The North American Free Trade Agreement

1. BY ALI ALHARBI
NORTH AMERICAN FREE TRADE AGREEMENT
NAFTA

2. OVERVIEW
WHAT IS NAFTA?
▸Exchange pack that produced into results January 1, 1994 that was planned
to bit by bit take out most duties and other exchange obstructions on items
and administrations going between the United States, Canada, and Mexico.
▸The settlement has prompt to much civil argument and challenge from all
sides, overwhelmingly Mexican agriculturists and American assembly line
laborers. Current level headed discussions about NAFTA and recessed
around the extension of NAFTA.
▸The agreement has successfully made an unhindered commerce alliance
among the three biggest nations of North America, covering a locale of almost
400 million individuals that produces over $8 trillion in merchandise and
ventures.
▸The larger part of enterprises in the United States, Canada, and Mexico have
profited from NAFTA.

3. What are the results of NAFTA?
▸U.S. government officials predicted that NAFTA - a trade agreement
aimed at liberalizing trade between member countries - would lead to
growing trade surpluses with Mexico and that hundreds of thousands of
jobs would be created.
▸NAFTA has benefits for U.S. consumers by having more free trade
resulting in greater choices in goods and services, lower prices and
improved quality products.
▸In addition, stronger heath and safety standards, improved economic
stability in the U.S marketplace, a marketplace that is increasingly
driven more by supply and demand than by barriers to commerce.

4. Distributional Effects
▸ NAFTA had only small economic effects on Canada and the U.S. but larger
effect on Mexico. they find little evidence that NAFTA affects aggregate
employment in the three countries. They also discuss the significant structural
adjustments in the NAFTA countries in specific industries - the agriculture,
autos, and textiles industries.
4

5. NAFTA ADVANTAGES
‣ NAFTA BOOSTED U.S. ECONOMIC GROWTH BY AS MUCH AS
0.5% A YEAR. THE SECTORS THAT BENEFITED THE MOST WERE
AGRICULTURE, AUTOMOBILES, AND SERVICES.
‣ NAFTA EXPORTS CREATED NEARLY 5 MILLION NEW U.S.
JOBS. MOST OF THOSE JOBS WENT TO 17 STATES, BUT ALL
STATES SAW SOME INCREASES.
‣ SINCE NAFTA WAS ENACTED, U.S. FOREIGN DIRECT
INVESTMENT (FDI) IN CANADA AND MEXICO MORE THAN
TRIPLED.
‣ NAFTA ALLOWED FIRMS IN MEMBER COUNTRIES TO BID ON ALL
GOVERNMENT CONTRACTS.

6. NAFTA DISADVANTAGES
U.S. JOBS WERE LOST
‣ SINCE LABOR IS CHEAPER IN MEXICO, MANY MANUFACTURING
INDUSTRIES MOVED PART OF THEIR PRODUCTION FROM HIGH-
COST U.S. STATES. BETWEEN 1994 AND 2010, THE U.S. TRADE
DEFICITS WITH MEXICO TOTALED $97.2 BILLION, DISPLACING
682,900 U.S. JOBS.
U.S. WAGES WERE SUPPRESSED
‣ NOT ALL COMPANIES IN THESE INDUSTRIES MOVED TO MEXICO.
THE ONES THAT USED THE THREAT OF MOVING DURING UNION
ORGANIZING DRIVES. WHEN IT BECAME A CHOICE BETWEEN
JOINING THE UNION OR LOSING THE FACTORY, WORKERS CHOSE
THE PLANT.
MEXICO'S FARMERS WERE PUT OUT OF BUSINESS
‣ MEXICO LOST 1.3 MILLION FARM JOBS.

7. Non-economic considerations
▸ New trade agreements affect how governments can regulate for health
both within health systems and in addressing health protection, promotion
and social determinants of health in other policies.
▸ The promise at NAFTA’s inception was that economic prosperity would
enable Mexico to “export goods, not people.” Yet migration from Mexico
to the United States has more than doubled since, driven by weak job
creation in Mexico and strong demand for migrant labor in the United
States, and undeterred by expanding border-control measures.
▸ NAFTA’s side agreement on labor, the rst of its kind in a trade
agreement, had the stated goal of promoting an upward convergence of
labor standards in North America.

8. Is the agreement a “good” agreement?
‣ WHICH CRITERIA ARE IMPORTANT?
LABOUR AND ENVIRONMENTAL PROVISIONS HAVE BEEN VERY
IMPORTANT IN IMPROVING THE WHOLE SCOPE OF OUR
RELATIONS WITH TRADING PARTNERS, AND HAVE RESULTED IN
AN ARRAY OF COOPERATIVE ACTIVITIES IN AREAS OF KEY
IMPORTANCE TO CANADA'S INTERNATIONAL LABOUR AND
ENVIRONMENTAL AGENDA.
‣ How should the criteria be weighed?
Enforceable provisions that promote transparency and public participation,
encourage high levels of domestic labour and environmental protection, and
obligate the Parties to effectively enforce their labour and environmental laws.
Donald Trump Says NAFTA Was the Worst Trade Deal the U.S.
Ever Signed.

9. HTTPS://WWW.THEBALANCE.COM/DISADVAN
TAGES-OF-NAFTA-3306273
HTTP://WWW.BU.EDU/PARDEE/FILES/2009/11/
PARDEE-REPORT-NAFTA.PDF
THANK YOU
SOURCES