North American Free Trade Agreement
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North American Free Trade Agreement

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NAFTA is a trilateral trade bloc. Member countiers are USA, Canada and Mexico.

NAFTA is a trilateral trade bloc. Member countiers are USA, Canada and Mexico.

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    North American Free Trade Agreement North American Free Trade Agreement Presentation Transcript

    • NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)
      • PRESENTED BY:
      • SAKET RARA
      • JITESH BHILARE
      • MUKESH KOTHARI
      • GAURAV KUMAR
      • PANKAJ DASHMUKHE
      • MITHUN SADAVARTE
      • DEEPAK DODDAMANI
    • INTRODUCTION
      • NAFTA is an agreement signed by the governments of the United states, Canada and Mexico creating a trilateral trade bloc in North America.
      • Members: Canada, Mexico & United States
      • Official languages: English, French and Spanish
      • Secretariats: Mexico city, Ottawa, Washington D.C.
      • Establishment: 1 January 1994
      • GDP of NAFTA alliance: USD 12 trillion
      • NAFTA supplements: NAAEC & NAALC
    • BACK GROUND
      • In 1988 Canada & the United States signed the Canada-United states Free Trade Agreement
      • The American government then entered into negotiations with the Mexican government for a similar treaty
      • Canada asked to join the negotiations in order to preserve its perceived gains under the 1988 deal
      • The agreement NAFTA was signed by
      • U.S. president - George H. W. Bush,
      • Canadian prime minister - Brian Mulroney and Mexican president - Carlos Salinas
      • in San Antanio, Texas on December 17,1992 .
    • OBJECTIVES OF NAFTA
      • To eliminate trade barriers & facilitate the cross-border movements of goods and services between the parties
      • To promote conditions of fair competition
      • To substantially increase investment opportunities
      • To provide adequate and effective protection & enforcement of intellectual property rights in each territory
      • To create effective procedures for the implementation and application of this agreement ,for its joint administration & for resolution of disputes
      • To establish a framework for further trilateral, regional and multilateral co-operation to expand and enhance benefits of this agreement
    • North American Agreement on Environmental Co-operation (NAAEC )
      • NAAEC created Commission for Environmental Co-operation (CEC) in 1994
      • Development of common priorities for the protection of certain species
      • Developing North American Conservation Action Plans for three shared marine species
      • Provide tools such as map of terrestrial eco-regions which management agencies are using in this programs
      • Setting out common mechanism for planning and monitoring bird conservation programs
    • North American Agreement on Labor Co-operation (NAALC )
      • NAALC members work together to protect, enhance and enforce the basic rights of workers.
      • Establishment of institutions & creation of formal process to raise concerns related to labor law enforcement directly with government
      • Undertaken a wide range of co-operative programs and technical exchanges on industrial relations,
      • occupational safety and health,
      • child labor,
      • gender equality,
      • protection of migrant workers
      • Trade and Investment Effects
      • NAFTA is a broad agreement, but improved market access, including tariff reductions on merchandise trade, was the major U.S. goal.
      • After ten years, most tariffs have gone to zero, except for some very sensitive (mostly agricultural) goods that have limited protection for up to 15 years. Clearly, U.S.-Mexico trade and investment have grown sharply over the past decade.
      • From 1994 to 2003, U.S. exports to Mexico rose 91%, compared to 41% to the world. U.S. imports increased by 179%, compared to 89% from the world.
    • EFFECTS OF NAFTA
      • BENEFITS
      • Benefit’s the importers by reduced or duty free goods.
      • Can make the exporter more competitive then other non-participating countries
