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NAFTA

The Impact of NAFTA in the U.S. and Mexico

The North American Free Trade Agreement, often referred to as NAFTA, is an agreement between the U.S., Canada and Mexico. The purpose of NAFTA is to reduce and eventually erase trade barriers, which would make it easier for the three countries to import and export goods and services more freely between each other. NAFTA had started as an agreement between the United States and Canada, then in 1992, Mexico joined the venture. The union of these countries made sense, mainly because of their proximity to each other and the benefits that each would soon come to realize.

Some of the key contents in the NAFTA agreement was that in a ten year period, most all of the tariffs on the goods would be removed, it provided for the protection of intellectual property, easier access to invest in foreign industries, that is with a few exceptions which would exclude key markets for that country. For example, Mexico was not willing to open the door to its energy and railway industries. NAFTA also meant freer flow of services, which would allow unrestricted access to some of the country's markets. Even more importantly, NAFTA made sure that environmental and ethical standards were in place


Before NAFTA became law in 1994, both supporters and opposers have had much to say about what NAFTA would mean to various industries and stakeholders. Supporters of NAFTA argued that each country would become more efficient and that the demand for goods between these countries would increase. Thereby opening markets that each country would not have realized prior to the agreement. Mexico was the country that would take the biggest risk in this agreement. Either Mexico's economy would thrive or they would see the effects of being the inferior party.

In conclusion, what has been the effects of NAFTA on the U.S. and Mexico? Some believe it is too soon to tell. Though many observations have been made. In summary these observations are that the net gains for the U.S. has been very small, NAFTA has had little effect on what was already transpiring between the U.S and Mexico, that is the increased trade between the two. Also, agreements such as NAFTA have proved to enhance political relations between the countries. It seems the real losers in regional trade agreements are non-members of the agreement.

. Two parties were commissioned to ensure that there was no abuse of the environment, wages or child labor to name a few

What has really happened since the inception of NAFTA? Has there been a mass movement of jobs into Mexico? Has Mexico seen any benefits? Based on reports from various political and economic sources, there has not been any substantiated proof that NAFTA has created high gains or losses to the U.S. or Mexico. Many of the jobs that U.S. companies have transferred into Mexico have been low-skilled, manufacturing jobs. Mainly in the areas of textile and apparel assembly. The movement of these types of jobs into Mexico is because of the inexpensive labor and the composition of the workforce. Mexico's workforce tend to be less skilled than the American workforce. This is due to the slow development of technology or lack of, and slow economic growth. It is more logical to move jobs into Mexico that requires less knowledge and training. With the export of these types of jobs into Mexico, the demand from Mexic

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Approximate Word count = 1449
Approximate Pages = 6 (250 words per page double spaced)


  

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