TOPIC NUMBER 8 : N A F T A

Introduction :

The North American Free Trade Agreement (NAFTA) is an agreement

among the United States, Canada and Mexico.

NAFTA is essentially a tarif agreement designed to facilitate

trade.
In 1994, the North American Free Trade Agreement (NAFTA)
came into efect, creating one of the worlds largest free trade
zones and laying the foundations for strong economic growth
and rising prosperity for member countries.
On that day, the three countries became the largest free
market in the worldthe combined economies of the three
nations.

Historical Back Grounds :

The Clinton administration, which signed the law that was developed under
the George H. W. Bush administration , believed NAFTA would create
200,000 American jobs for his economy.

Members : America , Mexico and Canada .

Significance / Importance :

NAFTA increased the competitiveness of the three countries involved in the

global marketplace. That has become especially important with the launch of
the European Union and the economic growth of China and other countries.
In 2007, the EU replaced the U.S. as the world's largest economy.

NAFTA is the first time two powerful, developed economies signed a trade
agreement with an emerging market country.

Purpose / Goal / Provision :

Designed to remove tarif barriers between the three countries.

The goal of NAFTA was to eliminate barriers to trade and

investment between the U.S., Canada and Mexico. NAFTA brought the
immediate elimination of tariffs on more than one-half of Mexico's exports to
the U.S. and more than one-third of U.S. exports to Mexico.
Objectives :

One of the key provisions of NAFTA provided " national goods " status to
products imported from other NAFTA countries. No state, provincial, or local
governments could impose taxes or tariffs on those goods.

NAFTA was intended to help Mexico's economy.

To reduce barriers.
To increase cooperation for improving working conditions in North
America.
To create safe market for goods and services produced in North
America.
To establish clear and mutually advantageous trade.
To help in develop and expand world trade along with provide a
international cooperation.

Successful Events :

U.S. exports to Canada and Mexico support more than three million
American jobs.
As the U.S. two largest export markets, Canada and Mexico buy more
Made-in-America goods and services than any other countries in the
world.
NAFTA opened up the Mexican markets to U.S. companies like never
before happened in the world economic history.
The Mexican market is growing rapidly, which in turn means more jobs.

Who would support NAFTA ?

Bill Clinton was certainly a supporter of NAFTA who pushed approval through
Congress. But it was negotiated and signed by President George H.W. Bush.
Moreover, more Republicans than Democrats voted for the deal.

Mission :

NAFTA provides a free marketplace in which the United States, Mexico

and Canada can exchange goods and services and promote export
jobs.
 To preserve the benefits of free trade for all stakeholders.

Creation : NAFTA was implemented on January 1, 1994.

Charter :

NAFTA establishes procedures to resolve trade disputes.

This protects businesses from unfair practices.

All NAFTA countries must respect rules and regulations including
the copyrights.
The charter of agreement allows business easy access throughout all
three countries : US , MEXICO and CANADA.

How NAFTA Works : ?

A tariff is a federal tax on imports or exports. NAFTA required the

elimination of tariffs on half of U.S.
Because tariffs make it more expensive for consumers to purchase
foreign goods, imports tend to decline when tariffs are high, which in
turn causes a decline in the supply of the good and an increase in the
price of the good.
NAFTA is a formal agreement that establishes clear rules for
commercial activity between Canada, the United States, and Mexico.
It also ensures the proper interpretation and smooth implementation of
the Agreements provisions under the international laws.
NAFTA grants the Most Favored Nation status to all co-signers.
That means countries must give all parties equal treatment. That
includes foreign direct investment.

Benefits :

Since NAFTA came into effect, trade and investment levels in North America
have increased, bringing strong economic growth, job creation, and better
prices and selection in consumer goods. North American businesses,
consumers, families, workers, and farmers have all benefited.

