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NAFTA curse or commerse

"The free trade argument states that, if each nation produces what it does best and permits trade, over the long run all will enjoy lower prices and higher levels of output, income, and consumption that could be achieved in isolation." (Lewis 29) The North American Free Trade Agreement (NAFTA), implemented in January of 1994, created a situation in North America in which there are no taxes on most products imported and exported between the three countries. Ideally, the governments of Canada, the U.S. and Mexico believed that breaking the trading barriers would increase jobs and other things as

it bettered each of their economies. NAFTA, however, has not necessarily helped the economies in the way in which the governments had projected. There was much speculation before the signing of the treaty that NAFTA would not work out the way it was projected to.

Some economists believed that one major problem which NAFTA would create, as opposed to what the governments thought, is loss of jobs. "In Canada and the United States, much of the political opinions against NAFTA has centered around the low wage rates in Mexico and the possibility of jobs being moved south of the Rio Grande River."


group USA-NAFTA claimed that "NAFTA itself will improve working conditions by generating economic growth, which will enable all three countries to provide more jobs with higher pay in a better working environment." (Harbrecht 82) However, this proved not to be the case. In actuality, NAFTA has given corporations more power to lower wages and decrease working conditions. "The most direct method is through 'whipsaw bargaining,' or threatening to shift production to Mexico unless workers agreed to concessions." (80) In a situation where one's job is at risk, one must accept wage and benefit cuts. It seems as though since the implementation of NAFTA, workers rights have diminished. Even though productivity growth has occurred in many corporations, "In Canada, as well as in the U.S., real wages are stagnating and the proportion of full-time workers living in poverty continues to grow." (Lewis 28) There should never be any workers, let

Dentzer, Susan. The Pain and Gain of Trade. U.S. News Sept. 1992

Another advantage NAFTA gives to the Canadian economy is higher productivity levels. Canadian corporations with plants in Mexico produce goods at lower costs. Canadian corporations benefit with these low production costs, due to low hourly work

alone full-time workers, living in poverty.In Canada as in any country, poverty should not exist among the working class. This is definitely not the case in Mexico where NAFTA has slammed the middle class back into poverty. Another thing which NAFTA affects is the environment. NAFTA supporters promised that the agreement would lead to increased investment in environmental cleanup and less maquiladoras along the U.S.-Mexico border. However, many communities still lack access to both water and sewage systems. "Today, only 10 percent of Mexico's yearly output of 7 million tons of hazardous waste receives adequate treatment, with the rest poured into clandestine waste dumps or municipal sewers." (Harbrecht 16)

Harbrecht, Douglas. What Has NAFTA Wrought? Plenty Of Trade. Business Week

Lewis, Charles, and Margaret Ebrahim. Can Mexico and Big Business USA Buy

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Approximate Word count = 1423
Approximate Pages = 6 (250 words per page double spaced)


  

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