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Nafta

"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."


Another thing NAFTA does is as it creates a "trinational superpower", it becomes appealing to foreign investors. For example, Toyota Motor Co. built a $450 million expansion in Ontario to make Corollas for the North American market. Foreign countries want to invest and build plants in North America to get in on the North American market with less hastle. It not only costs less for Canada, the U.S. and Mexico to trade, but it costs less for any foreign corporation with a factory in North America. As well, these new

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

This may show that Canada still exported more to Mexico then it imported from them, but, one must think that when the agreement was first implemented, exports to Mexico may have included factors of production, businesses, etc. If so, these exports will have soon leveled off and jobs would be lost in Canada as businesses moved to Mexico. This has been seen to be case with the United States. "Although U.S. exports to Mexico have grown since NAFTA went into effect, the Administration's [Clinton's] own numbers show that imports from Mexico have gone through the roof; a U.S. trade surplus

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

Lewis, Charles, and Margaret Ebrahim. Ca

Some common words found in the essay are:
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Approximate Word count = 1451
Approximate Pages = 6 (250 words per page double spaced)


  

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