NAFTA North American Free Trade Agreement

1st January 1994 United States, Canada & Mexico Worlds largest free trade area links 462 million people

Trade liberalization
Elimination of tariffs Economic Growth

Need for NAFTA

 Eliminate barriers to trade . Facilitate the cross-border movement of goods and services. Increase investment opportunities. Provide protection and enforcement of intellectual property rights. Procedures for the resolution of trade disputes.

NAFTA
Contributions & Benefits

Trade Surplus in Services

Export of services like financial & healthcare - to nearby countries

Stepped Up Foreign Direct Investment

Elimination of tariffs
Tariffs on all farm products . U.S. automobile manufacturers have gained greater access to Mexican market. Telecommunication industry.

Dispute resolution
Administration of NAFTA is handled by a commission composed of ministers designated by each NAFTA country

Smart Borders
To accommodate the growth in trade and commerce, Canada and the United States have signed a pact to work together to create a Smart Border Collaboration in identifying and addressing security risks Expediting the legitimate flow of people and goods across the Canada-US border.

Protection of intellectual property rights

NAFTA includes details regarding procedures for

Enforcement of intellectual property rights Damages in the event of violations of such rights

Agreement on labor
To create new employment opportunities To protect, enhance, and enforce basic workers' rights Affirming respect for each party's constitution and laws Transparency among the three countries regarding their respective labor laws and their enforcement of those laws

Mexico Agriculture
Opening competition to heavily subsidized U.S farm industry
Growth in Mexican farming industry Increase in the number of Mexican migrants

Mexican Energy Industry

Worlds sixth largest producer of crude oil
Second largest oil supplier to U.S Insignificant domestic investments

Canadian Companies

More than 10,000 Canadian companies taken over by foreigners. 98% of FDI in Canada for foreign takeovers

NAFTA Chapter 11
Chapter 11 allows corporations to sue Mexico, U.S and Canada in case of failed investment

U.S. Employment
U.S employment 110 million 137.6 million (19932008), 24% increase
U.S unemployment rate averaged 5.1 % after NAFTA vs. 7.1 % before NAFTA

Increased Trade U.S - Canada

The volume of trade has tripled since 1994 Economic growth Businesses have become more competitive Millions of jobs created

Total trilateral trade

In billions of U.S dollars U.S - Canada Trade grown by 156% ($199 bn 509 bn) Canada- Mexico Trade increased by 339% ($4.1 bn-18 bn) U.S Mexico increase by 302.6% ($85.2bn 343 bn)

CONCLUSIONS

 Strengthened trade and economic relations between the three countries

More competitive North American platform Opportunities in the global marketplace Sustaining growth against Asia and South America

Questions