The North American Free Trade Agreement (Nafta) Is An Example Of A

Through NAFTA, the three signatories agreed to eliminate trade barriers between them. By removing tariffs, NAFTA has increased investment opportunities. The United States had already concluded a free trade agreement (FTA) with Canada in 1988, but the addition of a less developed country like Mexico was unprecedented. Opponents of NAFTA have picked up the wage gap with Mexico, which had a per capita income of only 30 percent [PDF] of the United States. U.S. presidential candidate Ross Perot argued in 1992 that trade liberalization would lead to a “huge suction noise” of American jobs fleeing the border. Supporters like Presidents Bush and Clinton responded that the deal would create hundreds of thousands of new jobs a year, while Mexican President Carlos Salinas de Gortari saw it as an opportunity to modernize the Mexican economy, so it would “export goods, not people.” The debate on the impact of NAFTA on signatory countries continues. While since the implementation of NAFTA, the United States, Canada and Mexico have experienced all the economic growth, higher wages and increased trade, experts disagree on how much the agreement has actually contributed to these benefits, if any, in terms of jobs in American manufacturing, immigration and consumer goods prices. The results are difficult to isolate and other important developments have taken place on the continent and around the world over the past quarter century. An “ancillary” agreement concluded in August 1993 to enforce existing national labour law, the North American Agreement on Labour Cooperation (NAALC) [39], was severely limited. Citizens have benefited from NAFTA, while no one has said that NAFTA harms American citizens on average. [5] A 2001 review of the Journal of Economic Perspectives found that NAFTA was a net benefit to the United States.

[6] A 2015 study showed that welfare in the U.S. increased by 0.08% as a result of NAFTA tariff reductions and intra-bloc trade in the U.S. increased by 41%. [63] Mexican politicians saw NAFTA as a chance to accelerate and secure these hard-won reforms of the Mexican economy.