      • There has been great increase in trade among the three countries and market access within each country also increased considerably.
      • Mexico’s poverty rate decreased and real income increased, even after economic crisis 1994-1995
      • NAFTA had been beneficial to business owners and elites in all three countries
    • ADVERSE EFFECTS
      • INCREASE IN PRODUCTIVITY AND GROWTH IS NOT VERY HIGH
      • NAFTA RESULTED IN A NET LOSS OF 394,834 JOBS IN FIRST THREE YEARS ITSELF
      • MANY CANADIAN AND MEXICAN PEOPLE MIGRATED TO USA UNDER TEMPORARY STATUS (TS) & TREATY’S NATIONAL DEPENDENT STATUS (TDS)
      • YET THERE IS NO NET INCREASE IN EMPLOYMENT LEVEL
      • LIMITATIONS
      • It has negative impacts on farmers in Mexico who saw food prices fall based on cheap imports from U.S. agribusiness
      • It has negative impacts on U.S. workers in manufacturing and assembly industries who lost jobs.
      • Critics also argue that NAFTA has contributed to the rising levels of inequality in both the U.S. and Mexico.
      • Some economists believe that NAFTA has not been enough (or worked fast enough) to produce an economic convergence, nor to substantially reduce poverty rates
      • PUBLIC OPINION
      • Public opinion toward NAFTA in the United States, Canada, and Mexico is mixed. A survey conducted by CIDE and COMEXI in Mexico showed that 64 percent of the Mexican public favored NAFTA.
      • The Program on International Policy Attitudes reported in a poll that 47 percent of Americans thought that NAFTA has been good for the United States, while 39 percent thought it had been bad for the country
    • CONTRIBUTION TO NAFTA MEMBER COUNTRY CONTRIBUTION / SUPPLY UNITED STATES Technology, Services, and data processing, medical and space research and capital CANADA Mineral, forest products, energy and technological expertise MEXICO Labors, Petroleum and agricultural products
    • INDIA’S TRADE WITH NAFTA
      • INDIA’S EXPORT TO NAFTA in 2005-2006
      • Total USD 18,817.71 millions
      • INDIA’S IMPORT FROM NAFTA in 2005-2006
      • Total USD 10472.22 millions
    • INDIA’S TRADE WITH USA
      • INDIA’S MAJOR EXPORTS ITEMS
      • INDIA’S MAJOR IMPORT ITEMS
      PRECIOUS STONES DIAMONDS & GOLD JEWELLARY WOVEN APPAREL KNIT APPAREL FISH & SEAFOOD IRON/STEEL PRODUCTS ORGANIC CHEMICALS SOPHISTICATED MACHINERY ELECTRICAL MACHINERY MEDICAL & SURGICAL EQUIPMENTS AIRCARFTS, SPACE CRAFTS PLASTIC WOOD PULP METALS
    • INDIA’S TRADE WITH CANADA
      • INDIA’S MAJOR EXPORT ITEMS
      • INDIA’S MAJOR IMPORT ITEMS
      READYMADE GARMENTS GEMS,JEWELLARY & PRECIOUS STONES ENGINEERING GOODS IRON & STEEL ARTICLES COFFEE SPICES ORGANIC CHEMICALS NEWSPRINT – IN ROLLS OR SHEETS COPPER ORES AND CONCENTRATES PEAS – DRIED AND SHELLED IRON SCRAP,POTASH, COPPER WOOD PULP MINERALS INDUSTRIAL CHEMICALS
    • INDIA’S TRADE WITH MEXICO
      • INDIA’S MAJOR EXPORT ITEM
      • INDIA’S MOJOR IMPORT ITEM
      TRANSPORT EQUIPMENT DRUGS, PHARMACEUTICAL READYMADE GARMENTS INORGANIC/ORGANIC CHEMICALS MACHINERY & INSTRUMENTS ELECTRONIC GOODS DYES & INTERMEDIARIES ARTICLES OF IRON OR STEEL IRON & STEEL PLASTIC & ARTICLES THEREOF NUCLEAR REACTOR MEDICAL OR SURGICAL EQUIPMENTS ORES,SLAG AND ASH ORGANIC CHEMICALS
    • FUTURE OF NAFTA
      • Clearly not about cheap labor
      • It is about integration of the North American marketplace
      • It is about moving up the value-added chain
      • It is about maintaining and increasing competitiveness and productivity
      • Mexico, like the U.S., fears losing its manufacturing sector to other countries – why? Over the last 5 years:
        • China’s exports to the U.S. grew 300%
        • Mexico’s exports to the U.S. grew 30%
    • CONCLUSION
      • NAFTA has played an important role in the overall development of the three nations
      • - the progressive elimination of tariffs & trade barriers,
      • Dispute resolution
      • Commitment to intellectual property & environment legislation
      • Mutual entry into governmental bidding & the financial and other service sector
      • But on the other hand it is also responsible for causalities like loss of jobs, migration, rising level of inequality and many others.