Free trade

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Free trade

  1. 1. Free Trade in Latin America
  2. 2. How does trade work? <ul><li>Price of a product in the U.S. = $25 </li></ul><ul><li>Price of same product in Mexico = $20 </li></ul><ul><ul><li>Why??? </li></ul></ul><ul><li>Nations charge a tariff to bring the price of outside goods up </li></ul><ul><ul><li>$20 + $7 (tariff) = $27 </li></ul></ul><ul><li>Increases the costs of items - consumers pay more than necessary </li></ul><ul><li>Free Trade can solve this problem </li></ul>
  3. 3. North American Free Trade Agreement
  4. 4. N A F T A <ul><li>North American Free Trade Agreement </li></ul><ul><li>January 1, 1994 </li></ul><ul><li>Increases business opportunities in the country </li></ul><ul><li>Encourages competition among countries </li></ul><ul><li>Promotes competition in the Free Trade Area </li></ul><ul><li>Allows free movement of goods and services among countries. </li></ul>
  5. 5. Maquiladora Factories in Mexico <ul><li>Factories in Mexico </li></ul><ul><ul><li>Raw materials come in with no tax charged (tariff) </li></ul></ul><ul><ul><li>Raw materials are made into products with VERY low labor costs </li></ul></ul><ul><ul><li>Products are shipped back to the host nation to be sold in stores </li></ul></ul><ul><ul><li>The term &quot;maquiladora&quot;, refers to the practice of millers charging a &quot;maquila&quot;, or &quot;miller's portion&quot; for processing other people's grain </li></ul></ul><ul><li>Who is helped by this process? Who is hurt </li></ul><ul><li>http://www.madeinmexicoinc.com/About_Us.htm </li></ul>
  6. 7. How Does Free Trade Work? Wealthy Elite Government Multinational Corporation Who Gets Left Out? The Workers

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