AEM_ECON_2300_Lecture_13___Spring_2009

AEM_ECON_2300_Lecture_13___Spring_2009 - Lecture 13 North...

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Lecture 13 1 of Professor David Lee AEM-ECON 2300 North American Free Trade Agreement Originated with: Mexican domestic economic reforms in 1980's: cut tariffs and non-tariff barriers; reduced import licenses; eliminated restrictions on cross-border financial transactions; began program of privatization and deregulation. Joined GATT in 1986. Canada-U.S. Free Trade Agreement in 1989, establishing free trade area over 10 years. One of 50+ regional trade agreements in Western Hemisphere since late 1980's; regional FTAA agreement, effective 2005.
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Lecture 13 2 of Professor David Lee AEM-ECON 2300 Comparative statistics of the three NAFTA countries Gross domestic products U.S. 89% Canada 7% Mexico 4% Populations U.S. 68% Canada 8% Mexico 24% Exports U.S. 68% Canada 21% Mexico 11% Imports U.S. 75% Canada 16% Mexico 9%
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Lecture 13 3 of Professor David Lee AEM-ECON 2300 North American Free Trade Agreement NAFTA agreement effective January 1, 1994, with major objectives of: Increasing trade within region relative to that with external trading nations. Increasing competitiveness Increasing exports to other trading blocs Enhancing industrial complementarity
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Lecture 13 4 of Professor David Lee AEM-ECON 2300 North American Free Trade Agreement Main provisions: Elimination of import tariffs over 15 years, including in controversial sectors such as agriculture, automobiles, and textiles (only for North American-produced fibers and yarn). Elimination of many non-tariff barriers, including restrictions in petrochemical industry investment, transportation (esp. trucking), and investment in financial services. Intellectual property protection. Establishment of dispute settlement procedures
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Lecture 13 5 of Professor David Lee AEM-ECON 2300 North American Free Trade Agreement Side agreements reached in environment and labor to: Investigate abuses in either area. Impose fines or trade sanctions if countries fail to enforce environmental laws or labor standards
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Lecture 13 6 of Professor David Lee AEM-ECON 2300 U.S. exports and imports (Billions of U.S.$ and percent of total U.S. exports and imports) 1990 1992 1994 1996 1998 Canada exports billion US$ 99.1 109.7 132.3 134.5 156.5 percent  18.4 17.6 18.9 22.0 23.3 imports billion US$ 101.1 109.1 143.0 158.7 177.4 percent  16.5 16.6 17.7 19.8 19.3 Mexico exports billion US$ 35.8 49.5 59.8 56.7 79.0 percent  6.5 8.0 8.5 9.3 11.8 imports billion US$ 38.1 43.3 58.6 75.1 94.7 percent  6.2 6.6 7.3 9.3 10.3
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Lecture 13 7 of Professor David Lee AEM-ECON 2300 Canadian and Mexican exports to and imports from the United States as a percentage of total exports and imports year exports imports exports imports 1991 75.8% 62.3% 79.5% 73.9% 1992 77.8% 63.5% 81.1% 71.3% 1993 81.3% 65.0% 83.3% 71.2% 1994 82.5% 65.8% 85.3% 71.8% 1995 80.4% 66.7% 83.6% 74.5% 1996 82.3% 67.4% 84.0% 75.6% 1997 83.2% 67.5% 85.6% 74.8% 1998 86.0% 68.2% 81.3% 73.7% Canada Mexico
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AEM_ECON_2300_Lecture_13___Spring_2009 - Lecture 13 North...

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