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The Pros And Cons Of NAFTA

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The North American Free Trade Agreement (NAFTA), which came into force in January 1994, is a negotiation by the governments between three countries Canada, Mexico, and the United States. NAFTA’s major purpose is to eliminate most tariffs on products traded among participated countries. The main focus was to liberalize trade in agriculture, textiles, and automobile manufacturing. Its aiming is to protect intellectual property and implement labor and environmental safeguards. In a 2012 survey of leading economists, 95% supported the notion that on average, U.S. citizens benefited on NAFTA. 1) Job creation/ GDP Usually when a country is experiencing economic growth, there is also an increase in employment. As a result, since trade liberalization can contribute to the increasing GDP, NAFTA helps bringing the rate of unemployment down in the U.S. In particular, from 1993-2005, the U.S.’s real GDP increased by 48%. The average unemployment rate during this period was …show more content…

Furthermore, economists estimated that each $1 billion in US exports supported 8500 manufacturing jobs. Moreover, in export-oriented industries, wages are 13-16 percent higher than the national average. The USTR showed that the overall U.S. employment has increased 24 percent since NAFTA's implementation, and the unemployment rates has declined over the same period. In addition, the USTR showed that inflation-adjusted U.S. wages rose 19.3 percent from 1993-2007, compared to only 11 percent in the previous fourteen years. Thanks to import competition, prices fell and the quality of goods improved, which significantly benefit consumers. In a 2014, in the study of PIIE about NAFTA's effects, each year, jobs on net lost about 15,000 because of the agreement; however, for each of those jobs lost, the economy gains $450,000 because the productivity is higher and the consumer prices is

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