This document discusses several major free trade agreements including NAFTA between the US, Canada and Mexico; MERCOSUR between South American nations; and CAFTA between the US and Central American countries. It also lists several bilateral free trade agreements. The benefits of free trade agreements are described as opening markets, treating international companies the same as domestic firms, gradually lowering tariffs and attracting more foreign direct investment. The consequences discussed are Mexico initially experiencing an economic shock and financial crisis from NAFTA but it eventually benefited Mexico, and NAFTA led to more manufacturing moving from the US to Mexico, especially in the automotive and garment industries.

1. Review one
Question one

2. American
free-trade
agreements
Andean Community:
Bolivia, Ecuador, and
Peru
NAFTA:
US, Canada, Mexico
MERCOSUR:
Brazil, Argentina,
Paraguay, Uruguay
(Bolivia, Chile)
CAFTA:
(Nicaragua,
Guatemala, Costa
Rica, Honduras, El
Salvador, Dominican
Republic, United
States

3. Bilateral free
trade
agreements
FTA – C (in Columbia called TLC)
FTP - Pa (US/Panama)
FTA – Pe (USA/Peru)
Chilean bilateral agreements
Colombia Canada bilateral agreement

4. Benefits of
free trade
agreements
Open market access
National treatment of companies (laws view
international companies as national ones)
Gradually lowering of tariffs
Ability to secure more FDI

5. Consequences
of trade
agreements
• originally led to large shock in the Mexican economy and
financial crisis eventually was beneficial for Mexico.
• Gradually led to the moving of many manufacturers from the
United States to Mexico, especially in cars and garment industry
NAFTA:
• increasing amounts of goods and services available;
• increasing number of American cars, especially large cars, in
Columbia;
• Increasing foreign direct investment from the United States to
Colombia
TLC:
• Dramatic increase in manufactured goods coming from Mexico
to Columbia including cars
• Dramatic increase in Columbia textiles and apparel moving to
Mexico (studio F), huge increase in financial services and foods
going to Mexico (Grupo Antioqueno)
Columbia Mexico