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Which Outcome Is A Drawback Of Treaties Such As The North American Free Trade Agreement (Nafta)

The North American Free Trade Agreement (NAFTA) is a treaty of the United States, Canada and Mexico. it came into force on 1 January 1994. (Since 1989, there has been free trade between the United States and Canada; NAFTA has extended this regime.) On that day, the three countries became the largest free market in the world – the combined economies of the three nations were $6 trillion and directly affected more than 365 million people. NAFTA was created to remove customs barriers for agriculture, manufacturing and services; Eliminating restrictions on investment protection of intellectual property rights. This should be done while respecting environmental and labour concerns (although many observers point to the fact that the three governments have been negligent in environmental and safety at work since the agreement came into force). Small businesses were among those expected to benefit the most from the removal of trade barriers, as this would reduce trade activity in Mexico and Canada and reduce the administrative burden associated with importing or exporting goods. It was also a question of reciprocity. NAFTA would have allowed unlimited access to U.S. vehicles throughout Mexico. A similar agreement works well between the other NAFTA partner, Canada. Mexican trucks can be much heavier than U.S. trucks, and many use a heavy beam suspension system, making them potentially more damaging to U.S. roads.

Many workers and workers` leaders blame trade agreements such as NAFTA for declining employment in U.S. production. The U.S. auto sector has lost about 350,000 jobs – one-third of the industry – since 1994, while employment in Mexico`s auto sector has grown from 120,000 to 550,000. Long before nafta negotiations began, Mexico liberalized its decades-long protectionist trade and investment policy (see page 9 of this report). The restrictive trade regime began after Mexico`s revolutionary period and remained until the early 1980s, when the country was in a debt crisis. At that time, the government took unilateral steps to open up and modernize its economy by easing investment policy and liberalizing trade barriers. Trade liberalization measures launched in the mid-1980s have made Mexico one of the world`s most protected economies one of the most open. Mexico now has 12 free trade agreements with 46 countries.5 A fourth round of talks included a U.S. request for a sunset clause that would end the agreement in five years unless the three countries agreed to keep it in effect, a provision that U.S. Commerce Secretary Wilbur Ross said would allow countries to kill if it did not work.

Canadian Prime Minister Justin Trudeau met with the House Ways and Means Committee because Congress would have to pass legislation that re-releases the treaty provisions if Trump tries to pull out of the pact. [136] Economic growth after NAFTA has not been impressive in any of the countries involved. The United States and Canada have suffered greatly from several economic recessions, including the Great Recession of 2007-09, which overshadowed all the positive effects that NAFTA could have had.

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