...Why did the US, Mexico, and Canada sign the North American Free Trade Agreement? Which sectors would you expect to gain most from this agreement? NAFTA allowed for the free flow of goods and services between the three parties, US, Mexico and Canada by immediate or phased elimination of tariffs on numerous goods. This free trade would in turn lead to comparative advantage i.e. each country could specialize in producing goods/ services in which they are relatively more productive than their trading partners, increasing overall productivity and output. Hence, the parties to NAFTA signed the agreement so that companies can leverage aggregating and arbitration opportunities within the region leading to overall more trade, more jobs and higher GDP. On the side, the countries also hoped for some other interrelated non-economic benefits such as reduction in illegal immigrants from Mexico to US due to availability of more earning opportunities within Mexico. The sectors which were expected to gain most from this agreement were- automobiles (in Canada), textile and apparel (in Mexico), agriculture (in all countries, particularly US), financial and banking services (in US) and energy (especially in US and Canada). 2.!Has NAFTA been beneficial for the countries that signed it? There were numerous positive economic developments after the signing of NAFTA such as: •! Increase in international trade: Mexico’s trade as a % of GDP almost doubled after the NAFTA agreement, new...
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...the nature of NAFTA and its effect on regional integration as well as state economies from several perspectives. In 1993, the United States, Canada and Mexico signed the North American Free Trade Agreement to achieve the higher level of regional integration. This NAFTA not only concerns the removal of trade barriers, but also aims to promote the movement of capital. Firstly, this essay will explain the evolution of NAFTA and its successful influence on economic integration. Furthermore, this chapter will provide the criticism on the influence of NAFTA. Secondly, this study will discuss the impact of NAFTA on regional integration, particularly economic integration. Then, this essay will propose the understandings on the effect of NAFTA on members’ economies and businesses from four perspectives, including trade, economic growth, employment and FDI. Main body The Evolution of NAFTA The North American Free Trade Agreement (NAFTA) issued in 1993 aims to removal trade barriers and liberalise economics and business among the United States, Canada and Mexico. Compared with similar FTA economic relationship, such as EU, NAFTA is described as the most implemented FTA (Orme, 1996). Like most FTAs, NAFTA not only effectively coordinates resource and improves competitiveness of countries and corporates, but also promotes the movement of products, services and investment, even financial integration. For instance, Krugman & Hanson (1993) stress that the implementation of NAFTA can facilitate...
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...Throughout the coarse of time, NAFTA had resulted in a variety of both, benefits and costs to Canada, Mexico, and the United States. NAFTA, also known as the North American Free Trade Agreement, is an agreement among the United States, Canada and Mexico designed to remove tariff barriers between the three countries. This 1994 agreement had resulted in benefits to the countries such as: increased wages, reduction of tariffs, and more trade. Regardless of NAFTAs benefits, it also has several negative impacts such as: excessive pollution and little changes to limit trade. Both, these benefits and costs have impacted the everyones lives within Canada, Mexico, and the United States after 1994, when the agreement was established. After NAFTA was...
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...Abstract This paper examines the impact of NAFTA on trade as well as migration flows between Mexico, Canada, and the United States in the textile industry. Several questions are being investigated: Why did many textile jobs apparently migrate out of the United States in the years after the establishment of NAFTA? Who gained and lost from the process of readjustment in the textile industry after NAFTA? The act whether to protect or not to protect the textile industry when a free trade agreements? The findings show that the migration of many textile jobs out, mostly Mexico was mainly due to a cheaper and enhanced plants included with a flood of cheap labour compared to the United States. Certain quarters like the people of Mexico, people of the United States, apparel companies, and etc both benefits and lost at the same time. The impact on long-term trends were noticeable, while the short-run impact is more difficult to assess due to competing factors such as changes in business cycle patterns, immigration laws, economical climate, weather conditions, and exchange rate movements. Finally, there is the idea that protecting the textile industry from painful free trade agreement is not a perfect solution, bringing a solid and positive outcome to many with only a little much to sacrifice for the betterment of the countries’ wealth and dependency. Introduction The first major international trade agreement in the world was the General Agreement on Tariffs and Trade (GATT) formed in...
