Submitted by

Amitrajeet Kumar
1804305002
MBA (ITLM)

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 U.S

MEXICO CANADA

NAFTA

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 INTRODUCTION
 NAFTA entered into forced on January 1, 1994.

 The final provisions were fully implemented on January 1, 2008.

 NAFTA created the world largest free trade area which now Links 450 million people producing 17 trillion worth of goods and
services.

 “ trade between the United States and its NAFTA partners has soared since the agreement entered into force.”

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 NAFTA
 The North American Free Trade Agreement (NAFTA) is a trilateral trade bloc in North America created by the governments of
the united states, Canada, and Mexico.

 The agreements were signed in December 1993 by the presidents of the three countries and it came into effect from 1 st Jan.
1994.

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 NAFTA’S MAIN OBJECTIVE
 Eliminate barriers to trade in, & facilitate the cross – border movement of goods & services between the territories of the
parties;

 Promote conditions of fair competition in the free trade area;

 To create new business opportunity

 To reduce the price of the product and service

 To develop industries in Mexico

 To grant signatory most favoured nation status

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 ADVANTAGES OF NAFTA
 In 2007, Canada & Mexico were, respectively, the first & second largest export markets for U.S agricultural products.

 Exports to the two markets combined were greater than exports to the next six largest markets combined.

 Agricultural trade increased in both directions ( US – Mexico ) under NAFTA from $ 7.3 billion in 1994to $20.1 billion in 2006.

 This was an opportunity approximately 300% increase in economic activity : or 25% year over year growth (12 years).

 From 1992 – 2007, the value of U.S agricultural exports worldwide climbed 65%.

 Over That same period, U.S farm & food exports to Mexico & Canada grew by 156%.

 NAFTA expanded the maquiladora program, which enabled U.S owned companies to employ Mexican Workers near the
border.

 This allowed for more efficient assembly of manufactured goods & in turn, increased exports to the US.

 This increased Mexico’s labor force by 30%

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 DISADVANTAGES OF NAFTA
 Some economists argue that NAFTA has been beneficial to business owners & elites in all three countries, but has had
negative impacts on farmers in Mexico who saw food prices fall based on cheap imports from U.S. agribusiness & negative
impacts on U.S. workers in manufacturing & assembly industries who lost jobs.

 Other economists believe that NAFTA has not been sufficient to produce economic convergence , nor to substantially reduce
poverty rates.

 In addition, some have suggested that in order to fully benefit from the agreement, Mexico must invest more in education &
promote innovation in infrastructure & agriculture.

 Since labour is cheaper in Mexico, many U.S. manufacturing industries moved part of their production from high – cost states
to Mexico.

 Between 1994 & 2002, the U.S. lost approximately 1.7 million jobs while gaining only 7,94,000 for the net loss of 8,79,000
jobs.

 These industries included, but were not limited to Agri- businesses.

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 NAFTA expanded the maquiladora program, in which U.S. owned companies employed Mexican workers near the border to
cheaply assemble products for export to the U.S.

 According to the Continental Social Alliance, these workers have; “no labor rights or health protections, workdays can stretch
12 hours or more, & if you are a woman, you could be forced to take pregnancy test when applying for a job.”

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 US IMPORTS WITH NAFTA
 The NAFTA countries were the second & third largest suppliers of goods imports to the United States in 2010. (Canada $276.5
billon, & Mexico $ 229.7 billion)

 U.S. goods imports from NAFTA totalled$506.1 billion in 2010, up 25.6% ($103 billion), from 2009, & up 184% from 1994, up
235% of overall U.S. imports in 2010.

 The five largest categories in 2010 were Mineral Fuel and Oil (crude oil) ($116.2 billion), vehicles ($86.3), Electrical machinery
($61.8billion), Machinery ($51.2 billion), & precious stones (gold)($13.9).

 Us imports of agricultural products from NAFTA countries totalled$29.8 billion in 2010. Leading categories include : Fresh
vegetables ($4.6 billion), snack foods, including chocolate ($4.0 billion), fresh fruits excluding bananas) ($2.4 billion), live
animals (2.0 billion), & red meats, fresh/ chilled/ frozen ($2.0 billion)

 U.S. imports of private commercial services (i.e. excluding military & government) were$35.5 billion in 2009, down 11.2%
($4.5 billon) from 2008, but up 100% since 1994.

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 US EXPORTS WITH NAFTA
 The NAFTA countries (Canada &Mexico), were the top two purchasers of U.S. exports in 2010. (Canada $248.2 billion &
Mexico $163.3 billion).

 U.S. goods exports to NAFTA in 2010 were $4.11.5 billion, up 23.4 % (78 billion) from 2009, & 149 from 1994 (the prior to
Uruguay Round) & up 190% from 1993 (the year prior to NAFTA). U.S. exports to NAFTA accounted for 32.2% of overall U.S.
exports in 2010.

 The top categories (2- digit HS) in 2010 were: Machinery ($63.3 billion), Vehicles (parts) (56.7 billion), Electrical Machinery
($56.2 billion), Mineral Fuel & Oil ($26.7 billion), 7 plastic ($22.6 billion).

 U.S. exports of agricultural products to NAFTA countries totalled $31.4 billion in 2010. Leading categories include: red meat,
fresh/ chilled/frozen ($2.7), coarse grains ($2.2 million), fresh fruit ($1.9 billion), snack foods excluding nuts (1.8 billion), &
fresh vegetables ($1.7 billion).

 U.S. exports of private commercial services (i.e., excluding military & government to NAFTA were $63.8billion in 2009, down
7% ($4.6 billion) from 2008, but up 125% since 1994.

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 NAFTA’s Broken Promises 1994-2013
 U.S Job Loss, Not Gain

 Projections on trade balance, jobs prove wrong

 Huge new NAFTA trade deficit emerges

 Services & manufacturing export growth slows under NAFTA

 One million American jobs lost to NAFTA

 Corporate promises of job creation are broken

 Special investor privileges promote off shoring of American jobs

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 CONTRIBUTION TO NAFTA

MEMBER COUNTRY CONTRIBUTION / SUPPLY

UNITED STATES Technology, Services & data processing,
medical & space research & capital
CANADA Mineral, forest products, energy &
technological expertise
MEXICO Labors, petroleum & agricultural
products

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 CONCLUSION
 The North American Free Trade Agreement (NAFTA) revolutionized trade & investment in North America, helping to unlock
our region’s economic potential.

 It has helped to stimulate economic growth & create higher paying jobs across North America.

 It has provided North American businesses with better access to materials, technologies, investment capital, & talent available
across North America.

 It has proven that trade liberalization plays an important role in promoting transparency, economic growth & legal certainty.

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 REFERENCE

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 THANK YOU

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