The Pros And Cons Of NAFTA

NAFTA, The North American Free Trade Agreement, is a treaty between Canada, Mexico and the United States making NAFTA the world’s first free trade agreement. The NAFTA agreement is 2,000 pages long, with 22 chapters. NAFTA has many important purposes. First, eliminates tariffs on imports and exports between the three countries, which increases investment opportunities. This is because, the taxes that cause foreign goods to be more expensive are eliminated. Second, NAFTA allows many business travelers very easy access throughout, Canada, Mexico, and the United States, the three countries involved in the agreement. Third, the agreement gives the MFN, most favored nation, status to all co-signers. Which means that countries have to give all parties

Trade with the United States North American neighbors has more than tripled, and is growing substantially more rapid than U.S. trade with the rest of the world. Canada and Mexico account for more than a third of the United State’s total exports. The deal has has had a positive impact on the U.S. GDP, “of less than 0.5 percent, or a total addition of up to $80 billion dollars to the U.S. economy upon full implementation, or several billion dollars of added growth per year” (Council on Foreign Relations, CFR). Also, there are many U.S. jobs that rely heavily on trade with Canada and Mexico; it’s estimated that nearly “fourteen million jobs rely on trade with Canada and Mexico, while the nearly two hundred thousand export-related jobs created annually by the pact pay 15 to 20 percent more on average than the jobs that were lost” (Council on Foreign Relations, CFR). Although some jobs are lost due to imports, other jobs are being created and consumers are benefiting significantly from the improved quality of good and decreased

The flaw in this argument is NAFTA did not take away jobs, the economy is constantly changing, most jobs were lost in the U.S due to structural unemployment. Specific jobs were replaced by technology, especially automotive jobs. The workers did not meet the requirements and thus were replaced with new technology that was proven to be more efficient. Overall, more jobs have been added in after NAFTA was put in place. The manufacturing business is a great example of this, “manufacturing in the U.S. grew by 250,000 jobs after NAFTA”(Marketplace). 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). Finally, The North American Free Trade Agreement has caused the U.S. economy to “boost” as much as “.5% each year” (The Balance). The agreement has benefited The U.S., Mexico, and Canada drastically since it was put in place