Trade bloc

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Trade bloc

  1. 1. Trade Bloc Group No :- 3 Nitin Kirnapure Vivek Sethia Nishit Dholakia
  2. 2. Trade bloc <ul><li>An agreement between states, regions, or countries, to reduce barriers to trade between the participating regions. </li></ul><ul><li>OR </li></ul><ul><li>A set of countries which engage in international trade together, and are usually related through a free trade agreement or other association </li></ul>
  3. 3. <ul><li>In 1988 Canada-United States Free Trade Agreement </li></ul><ul><li>In 1994 NAFTA came into existence </li></ul>
  4. 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. 5. Objective <ul><li>Eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories of the Parties. </li></ul><ul><li>Promote conditions of fair competition in the free trade area. </li></ul><ul><li>Increase substantially investment opportunities in the territories of the Parties. </li></ul>
  6. 6. Objective Cont…. <ul><li>Provide adequate and effective protection and enforcement of intellectual property rights in each Party's territory. </li></ul><ul><li>Create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes. </li></ul><ul><li>Establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement. </li></ul>
  7. 7. NAFTA Pros <ul><li>Goods/Services at lower cost </li></ul><ul><li>Tariffs reduced </li></ul><ul><li>Jobs created </li></ul><ul><li>Canadian economy is growing faster than US and Mexico. </li></ul>
  8. 8. Impact of NAFTA on… <ul><li>Trade </li></ul><ul><li>Industry </li></ul><ul><li>Agriculture </li></ul><ul><li>Environment </li></ul><ul><li>Immigration </li></ul>
  9. 9. <ul><li>Trade </li></ul><ul><li>Economy is growing </li></ul><ul><li>Export is growing with higher rate </li></ul><ul><li>Huge trade surplus </li></ul><ul><li>Increase in FDI and FII </li></ul>
  10. 10. Impact on Canada <ul><li>Agriculture </li></ul><ul><li>Import of agricultural prod. is increase </li></ul><ul><li>Canada is Big consumer of U.S. Agri. prod. </li></ul><ul><li>Export is also increase </li></ul><ul><li>Significant restrictions and tariff quotas on agricultural products (mainly sugar, dairy, and poultry products) </li></ul>
  11. 11. <ul><li>Environment </li></ul><ul><li>Negative impact on Environment </li></ul><ul><li>Dispute on Water </li></ul><ul><li>Industry </li></ul><ul><li>Mixed Impact on Industry </li></ul>
  12. 12. Mexico <ul><li>Economy of Mexico is the 11th largest in the world </li></ul><ul><li>more than 90% of Mexican trade is under free trade agreements (FTAs) with more than 40 countries, </li></ul>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 <ul><li>Access to US and Canada market </li></ul><ul><li>Free Movement of Goods and Services to US. </li></ul><ul><li>Advantage of New Job opportunities </li></ul><ul><li>Legal Immigration Possible </li></ul><ul><li>Long Term and Short Term Capital flow into Mexico </li></ul>
  14. 15. Trade after NAFTA: Mexico
  15. 18. Source :_ http://www.census.gov
  16. 19. IMPACT ON US <ul><li>Trade between the United States and its NAFTA partners has soared. </li></ul><ul><li>U.S. imports are very labor intensive. </li></ul><ul><li>U.S. exports are more technologically based. </li></ul><ul><li>Goods at lower cost. </li></ul><ul><li>U.S -Mexico trade has gone up. </li></ul>
  17. 20. IMPACT ON US <ul><li>America’s farmers have benefited greatly from NAFTA. </li></ul><ul><li>US economy has grown significantly. </li></ul><ul><li>U.S. manufacturing output soared. </li></ul><ul><li>In the 1990s, the population of the U.S has grown. </li></ul><ul><li>Two agreements were added to the final NAFTA negotiations. </li></ul><ul><li>Regulations concerning carriers moving between Canada and the U.S. have been reduced. </li></ul>
  18. 21. BILLION OF US DOLLAR Annual Trilateral Trade, 1994–2006 <ul><li>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 . </li></ul><ul><li>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. </li></ul><ul><li>There is also an consistent growth from 1994 to 2006 in the trilateral trade between the countries. </li></ul>
  19. 22. CONCLUSION <ul><li>In the end, when you look at the U.S. economy as a whole, NAFTA doesn't seem to be hurting the machine. </li></ul><ul><li>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. </li></ul><ul><li>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. </li></ul><ul><li>Tariffs and nontariff barriers were eliminated immediately. </li></ul><ul><li>It has created and eliminated jobs, which allows countries to operate at their comparative advantage. </li></ul>
  20. 23. Bibliography <ul><li>www.nafta-sec-alena.org/ </li></ul><ul><li>www.ustr.gov/ </li></ul><ul><li>en.wikipedia.org/ </li></ul><ul><li>http://www.census.gov </li></ul>

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