Transcript NAFTA

NAFTA
effect on Mexico
PRESENTED
BY
SATOSHI SUZUKI
ARATO IWASAWA
North American Free Trade
Agreement
 Free
trade agreement signed by the
United States, Canada, and Mexico
 Effect on 1 January 1994
 Population: 370,000,000
 GDP: $6,500 billion
Goals
 To
remove all trade barriers
 To promote fair competition
 Expansion of investment
opportunity
Phasing out tariff


NAFTA are gradually phasing out tariff
In 1994, 84% of all Mexican goods exported to the US
were removed their tariff
Mexico
->US
US
->Mexico
abolition Abolition
in 1994 in 1998
84%
8%
abolition abolition
in 2003 in 2008
7%
1%
43%
38%
18%
1%
Effect on Mexico



Increase 500,000 employments in manufacturing
industry , but 1,300,000 unemployment in
agricultural industry
Mexican government estimates there has been
$3.6 billion economic loss by environmental
pollution
Increase illegal immigrants from Mexico to the
US
Reasons for unemployment in
Mexico



Import of corn from the US has been increasing
since 1994
Price of the US corn is cheaper than the price
of Mexican corn
Because of increasing corn import from the US,
price of corn in Mexico has decreased from
$220 per 1,000 kg in 1992 to $160 in 1995
Corn import in Mexico
imported corn( million kg)
7000
6000
5000
4000
import
3000
2000
1000
0
import
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2100
3054
5946
6349
2595
5277
5096
5179
5655
5337
environmental pollution by NAFTA

To compete with the US crops, Mexican farms




Shift their systems into rationalization
Overuse agricultural chemicals, such as nitrogen
and phosphorus
Nitrogen becomes a main pollutant of the
Gulf of Mexico
Mexican government estimates there has been
$3.6 billion economic loss per year by
environmental pollution
Conclusion

Benefit
GDP per person has increased from $3,000 in 1994
to $6,100 in 2002
 Rationalization of Mexican Farms


Loss
environmental pollution and $3.6 billion loss per
year
 Huge unemployment on agricultural industry