Advantages Dis Advantages

Lowered Prices of products in all It can be a cause for excessive

member Countries pollution
Increased Variety Available for It can be the reason for people to
products lose jobs.
Created A Wealth Of Jobs
Greatly Increased Trade
Benefit for the FDI
Provide National Goods
It lead farmers to go out of
business in Mexico.
It affected workers and their
jobs.
It has a negative impact on the
environment.
Exploitation Of Labor

Etc.

2016 Presidential nominee Donald Trump Condemn or

Criticized This agreement As Follows

In a September 2015, Donald Trump condemned the North American Free

Trade Agreement (NAFTA), calling it "the single worst trade deal ever
approved in the history United States , going on to say that if elected
president , We will will break it.

Expert People Criticized Him ( Donald Trump ) On This Policy :

A range of trade experts have said that pulling out of NAFTA as Trump
proposed would have a range of unintended consequences for the U.S.,
including reduced access to the U.S.'s biggest export markets, a reduction in
economic growth, and increased prices for gasoline, cars, fruits, and
vegetables. The Washington Post noted that the overall effect of NAFTA on
the U.S. economy appears to have been relatively modest and very positive
sign for US economy, primarily because trade with Canada and Mexico.

Implications of NAFTA :
US export goods that are produced in the United States and then sold
in other member countries.

The united states is also import goods from the member countries and
on the other hand the imported good of U.S is very much affordable
specially for the Canada and Mexico consumers.

Criticism of NAFTA :
1. While NAFTA is seen by most as a good economic decision , there are
still those who criticize the decision.
 2. One common complaint is that NAFTA created the opportunity for
manufacturing organizations to access new markets, both as
customers and as labor.

3. Unfortunately, some US companies seeking to take advantage

of cheaper labor for the industrialization. Many Americans blame
the agreement for encouraging American manufacturers to relocate
their facilities to Mexico, where labor costs are lower and
environmental standards generally weaker.

Notable Points :

Donald Trump Also Argues Same Thing :

That makes it the worlds largest free trade agreement as measured by GDP.

Either the Trans-Pacific Partnership or the Transatlantic Trade and

Investment Partnership , so NAFTA will replace this partnership
agreement.

President Ronald Reagan kicked it off during his campaign in 1980. He

wanted to unify the North American market to compete better with
the emerging European Union.

In Past History :

President Ronald Reagan kicked it off during his campaign in 1980.

He wanted to unify the North American market to compete better with

the emerging European Union.

What are the benefits of the NAFTA for U.S. consumers ?

more free trade resulting in greater choices in goods and services

lower prices and improved quality products

stronger health and safety standards

improved economic stability in the U.S. marketplace

 a marketplace that is increasingly driven more by supply and demand
than by barriers to commerce

What is the NAFTA's impact on U.S. jobs ?

The NAFTA has created jobs for American workers by expanding

access to U.S. goods and services in the Mexican and Canadian
markets.
In addition, export-supported jobs, which are in the higher productivity,
export-oriented sectors of the economy.

What are some of the industries that are experiencing significant

benefits as a result of the NAFTA ?

Agricultural Trade :

The United States is the world's largest and most competitive exporter of
agricultural commodities. The NAFTA has reinforced the trend toward greater
integration of the North American agricultural marketplace and a more
productive and efficient American agricultural sector.

Automotive Industry :

Prior to the NAFTA, U.S. motor vehicle exports to Mexico.

With the reduction/elimination of these trade barriers, U.S. vehicle

manufacturers have become more efficient and competitive in the North
American market.

Textiles Industry :

The NAFTA has increased economic activity and enhanced export prospects
for textile and apparel producers in the United States. The NAFTA has
enabled U.S. producers to optimize production and manufacturing
investment in North America, resulting in a shift of strengthening the
industry's worldwide position.

Conclusion :

The North American Free Trade Agreement (NAFTA) will not be fully
implemented until 2008. However, it is evident that NAFTA has already
proved its worth to the United States by playing an important and vital role
in increasing consumer choice, improving market access for U.S. products,
and expanding U.S. jobs supported by exports.