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The North American Free Trade Agreement

The North American Free Trade Agreement (NAFTA) created a trilateral trade bloc among the United States, Canada, and Mexico in 1994. It eliminated many tariffs on goods traded between the three countries and led to large increases in trade volumes. However, NAFTA also resulted in job losses for some US and Canadian workers as companies moved operations to Mexico to access cheaper labor. It has also been criticized for contributing to rising inequality and failing to substantially reduce poverty in Mexico. Overall assessments of NAFTA's economic impacts are mixed, with both benefits from increased trade and costs from dislocated workers.

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103 views

The North American Free Trade Agreement

The North American Free Trade Agreement (NAFTA) created a trilateral trade bloc among the United States, Canada, and Mexico in 1994. It eliminated many tariffs on goods traded between the three countries and led to large increases in trade volumes. However, NAFTA also resulted in job losses for some US and Canadian workers as companies moved operations to Mexico to access cheaper labor. It has also been criticized for contributing to rising inequality and failing to substantially reduce poverty in Mexico. Overall assessments of NAFTA's economic impacts are mixed, with both benefits from increased trade and costs from dislocated workers.

Uploaded by

ajinnk
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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THE NORTH AMERICAN FREE TRADE

AGREEMENT
Group Members
• Akshay Manakapure (86721)
• Hari Dhuri (86709)
• Ajinkya Modak (86723)
• Prathamesh Patil (86727)
WHAT IS NAFTA?
 The North American Free Trade Agreement (NAFTA ) is a
trilateral trade bloc in North America created by the
governments of the United States, Canada, and Mexico.

 The agreements were signed in December 1993 by the


presidents of the three countries and it came into effect from
1st Jan. 1994.
HIGHLIGHTS
 Final provisions (NAFTA) were fully implemented
on January 1, 2008.

 NAFTA one of the most successful trade agreements


in history and has contributed to significant increases
in agricultural trade and investment.

 Most comprehensive Regional Trade Agreement


signed by the United States.
TRADE AND INVESTMENT
EFFECTS
 NAFTA is a broad agreement.

 From 1994 to 2008, U.S. exports to Mexico rose


91%, compared to 41% to the world. U.S. imports
increased by 179%, compared to 89% from the world.

 After fourteen years, most tariffs have gone to zero,


except for some very sensitive (mostly agricultural)
goods that have limited protection for up to 15 years.
NAFTA SUPPLEMENTS

 The North American Agreement on


Environmental Cooperation (NAAEC)

 The North American Agreement on Labour


Cooperation (NAALC)
NAFTA IN PERSPECTIVE

 U.S. two-way trade with Canada and Mexico exceeds


U.S. trade with the European Union and Japan
combined.

 In fact, US trades more with Maxico in a month than


trade with other countries in a year. US exports more
to Mexico in a day than with Paraguay in a year.

 US exports more in a week with Canada than with


Central America in a year.
U.S. TRADE IN PERSPECTIVE
2008
$800

$700

$600

$500 $411.8
Billion $

EXPORTS
$400
IMPORTS
$300 $282.6

$200
$301 $196.7
$100 $129.6
$173
$35 $54
$0
NAFTA EU(25) China Japan
Top Ten Countries with which
the U.S. Trades
$600
$244.50
$500

$400 $174.40
Billon $

EXPORTS
$300
IMPORTS
$200 $316
$217
$100

$0
a y . a e a
a co n an an .K re an c si
ad xi hi a p U o iw an y
an M
e C J e rm .K Ta F r a la
C G S M
EFFECTS OF NAFTA

BENEFITS.

LIMITATIONS.
BENEFITS
 NAFTA eliminates trade barriers.

 Benefits the importers by reduced or duty free goods.

 No MPF from Canada for NAFTA goods.

 Can make the exporter more competitive then other non-participating


countries.

 200% increase in trade among the 3 countries.

 Increase market access within each country.


U.S. – NAFTA TOTAL TRADE
1994-2008
Billion $
$713
$800 $627
$657 $612
$602
$700
$562
$600 $503
$477
$421
$500 $381
$343
$400 $293
$241 $265
$234
$300
$200
$100
$0
1994 1995 1996 1197 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
LIMITATONS
 It has negative impacts on farmers in Mexico who saw food
prices fall based on cheap imports from U.S. agribusiness.

 It has negative impacts on U.S. workers in manufacturing and


assembly industries who lost their jobs.

 Critics also argue that NAFTA has contributed to the rising


levels of inequality in both the U.S. and Mexico.

 Some economists believe that NAFTA has not been enough


(or worked fast enough) to produce an economic
convergence, nor to substantially reduce poverty rates.
KEY NAFTA PROVISIONS

 Sanitary and Phytosanitary Measures

 Export Subsidies

 Internal Support

 Grade and Quality Standards

 Rules of Origin
NAFTA COMPLIANCE TEAM

 THREE PERSONs’ TEAM DEDICATED TO RESOLVING


NAFTA MARKET ACCESS AND COMPLIANCE CASES.

 THE TEAM COMBINES EXPERIENCE IN


UNDERSTANDING NAFTA REGULATIONS WITH
SPECIFIC COUNTRY EXPERTISE

 TRY TO RESOLVE PROBLEMS BY PERSUADING


FOREIGN COUNTRY TO COME INTO COMPLIANCE
VOLUNTARILY, AVOIDING TIME AND EFFORT
INVOLVED IN FORMAL DISPUTE SETTLEMENT
PUBLIC OPINION

 Public opinion towards NAFTA in the United States,


Canada, and Mexico is mixed.

 The Program on International Policy Attitudes reported in a


poll that 47 percent of Americans thought that NAFTA has
been good for the United States, while 39 percent thought it
had been bad for the country
Impact on Jobs
 The studies indicate that the reduction in net exports to
Mexico has eliminated 227,663 U.S. job opportunities, in
Canada it has eliminated 167,172 jobs in the same period.

 NAFTA resulted in a net loss of 394,835 jobs in its first three


years.

 The analysis has found that NAFTA has eliminated significant


numbers of jobs for women and members of minority groups,
as well as white males.
RECENT NAFTA NEWS

NAFTA Toll Highway Destroying Prime Agricultural Land

The Trans-Texas Corridor (TTC) is no ordinary highway.


The toll road would be four football fields wide. It includes
separate lanes (up to six for automobiles, four for large
trucks), plus tracks for freight trains, separate tracks for high-
speed and commuter rail, also space for oil and gas pipelines,
electricity wires, and broadband transmission cables.
The implications of this scheme are staggering. Some
experts say that up to a million people in Texas stand to lose
their homes and 584,000 acres of rich farm and ranchland are
to be destroyed, all for a privately funded highway.
CONCLUSION
NAFTA is one of the most successful treaties
of the times in terms of growth in trade i.e. imports &
exports , G.D.P etc. but on the other hand it is also
responsible for causalities like loss of jobs, migration,
rising level of inequality and many others.
Thus it is important that the treaty should be
carried forward concerning about taking steps for the
problems originated due to NAFTA ,otherwise it will
create inequality in many terms which can lead to bad
conditions in future for all the three countries.

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