Nafta Project by- WASIF RAZA

8/8/2019 Nafta Project by- WASIF RAZA..

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WASIF RAZA - PH 1046


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United States

Canada

Mexico


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Th e North American Free Trade Agreement (NAFTA ) is atrilateral trade bloc in Nort h America created by t h e governments of th e United States, Canada, and Mexico.

Th e agreements were signed in December 1993 by t h e leaders of th e t h ree countries Brian Mulroney of Canada, Carlos Salinasde Gortari of Mexico , and Bill Clinton of the United States butdid not come into effect until January 1, 1994.

In terms of combined purc h asing power parity GDP of its members,as of 2007 t h e trade bloc is t h e largest in t h e world and secondlargest by nominal GDP comparison.

It also is one of t h e most powerful, wide-reac h ing treaties in t h eworld.


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Secretariats- Mexico City, Ottawa , Washington D.C.L anguages- Fr ench, English, SpanishM embership- Canada, United States and MexicoE stablishment - Formation Janua r y 1, 1994A rea - Total 21,783,85 0 km 2Po

pulatio

n - 2010 estimate 456,416 ,628GD P (PPP)- 2008 (IMF) estimate- Total$ 17,153,462 tr illionGD P (nominal )2008 (IMF) estimate- Total$ 16 ,792 tr illion


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Impr ove political r elationshi ps amongst the member count r ies.

Enhance the co mpetitive advantage of the co mpanieso per ating in the U SA , Canada & Mexico in wide r Inter national mark ets

Hel p Mexico to ea r n additional fo r ex to meet its fo r eignde bt bur den.

Dec r ease the flow of e migr ation f r om Mexico to the U S by pr oviding the m jo b o ppor tunities.

Cr eate a sta ble and pr edicta ble envi r onment fo r investo r s.


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The goal of N AFTA was to eli minate barr ier s of tr ade andinvest ment between the U SA , Canada and Mexico. Theimp lementation of N AFTA on Janua r y 1, 1994 , br ought the

imm ediate eli mination of ta r iffs on more than one half of US imports from Mexico and more than one third of US exportsto Mexico.

Within 10 year s of the imp lementation of the ag r eement all

US-Mexico ta r iffs would be eliminated exce pt for some USagr icultu r al ex por ts to Mexico that we r e to be phased out in 15year s. Most U S-Canada t r ade was al r eady duty f r ee. NAFTAalso see k s to eliminate non -tar iff tr ade barr ier s and pu blishe r .


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The Nor th Amer ican Fr ee Tr ade Agr eement ( NAFTA) has twosu pp lements: - Nor th Amer ican Agr eement on Envi r onmental Coo per ation ( NAAEC) and Nor th Amer ican Agr eement on La bour Coo per ation ( NAA LC).

( NAAEC) was a r es ponse to envi r onmentalists' conce r ns that the UnitedStates would lowe r its standa r ds if the th r ee count r ies did not achieveconsistent envi r onmental r egulation.

( NAA LC) su pp lements NAFTA and endeavo r s to cr eate a foundation fo r coo per ation a mong the th r ee count r ies for the r esolution of la bour

pr o blems, as well as to pr omote gr eate r coo per ation among tr ade unionsand social o r ganizations in o r der to fight fo r impr oved la bor conditions.


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Clea r ly not a bout chea p la bor It is a bout integ r ation of the No r th Am er ican mark et placeIt is a bout moving u p the value -added chainIt is a bout maintaining and inc r easing co mpetitiveness and

pr oductivityMexico, li k e the U.S., fear s losing its manufactu r ing secto r to othe r count r ies why?Ove r the last 5 yea r s:

o Chinas exports to the U.S. grew 300%o Mexicos exports to the U.S. grew 30%


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Wor lds lar gest f r ee tr ade ar ea: 442.4 m illion peo ple;$15.4 tr illion GD P

No tar iffs on U. S. ex por ts to Mexico; final ta r iffseliminated in 2 008

Elimination of Ba rr ier s

Institution of Dis pute R esolution Pr ocess

U.S-Mexico t r ade inc r eased 377%: f r om $88 billion in

199 3 to $347 billion in 2 007


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Maquilado r as (Mexican facto r ies which ta k e in impor ted r awmater ials and pr oduce goods fo r ex por t) have become theland mark of tr ade in Mexico.

These a r e plants that moved to this r egion f r om theUnited States, hence the de bate ove r the loss of Am er ican jo bs.The inco me in the maquilado r a secto r has inc r eased 15.5%since the i mp lementation of N AFTA in 1994 .

Othe r secto r s now benefit f r om the f r ee tr ade ag r eement, andthe sha r e of ex por ts f r om non -bor der states has inc r eased inthe last five yea r s while the sha r e of ex por ts f r ommaquilado r a-bor der states has dec r eased.


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NAFTA is a br oad ag r eement, but impr oved mark et access, includingtar iff r eductions on mer chandise t r ade, was the ma jor U.S. goal.

After ten yea r s, most tar iffs have gone to ze r o, exce pt for some ver ysensitive (mostly ag r icultu r al) goods that have li mited pr otection fo r u p to 15 year s. Clea r ly, U.S.-Mexico t r ade and invest ment havegr own sha rp ly ove r the past decade.

Fr om 1994 to 2008, U.S. ex por ts to Mexico r ose 91%, compar ed to41% to the wo r ld. U.S. impor ts incr eased by 179%, compar ed to89% f r om the wo r ld.


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NAFTA EU(25) & Japan

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I MPACT ON JOB S

The study's indicates that the reduction in net exports toMexico has eliminated 227,663 U.S. job opportunities since1993, and the reduction in net exports to Canada has

eliminated 167,172 job opportunities in the same period. Intotal, NAFTA resulted in a net loss of 394,835 jobs in itsfirst three years.

The analysis finds that NAFTA has eliminated significantnumbers of jobs for women and members of minoritygroups, as well as white males. Between 1993 and 1996,women lost 141,454 jobs to NAFTA, blacks lost 36,890

jobs, and Hispanics lost 22,520 jobs, numbers closely

reflecting these groups' shares in manufacturing industries .


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NAFTA eliminates tr ade barr ier s.

Benefits the impor ter s by r educed or duty f r ee goods.

No MPF f r om Canada for NAFTA goods.

Can mak e the ex por ter mor e competitive then othe r non - par tici pating count r ies.

200% inc r ease in tr ade among the 3 count r ies.

Incr ease mark et access within each count r y.


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It has negative i mp acts on fa rmer s in Mexico who saw food pr ices fall based on chea p impor ts f r om U.S. agr i business.

It has negative i mpacts on U. S. work er s in manufactu r ing andasse mb ly indust r ies who lost jo bs.

Cr itics also a r gue that N AFTA has cont r i buted to the r isinglevels of inequality in both the U. S. and Mexico.

Some econo mists believe that N AFTA has not been enough(or work ed fast enough ) to pr oduce an econo mic conve r gence,nor to su bstantially r educe pove r ty r ates.


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NAFTA is one of the most successful t r eaties of thetimes in terms of gr owth in t r ade i.e. impor ts & ex por ts ,G.D. P etc. but on the othe r hand it is also r es ponsi ble for

causalities li k e loss of jo bs, migr ation, r ising level of inequality and many othe r s.

Thus, it is impor tant that the t r eaty should be carr iedfor war d conce r ning a bout tak ing ste ps for the pr o blemsor iginated due to N AFTA ,othe r wise it will c r eateinequality in many te rms which can lead to badconditions in futu r e for all the th r ee count r ies.

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Nafta Project by- WASIF RAZA