manufactured exports and for two-fifths of its total exports to its biggest customer, the U.S.

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Ever since the NAFTA trade agreement was signed in 1994, it has created huge economic growth between all three countries. Among the three countries, an increase in trade has boosted the Canadian

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If I didn't believe that, I wouldn't support this agreement.” NAFTA has constructed more jobs in different sectors from automotive to energy and agriculture. Jobs are also established in areas of

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In a room, full of individuals who are pro-Globalization, Rattner goes against the tide to bring to light the potential loss of jobs and decline in wages in manufacturing jobs as a result of the North American Free Trade Agreement. Such trade policies that dominate the market tend to favor big,

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In addition, the trade lowered prices. Mexican oil is imported for less than before the agreement. That reduces U.S. gas costs. It also decreases reliance on oil from the Middle East. Lower gas prices mean food can be transported more cheaply, reducing grocery bills.

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Mexico: During the restructuring of Mexico's economy into the new neoliberalism, system wages dropped for the working class people by over 80%. In a society that is controlled by corporations, this faired quite poorly for the Corporate Elite because the lower class could no longer afford to support themselves, much less spend money in their companies. The public safety net relied mostly on the taxes from the upper two tiers of society; this consisted of social programs, welfare, public education, healthcare, etc. Neoliberal advocates argued that the rich should not be responsible for the lower end of society.

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Scott Frey, a sociologist at the University of Tennessee, uses Maquiladora factories located along the Mexican side of the U.S-Mexico border as examples of EPZs. Maquiladoras are mostly foreign-owned factories using imported materials for export, with more than eighty percent being located in the northern border areas of Mexico. Like many states of the periphery, Mexico has pursued export-oriented industrial policies in order to attract industries. Reports during the 1980s show an increased investment in maquiladoras as U.S pollution abatement costs increased, also, many of the U.S corporations lobbying for the North American Free Trade Agreement (NAFTA) were major polluting industries (Frey 322). In 1986 Mexico entered the General Agreement on Tariffs and Trade (GATT) which liberalized trade restrictions in Mexico (Frey 324).

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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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The negative effects included displaced Mexican workers crossing the border illegally, exploited Mexican workers, deterioration of the Mexican environment, and an increased trade deficit in the United States. However, from an economic view, it is clear that NAFTA is a successful accomplishment. It has allowed the United States to be a strong trade competitor and helped to reduce the amount of unemployment. Of course, there are always areas that could benefit from

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The Trans-Pacific-Partnership (TPP) is a recent trade agreement between twelve pacific nations that failed to get final approval from U.S lawmakers. The trade deal pushed by President Obama was rejected by Senators of both parties who were feeling political pressure from their constituents and interest groups. Two different ways to explain the defeat of the TPP are by examining the Factors Model and the Sectors Model. The Factors Model hinges on the idea that a country’s economy consists of three main factors: land, capital, and labor.

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NAFTA took effect in January of 1994.Its main purpose is to increase the agriculture trade and investment among the three countries. According to the department of agriculture, Mexico lost over 900,000 farming jobs in the first decade of NAFTA. ( McKenzie, 2015 ). Before NAFTA people of Mexico grew corn and was able to support their family and country economy. Shortly after NAFTA cheap American corn came pouring in form the borders, which caused a major effect on families that were working in farms in Mexico.

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This made the migrant workers spread out to other places because they lost all their jobs. So the government had to illegally deport them to different places. Over 15 million people lost jobs during this period of time. American Dream

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Many of them had to look for jobs in other areas because the farm owners were paying them half the normal wage. The farm owners took advantage of these worker because they saw that there were many of them that needed jobs and all this happened during the great depression. Many local authorities repatriated Mexicans, a total of 400,000. What would happen is those who were repatriated would be brought back to work but then sent back and that would become a cycle. Then with this happening many Anglos from the south would come and work by 1937 80 to 90 percent of farm workers were Anglo-Americans.

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The costs to import crops would increase the amount of businesses leaving America for cheap labor elsewhere. In response, Donald Trump planned to draw businesses and mass production companies to the US in order to increase manufacturing jobs. By persuading companies to resettle in the US, businesses would be harming themselves. With the large amount of unskilled Americans, many employees

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