Trade Bloc Group No :- 3 Nitin Kirnapure Vivek Sethia Nishit Dholakia
An agreement between states, regions, or countries, to reduce barriers to trade between the participating regions.
A set of countries which engage in international trade together, and are usually related through a free trade agreement or other association
In 1988 Canada-United States Free Trade Agreement
In 1994 NAFTA came into existence
NAFTA Effective as of January 1, 1994 A trade agreement between CANADA, MEXICO, and the UNITED STATES which provides for the elimination of tariffs on North American goods shipped among the three countries.
Eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories of the Parties.
Promote conditions of fair competition in the free trade area.
Increase substantially investment opportunities in the territories of the Parties.
Provide adequate and effective protection and enforcement of intellectual property rights in each Party's territory.
Create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes.
Establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement.
Goods/Services at lower cost
Canadian economy is growing faster than US and Mexico.
Impact of NAFTA on…
Economy is growing
Export is growing with higher rate
Huge trade surplus
Increase in FDI and FII
Impact on Canada
Import of agricultural prod. is increase
Canada is Big consumer of U.S. Agri. prod.
Export is also increase
Significant restrictions and tariff quotas on agricultural products (mainly sugar, dairy, and poultry products)
Negative impact on Environment
Dispute on Water
Mixed Impact on Industry
Economy of Mexico is the 11th largest in the world
more than 90% of Mexican trade is under free trade agreements (FTAs) with more than 40 countries,
GDP per capita $14,932 (2009 est GDP growth 4.8% (2009 GDP by sector agriculture : 4%, industry : 26.6%, services : 69.5% (2007 est.) Unemployment 3.7% plus considerable
Advantage of NAFTA to Mexico
Access to US and Canada market
Free Movement of Goods and Services to US.
Advantage of New Job opportunities
Legal Immigration Possible
Long Term and Short Term Capital flow into Mexico
Trade after NAFTA: Mexico
Source :_ http://www.census.gov
IMPACT ON US
Trade between the United States and its NAFTA partners has soared.
U.S. imports are very labor intensive.
U.S. exports are more technologically based.
Goods at lower cost.
U.S -Mexico trade has gone up.
IMPACT ON US
America’s farmers have benefited greatly from NAFTA.
US economy has grown significantly.
U.S. manufacturing output soared.
In the 1990s, the population of the U.S has grown.
Two agreements were added to the final NAFTA negotiations.
Regulations concerning carriers moving between Canada and the U.S. have been reduced.
BILLION OF US DOLLAR Annual Trilateral Trade, 1994–2006
By establishing a strong, certain, and transparent framework for investment, the NAFTA creates an environment of confidence and stability required to make long-term investments, as a result, investment has poured into each of the NAFTA countries since 1994 .
In 2006, foreign direct investment (FDI) by each of the NAFTA partners in the other countries reached USD 533 billion, more than triple the USD 138 billion figure registered in 1993.
There is also an consistent growth from 1994 to 2006 in the trilateral trade between the countries.
In the end, when you look at the U.S. economy as a whole, NAFTA doesn't seem to be hurting the machine.
In the last two years, 3 million jobs have been added to the work force and the unemployment rate has settled into a stable range of about 5-6% - near the hypothetical natural rate of inflation.
With NAFTA, the government has implemented it's policy that the U.S. economy is shifting away from unskilled jobs and towards those that require education and skilled.
Tariffs and nontariff barriers were eliminated immediately.
It has created and eliminated jobs, which allows countries to operate at their comparative advantage.