NAFTA North America Free Trade Agreement Simplest trade blocks Only 3 countries in it o US, Canada, Mexico It is trade, no more no less going on here Facilitate trade between these countries Signed into law in 1994 Newer trade blocks on Earth Slashed 50-75% of tariffs between US and Mexico US and Canada may be biggest trade partners Different environmental standards in these countries, pay different wages Lesser developed countries have advantage with cheap labor and wages Richer ones have technology advantage , agricultural products are made cheaper than poorer ones o Tractors and subsidies What else needs to be negotiated/standardized between countries in free trade area? Environmental standards, Mexico has low one, Canada has high ones Consumer protection Copyright laws Impacts of NAFTA o Massive job/industry movement to Mexico o Started maquiladoras – factory towns in Mexico on US border o Increased jobs/salaries/wealth in Mexico o Increased US exports to Mexico People eating more beef in Mexico, America has biggest beef industry in the world o Certain sectors of economy in all 3 countries recalibrated or eliminated Winter time – all fruit comes from Mexico Milk industry in Mexico goes down o Many people blame NAFTA for de-industrialization of North Eastern US Crucial to 1992 US presidential campaign Ross Perot Ran against NAFTA He was right, jobs migrated to Mexico But with no doubts, trade increased for all 3 countries o
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- Fall '08
- International Trade, North American Free Trade Agreement, World Trade Organization, Trade bloc