Seeks to eliminate non tariff barriers.</li></ul>MECHANISM: Chapter 20 deals with dispute resolution amongst the member states.. Modeled after Ch – 18 of US Canada FTA (5 Part mechanism)<br /><ul><li>Chapter 19 on antidumping and countervailing duties
Poverty levels<br />No Change in Poverty Levels/ South has remained untouched by NAFTA<br />
Agriculture<br />Tariffs removal for agricultural produce is Exempt under NAFTA.<br /> Yr 2000 US Corn Subsidies totaled $ 10.1 bn against $ 5 Bn Mexico’s total Agri Export to US<br /><ul><li> Agriculture contributes 8 percent to Mexico’s gross domestic product (GDP) and employs about 22 percent of the labor force (about 8 million workers).
For the United States, agriculture comprises only 2 percent of GDP and employs about 2.7 percent of the labor force (a bit under 4 million workers).</li></li></ul><li>Maquiladoras Effect<br />Factories, Called Maquiladoras, are built on Mexican border and workers are hired there to make goods at much lower wages than USA<br />Min Wages – USA- $5.15/h<br /><ul><li>Mexico- $ 3.4 / Day</li></ul>( Global Compensation Watch, The NAFTA Index, 1998)<br />Most production is Assembly operation rather than independent production<br />
Companies with <br />3 Day Blinds <br />20th Century Plastics <br />Acer Peripherals <br />Bali Company, Inc. <br />Bayer Corp./Medsep <br />BMW <br />Canon Business Machines <br />Casio Manufacturing <br />Chrysler <br />Daewoo <br />Eastman Kodak/Verbatim <br />Eberhard-Faber <br />Eli Lilly Corporation <br />Ericsson <br />Fisher Price <br />Ford <br />Foster Grant Corporation <br />General Electric Company <br />JVC <br />GM <br />Hasbro <br />Hewlett Packard <br />Hitachi Home Electronics<br /><ul><li>Honda
Overall Impact<br /><ul><li>NAFTA so far has enhanced Mexico's ability to supply American manufacturing firms with low cost parts
Helped American firms get competitive. ( especially auto industry)
Not helped Mexico turn into independently productive economy.
Disappointing progress in reducing the poverty in Mexico.
Low tax base, Low education investment, High inequality, Compition with china
No “ Giant sucking sound” of jobs and investment.
Till 2004 US Mfg in last 10 yrs was up 41% as compared to 34 % in the decade preceding 1994</li></ul>Other Factors Besides NAFTA That Have Affected U.S. Trade with Mexico<br /><ul><li> A sudden decline in the value of the peso at the end of 1994 (reduced U.S. exports to Mexico and increased U.S. imports from Mexico)
Mexican recession in 1995 (lowered Mexico's demand for exports, including those of US)
The long U.S. economic expansion that lasted through most of the 1990s (which increased U.S. demand for imports from all countries)
Recessions in the US and Mexico 2000-2001 (Reduced Mexican and US demand)</li></ul>NAFTA EFFECT ON CANADA<br /><ul><li>Benefited the most. Averaged 3.3% growth rates as compared to US’s 2.7%.