Transcript nafta - LPS.org

NAFTA
By Bianca Conway and Andy
Heckman
What is NAFTA?
 NAFTA is the North American Free Trade Agreement
 On Dec. 17, 1992, President Bush, Mexican President
Salinas, and Canadian Prime Minister Mulroney
signed NAFTA
 NAFTA proposed to eliminate restrictions on the flow
of goods, services, and investments in North America
 NAFTA was signed into law by President Clinton on
December 8, 1993, and later took effect on January 1,
1994
NAFTA Objectives

For Mexico
~Secure access to the US market
~Attract new capital
~Expand exports
~Consolidate economic reforms. End to Protectionism
 For Canada
~Access to US and Mexican markets
 For the US
~Leverage in Europe and Japan
~Increase competitiveness and eliminate duties
~New issues: immigration, environment, drugs.
~Prevent Asian and Europe firms from bypassing US tariffs through Mexico
~Force Mexican producers to adopt foreign standards and foreign business
practices
NAFTA eliminates trade Barriers
 NAFTA helped to eliminate a number of non-tariff measures affecting
agricultural trade between the United States and Mexico.
 Prior to January 1, 1994, the single largest barrier to U.S. agricultural
sales was Mexico’s import licensing system.
 However, this system was largely replaced by tariff-rate quotas or
ordinary tariffs.
 All agricultural tariffs between Mexico and the United States were
eliminated as of January 1, 2008.
 Many were immediately eliminated and others were phased out over
transition periods of 5, 10, or 15 years.
Advantages
 NAFTA removed all non-tariff hurdles between the United States and
Mexico and in the process, this has allowed the U.S. agricultural
products to regain market share within Mexico.
 NAFTA has allowed the agricultural exports of the United States
farmers to Mexico to nearly double.
 In Canada NAFTA helped produce a strong
Economy which lowers taxes, debt and
helps people receive a higher ed.
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Disadvantages
 NAFTA will force jobs out of the United States to Mexico where the
cost of labor is much lower. Over 1 million jobs have been lost in the
US since the beginning of NAFTA and 20,000 of these jobs were lost
in the state of Tennessee alone.
 Environmental problems
~Employment has increased and tax benefits for operating near the
border have yet to be phased out. Environmental provisions of NAFTA
have not worked.
~Population explosion(From 11 million today to 25 million by 2020)
 Lower safety and health standards
 Uneven effect on the US Texas vs. other States
 Adjustment costs for the three partners