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    Nafta North American Free Trade Agreement

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    Rahul Singh
    The North American Free Trade Agreement (NAFTA) was established in 1994 between the United States, Canada, and Mexico to eliminate barriers to trade and investment between the three countries. NAFTA's objectives were to eliminate tariffs and promote competition, economic growth, and fair trade. Since its implementation, NAFTA has significantly increased trade and investment between the member countries while also generating both economic opportunities and criticisms around its impact.

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    Nafta North American Free Trade Agreement

    Uploaded by

    Rahul Singh
    59 views34 pages
    The North American Free Trade Agreement (NAFTA) was established in 1994 between the United States, Canada, and Mexico to eliminate barriers to trade and investment between the three countries. NAFTA's objectives were to eliminate tariffs and promote competition, economic growth, and fair trade. Since its implementation, NAFTA has significantly increased trade and investment between the member countries while also generating both economic opportunities and criticisms around its impact.

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    The North American Free Trade Agreement (NAFTA) was established in 1994 between the United States, Canada, and Mexico to eliminate barriers to trade and investment between the three countries. NAFTA's objectives were to eliminate tariffs and promote competition, economic growth, and fair trade. Since its implementation, NAFTA has significantly increased trade and investment between the member countries while also generating both economic opportunities and criticisms around its impact.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    59 views34 pages

    Nafta North American Free Trade Agreement

    Uploaded by

    Rahul Singh
    The North American Free Trade Agreement (NAFTA) was established in 1994 between the United States, Canada, and Mexico to eliminate barriers to trade and investment between the three countries. NAFTA's objectives were to eliminate tariffs and promote competition, economic growth, and fair trade. Since its implementation, NAFTA has significantly increased trade and investment between the member countries while also generating both economic opportunities and criticisms around its impact.

    Copyright:

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    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 34

    NAFTA North American Free Trade Agreement

    January 1994 United States, Canada & Mexico Worlds largest free trade area links 444 million people

    Trade liberalization
    Elimination of tariffs Economic Growth

    Objective
    Allow free movement of goods and services among the countries. Promote competition in the free trade areas. Protect the property rights of people and businesses in each country.

    Be able to resolve problems that arise among the countries.


    Encourage cooperation among countries.

    Need for NAFTA

    Need for NAFTA Grant the signatories Most Favored Nation status Eliminate barriers to trade Facilitate the cross-border movement of goods and services Promote conditions of fair competition

    Increase investment opportunities


    Provide protection and enforcement of intellectual property rights Procedures for the resolution of trade disputes Framework for further trilateral, regional and multilateral cooperation to expand NAFTA's benefits

    NAFTA
    Contributions & Benefits

    Increased Trade
    Total goods trade between the United States and its NAFTA partners grew from $293 billion in 1993 to more than $946.1 billion in 2008 Total services trade between the U.S. and NAFTA partners grew from $44 billion in 1993 to $108 billion in 2007 Trade between the NAFTA signatories tripled, from $297 billion in 1993 to $1 trillion in 2007 Estimates are that NAFTA increases U.S. GDP by as much as .5% a year

    Total exports U.S. and Mexico

    Boosted US Farm Exports


    NAFTA increased farm exports because it eliminated high Mexican tariffs Mexico is the top export destination for beef, rice, soybean meal, corn sweeteners, apples and beans

    As a result of NAFTA, the percent of U.S. agricultural exports to Canada and Mexico has grown from 22% in 1993 to 30% in 2007
    The percent of U.S. agricultural exports to Canada and Mexico has grown from 22% in 1993 to 30% in 2007

    Reduced Oil and Grocery Prices


    The U.S. imported $157.8 billion in oil from Mexico and Canada Reduced U.S. reliance on oil imports from the Middle East and Venezuela

    Elimination of tariffs
    Tariffs on all farm products phased out Elimination of nontariff barriers by 2008. Expanded telecommunications trade.

    Reduced textile and apparel barriers.


    U.S. automobile manufacturers have gained greater access to Mexican market

    Stepped Up Foreign Direct Investment


    U.S. foreign direct investment (FDI) in Canada and Mexico more than tripled to $348.7 billion Reduced investors' risk by guaranteeing they will have the same legal rights as local investors Investors can make legal claims against the government if it nationalizes their industry or takes their property by eminent domain

    Environment
    NAFTA is more protective of the environment than any other international agreement or treaty ever before entered into by the United States Promoted communication about environmental problems among governments, citizens, and environmental groups from the three NAFTA countries Failure to enforce environmental laws and regulations results in sanctions suspension of trade benefits

    Dispute resolution
    Administration of NAFTA is handled by a commission composed of ministers designated by each NAFTA country
    A secretariat serves the commission and assists with the administration of dispute resolution panels

    Smart Borders
    To accommodate the growth in trade and commerce, Canada and the United States have signed a pact to work together to create a Smart Border Collaboration in identifying and addressing security risks Expediting the legitimate flow of people and goods across the Canada-US border.

    Generating Jobs

    Standards of living have steadily been rising The improvements in living conditions are in part due to the generation of jobs Under NAFTA businesses have become more profitable and competitive leading to job creation in Canada and the other partnered countries The increased economic activity helps generate jobs One in five Canadian jobs is at least in part related to trade

    Protection of intellectual property rights


    NAFTA builds on the work of the General Agreement on Tariffs and Trade (GATT), providing substantial protection for intellectual property NAFTA includes details regarding procedures for
    Enforcement of intellectual property rights Damages in the event of violations of such rights

    Agreement on labor
    "Labor Side Agreement," was negotiated in response to concerns that NAFTA itself did little or nothing to protect workers
    To create new employment opportunities To protect, enhance, and enforce basic workers' rights Affirming respect for each party's constitution and laws

    Transparency among the three countries regarding their respective labor laws and their enforcement of those laws

    Criticism

    U.S Employment rates


    Net manufacturing employment declined by 3,654,000 (1994-2007) U.S exports vs. imports to Mexico ($107 bn vs $136 bn) Trade deficit ($29 billion)

    Gap between rich and poor


    Increase in Mexican migrants

    Mexico Agriculture
    Opening competition to heavily subsidized U.S farm industry
    Crippled Mexican farming industry Increase in the number of Mexican migrants

    Mexican Energy Industry


    Worlds sixth largest producer of crude oil
    Second largest oil supplier to U.S Insignificant domestic investments Declining production PEMEX Mexico becoming a net oil importer

    Canadian Companies

    Mel Hurtig more than 10,000 Canadian companies taken over by foreigners. 98% of FDI in Canada for foreign takeovers

    Defense

    U.S. Employment
    Misconception foreign competition hurts U.S employment
    Greater benefits of free trade dispersed Losses concentrated in a few sectors only Job losses balanced by job creation in other sectors

    Increased Trade U.S- Mexico

    CONCLUSIONS

    Strengthened trade and economic relations between the three countries


    More competitive North American platform Opportunities in the global marketplace Sustaining growth against Asia and South America

    Questions

    References
    http://www.inc.com/encyclopedia/north-americanfree-trade-agreement-nafta.html http://www.ustr.gov/about-us/press-office/pressreleases/archives/2002/january/nafta-partnersspeed-elimination-tariffs http://www.international.gc.ca/trade-agreementsaccords-commerciaux/agr-acc/nafta-alena/tariffaccel.aspx?lang=en&view=d http://en.wikipedia.org/wiki/General_Agreement_o n_Tariffs_and_Trade http://www.inc.com/encyclopedia/north-americanfree-trade-agreement-nafta.html

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