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Unformatted text preview: developing country exporters by as much as $7 billion and provided net welfare gains of up to $2 billion. Question 4: NAFTA (5 Points) In your opinion, why was the formation of NAFTA so controversial in the US, while the formation of Canada-US FTA was little noticed by most Americans?-The main opposition to the formation of NAFTA came from those who feared that lowering barriers to trade with Mexico would cause U.S. wages to fall and U.S. capital to relocate to Mexico to take advantage of lower wages and regulatory standards there. In contrast, Canadian wages are equal to or slightly higher than U.S. wages and Canadian regulatory laws are significantly more complex than U.S. laws. Thus, the major opposition to that agreement was by some segments of the Canadian populace on the grounds that Canadian firms could not compete with U.S. firms and that more open markets between the two countries would diminish the cultural differences between the two societies....
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- Spring '11