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Trade bloc

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  • 1. Trade Bloc Group No :- 3 Nitin Kirnapure Vivek Sethia Nishit Dholakia
  • 2. Trade bloc
    • An agreement between states, regions, or countries, to reduce barriers to trade between the participating regions.
    • OR
    • A set of countries which engage in international trade together, and are usually related through a free trade agreement or other association
  • 3.
    • In 1988 Canada-United States Free Trade Agreement
    • In 1994 NAFTA came into existence
  • 4. 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.
  • 5. Objective
    • 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.
  • 6. Objective Cont….
    • 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.
  • 7. NAFTA Pros
    • Goods/Services at lower cost
    • Tariffs reduced
    • Jobs created
    • Canadian economy is growing faster than US and Mexico.
  • 8. Impact of NAFTA on…
    • Trade
    • Industry
    • Agriculture
    • Environment
    • Immigration
  • 9.
    • Trade
    • Economy is growing
    • Export is growing with higher rate
    • Huge trade surplus
    • Increase in FDI and FII
  • 10. Impact on Canada
    • Agriculture
    • 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)
  • 11.
    • Environment
    • Negative impact on Environment
    • Dispute on Water
    • Industry
    • Mixed Impact on Industry
  • 12. Mexico
    • 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
  • 13.  
  • 14. 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
  • 15. Trade after NAFTA: Mexico
  • 16.  
  • 17.  
  • 18. Source :_ http://www.census.gov
  • 19. 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.
  • 20. 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.
  • 21. 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.
  • 22. CONCLUSION
    • 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.
  • 23. Bibliography
    • www.nafta-sec-alena.org/
    • www.ustr.gov/
    • en.wikipedia.org/
    • http://www.census.gov
  • 24.