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...1. The topic of NAFTA that we brought up in class and how it has a variety of impacts on both America and Mexico. NAFTA removes the trade barriers between the U.S., Mexico, and Canada. I will be looking specifically at the impacts that the removal of these barriers has had socially and economically, especially on American manufacturing and agriculture. 2. Government Censorship: Censorship is speech or other public communication that may be harmful, sensitive, or inconvenient. It is usually done by governments and private organizations or individuals who engage in self-censorship. My paper will show what, how, and why the government has so many different types of censorship in our society to regulate the citizens. 3. Capital Punishment: Capital punishment is a legal process where a person is put to death, as a state punishment for a crime. Capital Punishment has an extremly long history and a bunch of reasons why this was considered to be a legal process. My paper will discuss how this punishment is enforced? Why it should be enforced, and how it should be up to a government? 1. The topic of NAFTA that we brought up in class and how it has a variety of impacts on both America and Mexico. NAFTA removes the trade barriers between the U.S., Mexico, and Canada. I will be looking specifically at the impacts that the removal of these barriers has had socially and economically, especially on American manufacturing and agriculture. 2. Government Censorship: Censorship...
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...In analyzing the free trade market there have been several agreements that have been put in place to ensure that there is fair trading among countries. This is necessary in order to ensure that there is a balance between the supply and demand in all markets. It would not be fair for the countries that are powerful on an economic and political level to dominate the market, which would impact the countries that poorer than others. There is constant talks and meetings about free trade agreements in several markets and free trade zone. Most countries are tying to facilitate free trade on a international level, which is never a easy task because there are so many facets of the agreements that have to be addressed. There are many theories that exist that make the thought process simple of implementing free trade agreements but when you think about the principles and how it will affect society, the environment and multiple societies around the world. By encouraging free trade this is the first step towards positive development for all countries. Since the FTA was put in placed there has been a balance, which has curved unethical and illegal practices. It is very important to foster the right relationship between countries, to ensure not only economic growth and national security among foreign countries and trading. Free trade areas (FTA) are agreements where two or more countries eliminate trade barriers and tariffs between goods traded amongst the countries. Started after the end...
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...Faculty of Management Studies (MSU) Assignment on NAFTA (Subject : International Marketing) 1 Assignment on NAFTA Sub: International Marketing Submitted by: Submitted to: Rajesh Madnani Roll No. 9 5th Semester MBA – Evening (XVIIIth Batch) Mr. Seshan Iyer FACULTY OF MANAGEMENT STUDIES THE M.S.UNIVERSITY OF BARODA Submitted by Rajesh Madnani (Roll No.9) Submitted to Mr. Seshan Iyer Faculty of Management Studies (MSU) Assignment on NAFTA (Subject : International Marketing) 2 What is NAFTA North American Free Trade Agreement (NAFTA) is an agreement made between the governments of Mexico, Canada and the United States for the purpose of eliminating trade barriers among them. Important Documents: - North American Free Trade Agreement (with preamble, 22 chapters, 7 annexes, and articles) -procedural forms NAFTA has two supplements: the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC). Following diplomatic negotiations dating back to 1990 among the three nations, U.S. President George H. W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas, each responsible for spearheading and promoting the agreement, ceremonially signed the agreement in their respective capitals on December 17, 1992.[5] The signed agreement then needed to be ratified by each nation's legislative or parliamentary branch. The agreement was then given to each country’s legislative in order to make changes...
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...The Northern America Free Trade Agreement or otherwise known as NAFTA is a trade agreement between the United States, Canada and Mexico implemented in the early 1990s. The goal of NAFTA was to eliminate tariff barriers between the three Northern American countries in hopes to promote free trade and a stimulation in economic growth. Based on the economy of each country before and after NAFTA, it is fair to conclude that NAFTA was an overall successful because of the changes economically and socially to each country. Opposition to NAFTA during the early 1990s when its approval was in debate, voiced many concerns on how NAFTA would ultimately create problems economically, socially, and environmentally. Before NAFTA the United States was closely...
