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The Pros And Cons Of NAFTA

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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 …show more content…

The original aim of Chapter 11 was to guarantee a fair and equitable trade of goods between the NAFTA countries (Sinclair, 2). Chapter 11 involves process of investor-state arbitration which allows investors of a signatory country to bring to trial another government of NAFTA on the grounds that the state has breached the agreement (Sinclair, 3). Chapter 11 is a significant piece of legislation as it is allows individuals for private individuals to bring a suit against a foreign government. The party to bring suit does not require to be a government and rather must be an individual investor or company. The chapter allows investors to bring proceedings against a government in an international tribunal. Any breach on obligations outlined in Chapter 11 can warrant investors to bring a suit. Once the breach has been established, the tribunal determines whether the investor is entitled to monetary compensations. Obligations outlined in Chapter 11 include the guarantee that NAFTA investors cannot be given unfavourable treatment compared to domestic investors (Sinclair, 3). Chapter 11 also states that investors must be treated with respect in accordance with standards of international law (Sinclair, 3). The third main obligation of chapter 11 prevents NAFTA states from expropriating the investments of another NAFTA party without appropriate compensations (Sinclair,

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The North American Free Trade Agreement, otherwise known as NAFTA, is an international trade agreement between Canada, Mexico, and the United States, designed to remove tariff barriers between all three nations. Signed in the January of 1994 with final implications made in 2008. This has created substantial economic growth for Canada and its other two counterparts. NAFTA has increased trade for the Canadians, and as a result has created lots of jobs for Canada. Overall, NAFTA has been extremely beneficial for Canada since it was established in 1994.

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Along with the Confederation to begin the formation of Canada, the reciprocity debate of 1911 and NAFTA further impacted the development of Canada, because of its economic significance. The reciprocity debate of 1911 and NAFTA pronounced Canada economically through the flourishing of trade with other countries. The reciprocity agreement between Canada and the United States was instated to protect tariffs on goods traded between the two countries. Consequentially, the economy for Canada increased, with exports to the United States growing by 33%, post treaty.

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NAFTA has had a beneficial effect on the automotive business, “NAFTA helped the U.S. auto industry survive”(Hanson), without the help of this trade agreement cars would be produced at a much higher opportunity cost. Although now, the U.S. is able to trade with Mexico and Canada who are both making car parts at a lower price while still producing efficiently, “The U.S. auto industry designed a very efficient production network that spanned the U.S., Mexico and Canada. ”(Hanson). The trade agreement made products from Mexico and Canada cheaper to import. ,“NAFTA increased farm exports because it eliminated high Mexican tariffs”(The Balance).

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Both articles discuss what purpose The North American Free Trade Agreement (NAFTA) should serve. However, the authors have different views regarding NAFTA. I am analyzing the second article because I appreciate the way the author portrays NAFTA. The author, Mark Milke, focuses on the benefits of the free trade agreement by using normative, positive, and analytical statements. These statements help him further the case he is making in his article.

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This, however could be challenged by the World Trade Organization. The other country in NAFTA, Canada, has said it will also pursue trade advantages with Mexico when NAFTA is renegotiated. The article explains that a NAFTA withdrawal by the U.S. “would likely bring up thorny issues that have long dogged relations, including softwood lumber imports from British Columbia” (Mauldin) as well as Canadian cattle which are raised for the U.S beef

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The Factors Model theorizes that owners of relatively-abundant factors should support free trade like the TPP. The United States is relatively abundant in capital and land. This means that owners of land and

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