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The Pros And Cons Of NAFTA

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A recent argument, which brought globalization into the spotlight during the latest presidential debate, is NAFTA (North American Free Trade Agreement). According to the article “NAFTA’s Economic Impact” by James McBride and Mohammad Aly Sergie, President Donald Trump has promised to get rid of this agreement. He states that this agreement has taken manufacturing jobs from the rural communities and these jobs ended up in Mexico. This was an agreement between Canada, United States, and Mexico that begin in the early 1990’s. According to the article “North American Free Trade Agreement (NAFTA)” NAFTA immediately allowed free trade throughout North America elevating tax from products and services across the borders of Canada, Mexico and the United States. Controversially, in the early nineties the Mexican President viewed NAFTA as a way to modernize and improve the economy of Mexico. …show more content…

In the 1990’s “Mr. Perot famously predicted that if NAFTA is enacted, Americans will hear ‘a giant sucking sound’ of jobs heading south of the border” according to the book Globalization by Donald J. Boudreaux. Ross Perot had some concerns about the wages of Mexico being much cheaper than the United States. This cheaper labor would entice companies to move across the border to be able to pay lower wages. NAFTA was greatly supported by President Clinton and President Bush. They believed that it would create many jobs for the United States. The United States has currently completed free trade agreements with over twenty countries. These deals are believed to contribute to the job loss and wages never increasing. (McBride and

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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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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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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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138 Words | 1 Pages

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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The signing of the NAFTA agreement led to a high migration of Mexicans into the United States. Although there were restrictions in the migration process, a lot more people found their way into the US as compared to the time when NAFTA had not been ratified. This move seemed to benefit only the United States. There was a kind of exploitation of the poor Mexicans who went to seek employment opportunities in the American soil. Companies would hire the Mexicans in the lowly placed jobs and underpay them.

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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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1632 Words | 7 Pages

That study also found, however, that when excluding the provisions that reduce policy uncertainty, the effect on U.S. GDP is actually -0.12 percent.” (Staff et al., 2020). Showing that though there is a similarity between trade deals the effect on Gross Domestic Product would

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674 Words | 3 Pages

The question “Is NAFTA good for the U.S.?” can be answered both ways. Yes, the NAFTA is good for the United States, because it allows for trade to be made between Mexico and Canada. Another, is the United States may be limited to specific foods, that cannot be harvest during the winter season. However, Mexico may be able to supply the United States with these specific foods due to the warmer climate.

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But where the differences begin is with the tariffs – “We can’t get lost in an old debate about traditional tariffs,” (Mauldin) the Mexican Economy Minster said. The trade minister when NAFTA was originally negotiated, Jaime Serra, also disagrees and believes export quotas should be off the table. It is clear that import tariffs will spur a great deal of debate when NAFTA is renegotiated in 2017. As the article notes, the U.S. president does have the right to levy emergency tariffs, as given by congress.

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491 Words | 2 Pages

The impact on U.S. wages was to be expected. The majority of workers who lost their jobs lost a permanent source of income in the process. It also gave employers the ability to force workers to accept lower wages. As soon as NAFTA was put into effect, U.S. employers began to tell workers that the company will move to Mexico unless they lowered the cost of their wages. These same threats were used against labor unions.

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Globalization brought many multinational corporations to trade in different countries. That is believe to boost economy and benefit everyone. But the problem is that companies only look at their own profit, they cared more about maximize profit rather development. No health protection and labor rights were guaranteed to maquiladora workers and they were exploited. When globalization made Mexican farmers to flee to the U.S, the life of Mexican women was extremely difficult.

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But the free trade also hurt individuals. The manufacturing industry employment rate was decreased because of companies moving to Mexico for cheaper labor (Bathgate). Although Mexico’s trade with the U.S. and Canada has increased, they have not experience a lift in the economy, and there is still widespread poverty. Mexican trade with Canada and the U.S. has increased since the beginning of NAFTA, (Villarreal) prompting that the economy would increase. On the contrary, Mexican economy is still struggling.

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795 Words | 4 Pages

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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The global economy is so interdependent that a trade war could hurt millions of workers. Protectionism is not the answer, but it is certainly a tempting approach to see fast results. Decades of work toward trade liberalization should not be ruined by a major member that follows this short-sighted

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