NAFTA

NAFTANORTH AMERICAN FREE TRADE

AGREEENT

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WHAT IS NAFTA?• The North American Free Trade Agreement

(NAFTA ) is a trilateral trade bloc k in North America created by the governments of the United States, Canada, and Mexico.

• The agreements were signed in December 1993 by the presidents of the three countries and it came into effect from 1st Jan. 1994.

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AMENDMENT

• Final provisions (NAFTA) were fully implemented on January 1, 2008.

• NAFTA one of the most successful trade agreements in history and has contributed to significant increases in agricultural trade and investment.

• Most comprehensive Regional Trade Agreement signed by the United States.

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TRADE AND INVESTMENT EFFECTS

• NAFTA is a broad agreement. • From 1994 to 2008, U.S. exports to Mexico rose 91%,

compared to 41% to the world. U.S. imports increased by 179%, compared to 89% from the world.

• After fourteen years, most tariffs have gone to zero, except for some very sensitive (mostly agricultural) goods that have limited protection for up to 15 years.

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NAFTA SUPPLEMENTS

• The North American Agreement on Environmental Cooperation (NAAEC)

• The North American Agreement on Labour Cooperation (NAALC)

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NAFTA IN PERSPECTIVE• U.S. two-way trade with Canada and Mexico

exceeds U.S. trade with the European Union and Japan combined.

• In fact, US trades more with Maxico in a month than trade with other countries in a year. US exports more to Mexico in a day than with Paraguay in a year.

• US exports more in a week with Canada than with Central America in a year.

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U.S. TRADE IN PERSPECTIVE2008

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TOP TEN COUNTRIES WITH WHICH THE U.S. TRADES

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EFFECTS OF NAFTA

• BENEFITS.

• LIMITATIONS.

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BENEFITS• NAFTA eliminates trade barriers. • Benefits the importers by reduced or duty free

goods. • No MPF from Canada for NAFTA goods. • Can make the exporter more competitive then

other non-participating countries. • 200% increase in trade among the 3 countries. • Increase market access within each country.

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U.S. – NAFTA TOTAL TRADE1994-2008

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LIMITATONS• It has negative impacts on farmers in Mexico who saw food prices

fall based on cheap imports from U.S. agribusiness.

• It has negative impacts on U.S. workers in manufacturing and assembly industries who lost their jobs.

• Critics also argue that NAFTA has contributed to the rising levels of inequality in both the U.S. and Mexico.

• Some economists believe that NAFTA has not been enough (or worked fast enough) to produce an economic convergence, nor to substantially reduce poverty rates.

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KEY NAFTA PROVISIONS

• Sanitary and Phytosanitary Measures• Export Subsidies • Internal Support • Grade and Quality Standards • Rules of Origin

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NAFTA COMPLIANCE TEAM• three persons’ team dedicated to resolving nafta

market access and compliance cases.

• team leader, mexico and canada desk officers

• the team combines experience in understanding nafta regulations with specific country expertise

• try to resolve problems by persuading foreign country to come into compliance voluntarily, avoiding time and effort involved in formal dispute settlement

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PUBLIC OPINION

• Public opinion towards NAFTA in the United States, Canada, and Mexico is mixed. A survey conducted by CIDE and COMEXI in Mexico showed that 64 percent of the Mexican public favored NAFTA.

• The Program on International Policy Attitudes reported in a poll that 47 percent of Americans thought that NAFTA has been good for the United States, while 39 percent thought it had been bad for the country

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IMPACT ON JOBS• The studies indicate that the reduction in net exports to

Mexico has eliminated 227,663 U.S. job opportunities since 1993, and the reduction in net exports to Canada has eliminated 167,172 job opportunities in the same period. In total, NAFTA resulted in a net loss of 394,835 jobs in its first three years.

• The analysis has found that NAFTA has eliminated significant numbers of jobs for women and members of minority groups, 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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RECENT NAFTA NEWS• NAFTA Toll Highway Destroying Prime Agricultural Land

The Trans-Texas Corridor (TTC) is no ordinary highway. The toll road would be four football fields wide. It includes separate lanes (up to six for automobiles, four for large trucks), plus tracks for freight trains, separate tracks for high-speed and commuter rail, also space for oil and gas pipelines, electricity wires, and broadband transmission cables.

The implications of this scheme are staggering. Some experts say that up to a million people in Texas stand to lose their homes and 584,000 acres of rich farm and ranchland are to be destroyed, all for a privately funded highway.

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CONCLUSION• NAFTA is one of the most successful treaties of the times in

terms of growth in trade i.e. imports & exports , G.D.P etc. but on the other hand it is also responsible for causalities like loss of jobs, migration, rising level of inequality and many others.

• Thus it is important that the treaty should be carried forward concerning about taking steps for the problems originated due to NAFTA ,otherwise it will create inequality in many terms which can lead to bad conditions in future for all the three countries.

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