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...after the inception of the North American Free Trade Agreement (NAFTA), ratified in 1994 (Kubasek, Brennan, & Browne, 2015). Many prominent economists and U.S. government officials convinced the American people to support NAFTA by predicting an abundance of growing trade surpluses with Mexico, and the creation of hundreds of thousands of jobs. Now, twenty years later, Americans view NAFTA as a symbol of job loss, and huge lingering trade deficits. Many proponents are touting this agreement between the United States, Mexico, and Canada as having resounding success. However, a significant number of NAFTA opponents interpret the results as being devastating to the U.S. economy. It is important for American citizens to understand the overall effects of this pact creating the world’s largest free trade area after its initiation twenty years ago. North American Free Trade Agreement and American Job Loss The goal of NAFTA is to eliminate trade barriers between the U.S., Canada, and, Mexico (Kubasek et al., 2015). Since the implementation of NAFTA in 1994 (Kubasek et al., 2015), these roadblocks have been either immediately removed or were eliminated over longer periods, ranging from five to fifteen years (International Economics). The volume of trade between the three countries has soared to $1.2 trillion as of 2012 (Office of the United States Trade Representative, USTR 2014). Nevertheless, the impact of NAFTA has been both positive and negative resulting in a deep chasm...
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...Introduction The North American Free Trade Agreement, also referred to as NAFTA, was implemented on January 1, 1994. The free trade agreement, signed by Canada, Mexico and the United States, allows for trilateral trade (Export.gov). The agreement permits for the removal of trade barriers and tariffs, which paves the way for easier trading throughout the North American countries. The agreement calls “for the gradual elimination…of most remaining barriers to cross-border investment and to the movement of goods and services among [the United States, Canada and Mexico]” (CBP.gov). The implementation of NAFTA was preceded by CAFTA, which was a similar agreement solely between Canada and then United States (“Scott, Robert E.). Signed by President Bill Clinton, NAFTA had a goal to “[sweep] away export tariffs in several industries: agriculture [being] a main focus, [as well as] tariffs [being] reduced on items like textiles and automobiles” (Teslik, Lee Hudson). The primary goal of NAFTA is to ease restrictions on commerce between the three countries, in attempts to increase cross-border trade. The initial purposes are outlined specifically within the pages of agreement. Its original goals, along side with easing trade restrictions, include increasing investment opportunities for each country and their citizens. Each nation’s government desires to allow, for citizens of their own countries, the opportunity to invest and participate in the other North American economies. Another preliminary...
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...arrangements to attract FDI). One of the stated reasons Mexico joined NAFTA (North American Free Trade Agreement) was to increase its inflow of FDI. Using your research skills as necessary, has NAFTA resulted in increased FDI inflows into Mexico? If so, has the FDI increase yielded economic benefits to Mexico, specifically in the form of long-term growth? Justify your answer. Mexico’s joining NAFTA has resulted in increased levels of Foreign Direct Investment (FDI), with the World Bank estimating that levels of FDI in Mexico would be 40% lower had it not joined NAFTA (1.) While the amount of FDI flowing into Mexico increased, this was not accompanied by the expected boost to long-term economic growth. NAFTA aimed to benefit Mexico with by closing the US-Mexico wage gap, boosting job growth, fighting poverty, and protecting the environment. These goals, while honorable, have not been achieved to date. Despite NAFTA’s goal of reducing poverty in Mexico, the country experienced an increase in the percentage of people living in poverty and extreme poverty between 1994 and 1996. In contrast, both of these measures fell throughout the rest of Latin America in the same time period. While the trend of increasing poverty in Mexico was short lived, poverty measures continue to be a concern, and as of 2013, Mexico remains above the average poverty and extreme poverty measures for peer Latin American countries (2.). 20 years of NAFTA has moved the average Mexican household income in the...
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...geographic layout. There are many different countries that have made some type of an agreement with another country. In North America, regional integration among America, Canada, and Mexico has had both advantages and disadvantages. The NAFTA, which was first established in 1992 but did not become officially until 94, has become an important part of all three countries. Although all three countries have benefited from the NAFTA, this paper will cover the advantages and disadvantages it has had on Mexico. Advantages of the NAFTA It is safe to say that for the most part the NAFTA has been primarily a blessing for Mexico. A huge advantage for Mexico is the boost it has had on them economically. NAFTA decreased tariffs; essentially meaning that the exports and imports from Mexico increased due to the lower taxes. The NAFTA created many jobs for the people of Mexico. With the increase of jobs, came an increase in wages. The NAFTA is the largest free trade and creates more than $17 trillion in goods and services produced by these three countries. With this, Mexico has increased their economic output every year. The trade has also made it less expensive to transport the oil from Mexico into the United States, which ultimately helps both the nations. Another great attribute of the NAFTA is that the United States-Mexico industrial integration, especially in the automobile manufacturing area has increased dramatically....
