In the past three decades, there has been a remarkable emergence of developing nations as significant players in the global economy, such as India and China. The cumulative exports of all developing nations have been increased over this period. Also, there has been a significant growth of investments that took place in developing countries in the form of industrial firms and portfolio investors. Over the same period, the foreign direct investments in relation to GDP increased by three-fold for the developing countries.
But, the situation is not the same for poor countries. The poorer countries have raw materials of a majority share that could be exported, but are not processed. For this reason, they have become vulnerable and less competitive
…show more content…
NAFTA created a free trade area in North American region. The North American Free Trade Agreement (NAFTA) was established in January 1994. The agreement was formed to eliminate barriers to trade and facilitate increased flow of goods and services among its member countries. The NAFTA trade bloc has a total population of about 478.1 million.
The bloc has a combined GDP of more than $20 trillion. The trade among member countries represents 30.23% of total trade flows in the world. NAFTA trade amounted to $1.15 trillion as of 2015. It created five million new US jobs. Canada and Mexico invested $240.2 billion in the USA. The USA companies invested $452 billion in Canada and Mexico. The USA imports $294.7 billion from Mexico; this is almost as much as it imports from China. The imports include crude oil, manufactured products, vegetables, fruits, coffee and cotton.
In the past 20 years, imports from Canada and Mexico to the USA have increased 244%, while exports from those countries from the USA have increased 218%.
Benefits of NAFTA
• Free trade increased sales in USA, Canada and Mexico for strengthening their