Globalization Essays Examples

The North American Free Trade Agreement is one of the most important regional agreements of the North American continent, which aims at improving the economy and raising the standard of living of the citizens of the member countries. The member countries who signed the agreement include Canada, the United States and Mexico . The agreement came into existence on 1st January, 1994 to improve the access for goods, services and products among the three member countries. It created the world’s largest free trade zone by eliminated various barriers in terms of tariffs and laid the groundwork for growth and prosperity of the economy in the three member countries. The agreement increased has created several jobs, lowered the prices and improved the purchasing power of the customers. It also benefited the farmers, businesses, workers and many others in terms of smooth implementation of trade.
One of the major disadvantages of NAFTA is that it rendered various jobs at lower wages to Mexico. Secondly, the subsidized farm products produced in the US led to the loss of business of several Mexican farmers. Thirdly, most of the industries moved from the US to the Mexico due to cheap labor and low plant establishment costs when compared to the US. The agreement also suppressed the labor wages in the US. It deteriorated the environment of Mexico by increasing the rate of pollution through deforestation. When compared to another regional trade agreement, Pacific Alliance, which includes the Latin American countries of Mexico, Columbia, Peru and Chile, NAFTA imposes lower tariffs . It also lowered the cost of gas imported from the Middle East. While Pacific Alliance has integrated the labor markets through trade and finance, NAFTA has disposed most of the labor market to Mexico due to higher costs in Canada and the US.

Works Cited

Boskin, Michael. NAFTA at 20: The North American Free Trade Agreement's Achievements and Challenges. Hoover Institution Press, 2014.
Farnsworth, Eric. "NAFTA and the Pacific Alliance." 05 Aug 2013. Americas Society/ Council of the Americas. 22 Apr 2015 <http://www.as-coa.org/articles/nafta-and-pacific-alliance>.