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...dating back to 1986 among the three nations, the leaders met in San Antonio, Texas, on December 17, 1992, to sign NAFTA. U.S. President George H. W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas, each responsible for spearheading and promoting the agreement, ceremonially signed it. The signed agreement then needed to be authorized by each nation's legislative or parliamentary branch. Before the negotiations were finalized, Bill Clinton came into office in the U.S. and Kim Campbell in Canada, and before the agreement became law, Jean Chrétien had taken office in Canada. The proposed Canada-U.S. trade agreement had been very controversial and divisive in Canada, and the 1988 Canadian election was fought almost exclusively on that issue. In that election, more Canadians voted for anti-free trade parties (the Liberals and the New Democrats) but the split caused more seats in parliament to be won by the pro-free trade Progressive Conservatives (PCs). Mulroney and the PCs had a parliamentary majority and were easily able to pass the 1987 Canada-US FTA and NAFTA bills. However, he was replaced as Conservative leader and prime minister by Kim Campbell. Campbell led the PC party into the 1993 election where they were decimated by the Liberal Party under Jean Chrétien, who had campaigned on a promise to renegotiate or abrogate NAFTA; however, Chrétien subsequently negotiated two supplemental agreements with the new US president. In the US, Bush...
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...20 years of NAFTA – trends in trade and the economic effects «20 years of NAFTA – trends in trade and the economic effects» by Paweł Kowalik Source: Economics of the 21st Century (Ekonomia XXI Wieku), issue: 4 (4) / 2014, pages: 4663, on www.ceeol.com. The following ad supports maintaining our C.E.E.O.L. service Access via CEEOL NL Germany EKONOMIA XXI WIEKU ECONOMICS OF THE 21ST CENTURY 4(4) • 2014 ISSN 2353-8929 Paweł Kowalik Wrocław University of Economics e-mail: pawel.kowalik@ue.wroc.pl 20 YEARS OF NAFTA – TRENDS IN TRADE AND THE ECONOMIC EFFECTS Summary: This year marks the twentieth anniversary of the largest economic grouping in history, both in terms of surface area and the generated GDP – the North American Free Trade Agreement – NAFTA. The grouping was established on 1 January 1994, with the objective of gradually doing away with the existing tariff and non-tariff barriers to trade between the United States, Canada, and Mexico. Its objectives and effects have long been under careful examination and subject to many analyses. Prognoses varied, from potentially significant benefits to anticipated losses, particularly for US economy. The paper is an attempt at presenting the twenty years of NAFTA operation, predominantly from the viewpoint of its impact on the trilateral trade exchange, unemployment, inflation, and the Gross Domestic Product (GDP) of its member states. The analyses suggest that NAFTA has proved its effectiveness...
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...In January 1994, the United States, Mexico, and Canada implemented the North American Free Trade Agreement (NAFTA), forming the largest free trade zone in the world. The goal of NAFTA is to create better trading conditions through tariff reduction, removal of investment barriers, and improvement of intellectual property protection. NAFTA continues to gradually reduce tariffs on set dates and aims to eliminate all tariffs by the year 2004. Before NAFTA was established, investing in Mexico was a difficult process. Investors needed the Mexican Government's approval and were also required to meet specific investment guidelines. These requirements necessitated investors to export a set level of goods and services, utilize domestic goods and services, and transfer technology to competitors. Under NAFTA, investors no longer need government approval to invest and are treated as domestic investors. NAFTA has also increased intellectual property rights and allowed companies to obtain patents in Mexico and Canada. In the past, companies were hesitant to export research and development intensive goods; with increased intellectual property protection, however, exports of these goods have shown a definite increase. As a result of better trading conditions, exports and imports of most other goods have increased along with the research and development intensive goods. In Mexico, the elimination of investment barriers has allowed investment to expand. Increased trading and investment has then...
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