The document analyzes the impact of the North American Free Trade Agreement (NAFTA) on the textile and apparel (T&A) industry in the US. NAFTA aimed to eliminate trade barriers between the US, Canada, and Mexico to increase economic growth and jobs. While NAFTA benefited consumers through increased trade and variety of affordable goods, it had mixed results for the T&A industry. It contributed to job losses in US apparel manufacturing but increased exports of US yarn and integration of NAFTA country firms. Overall, NAFTA opened new markets for T&A trade but also increased competition from Mexico and other lower-cost countries.

1. Impact of NAFTA on
U.S. T&A Industry
FCS 555
Dr. Cho
December 8th 2015
By: Sonia Bakhshian, Hang Cui, Cayla Fitch, & Africa Martinez

2. Introduction:
Motivation of NAFTA
● U.S., Canada, and Mexico had mutual
interests for TRADE agreement:
○ Increase Economic growth
○ Create jobs for labor industry &
migration to U.S. to decrease
○ Duty FREE & Quota Elimination
● Creation of New Laws in each
country
NAFTA Goals
● Protect U.S. self interest against
formation of trading blocks
○ ex: Does not allow MX to
export avocados to U.S.
across border to prevent
export to Japan, using U.S.
ports.

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ADVANTAGES
DISADVANTAGES

10. NAFTA: History
NAFTA( north American Free Trade Agreement) :
An agreement b/w U.S.A , Canada and Mexico ,creating trilateral rule-based trade bloc in North
America.
Establishment date: January 1st ,1994
Memberships: U.S.A. , Canada , Mexico
Administration center : Washington D.C (U.S.A) , Ottawa ( Canada) ,
Mexico city( Mexico)
languages: English, French, Spanish

11. NAFTA: ROLE OF ORGANIZATION
Goal :
1. To eliminate barriers to trade and investment between the U.S., Canada and Mexico
2. Immediate elimination of tariffs on more than one-half of Mexico's exports to the U.S. and more than
one-third of U.S. exports to Mexico
Which areas are affected?
1. Intellectual properties
2. Environment
3. Agriculture
4. Textile and Apparel

12. Major Changes on Member Countries:
U.S.A
1.Many American small businesses depend on exporting their products to Canada or Mexico under NAFTA., this trade
support over 140,000 small and medium-sized businesses in the US.
2.NAFTA has increased U.S. agricultural exports to Mexico and Canada
3.with increasing U.S. trade in goods and services with Canada and Mexico from $337 billion in 1993 to $1.2 trillion in 2011
4.The foreign direct investment of Canada and Mexico in the United States (stock) was $237.2 billion in 2009 (the latest
data available), up 16.5% from 2008
Mexico
1.production of corn in Mexico has increased sich NAFTA implementation
2.Maquiladoras (Mexican assembly plants that take in imported components and produce goods for export) have become
the landmark of trade in Mexico.

13. Major Changes on Member Countries:
Mexico's agricultural exports increased 9.4 percent annually between 1994 and 2001
Canada:
1.Many feared declines failed to materialize, and some industries, like the furniture industry, were expected to suffer but
grew instead
2.Canadian manufacturing employment held steady despite an international downward trend in developed countries
3.One of NAFTA's biggest economic effects on U.S.-Canada trade has been to boost bilateral agricultural flows.

14. Impact on Neighboring Countries
Free Trade Agreement came into being when the world began to shift and
introduce various regional trading blocks. It was a revolutionary move to integrate
the Canadian, Mexican, and U.S economies, with respect.
The U.S deemed it necessary to add Mexico. Lower-Skilled wages circulated
through Mexico causing Mexico to have an advantage due to the low cost of labor.
U.S saw NAFTA as a vital aspect of national security that would enable the U.S to:
● Compete against its competitors
● Provide jobs for the people of mexico
● Enable the US to enjoy an organized economy

15. NAFTA & the Dominican Republic
● Trade among the NAFTA countries has doubled from $288 billion to
$701billion. NAFTA is serving the Dominican Republic as an incentive for the
reformation of their economy, while also increasing trade and expenditures
with the U.S
● NAFTA’s association with the Dominican republic is more like a strategic
move.
● CAFTA does not offer efficient mobility for workers and removes the barriers
helping the flow of U.S capital goods and services.
● Provides access to the U.S market helping the DR have economic gain.
● Low production cost, corporate taxes, workplace health, and safety causes
the US to gravitate to the DR.

16. Is NAFTA helping Maquiladoras?
● The intent of NAFTA was to bring together the maquiladoras and the
domestic economy of Mexico while allowing the international trade field with
Canada and the U.S to serve as an outlet. The maquiladoras are an important
source of employment and superior generator for foreign exchange in
Mexico.
● NAFTA Article 303- Elimination of duty-free imports into Mexico from
countries that meet NAFTA regulations.
● Maquiladoras expressed their concerns regarding the Article 303 and the govt
proposed a new program which enabled certain industries to apply for
reduced tariffs.

17. Impact of NAFTA on T&A Industry
Consequences:
● Loss of apparel manuf. in
the U.S.
● Uneven Short Term Trade
Balances with member
Countries
● Economies become more
competitive as they grow
● Competition w/Asian
Countries
● Skill labor is not shared
Benefits?
● Globalization
○ Internationalization
● Large Corp. Exports to
U.S.
○ -Integrated Firms
● Eliminated Trade barriers
● Emerging Countries
○ -Mexico & South America
○ Labor jobs availability
○ Opens border for trade

18. Trade Reforms
● NAFTA allows countries to conduct nearly $1.9 billion in trilateral trade daily
● > $17.0 Trillion of bilateral trade amongst NAFTA trade per year
● Improvements on NAFTA law implementations amongst nations
● Value of Mexican Cotton textile has increased because of NAFTA
● Increased Apparel Export from Mexico to U.S.
● U.S. increased export of Yarn to Mexico
● Immigration Reform is inevitable

19. Results/Outcome
● NAFTA has ignored domestic fear of impact & emphasized on long term
effects of efficiency, productivity and consumer product variety
● American consumers have access to a wider variety of more affordable
goods
● According to a study by trade economist Susan Hester, Ph.D, 70 percent of
the value of imported garments is directly attributed to U.S. workers. When
you buy a foreign-made dress or pair of shoes, you’re supporting U.S. jobs
because the contributions of U.S. workers are built into the final product.
● Americans in retail, logistics, design, R&D, marketing, product safety, and
quality control benefit from NAFTA

20. Conclusion: Current Climate of NAFTA

21. https://www.wewear.org/politicaltrends/

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