NAFTA Essay Examples

The North American Free Trade Agreement refers to a pact signed between three states in order to propel the economic developments. The agreement entails the commerce issues that lead to an upsurge in the economic developments. However, free trade refers to the unlimited entry to a country’s economy thereby warranting for a free flow of activities due to the eradication of the trade barriers (Maxwell & Tomlin 132). On the other hand, fair trade refers to outlining some rules and regulations that every member country should observe to achieve equity in the sharing of the resources.
Nonetheless, there are the cons and associated with NAFTA. The pros entail; it led to a reduction in the trading tariffs thereby making it easy to export and Import products. It also provided employment opportunities to the citizenry thereby improving their living standards. Therefore, the employment opportunities contributed to the decrease in the social crime in the societies. Conversely, the cons included; it introduced some element of exploitation because the Mexicans benefited less due to the provision of cheap labor at the manufacturing industries that produced U.S good (Gary & Schott 208). Additionally, the free trade involved a lot of regulations that introduced hitches in the trade.
NAFTA is a commerce covenant between U.S.A, Mexico, and Canada, and the member countries signed it but came to effect in 1st January 1994. The forces behind the formation of NAFTA were diverse. However, the need for economic developments in the countries led to the formation of NAFTA. Nonetheless, both Canada and U.S.A had better economic developments than Mexico. NAFTA promised to alleviate the trading tariffs among the three countries. Additionally, they also aimed at enhancing the integration thereby promoting a peaceful coexistence among the citizenry (William 265).
The stakeholder’s perspective was to alleviate the trading tariffs thereby free flow of imports and exports in and out of the countries. On its execution, the Mexicans eliminated the tariffs to the U.S with more than one-half of their exports, on the other hand, U.S export tariffs to Mexico reduced by a third. Both Mexico and U.S aimed at totally eliminating the tariffs in the tariffs, but the U.S would exempt their agriculture exports from free tariffs. However, the elimination of the tariffs was subjective, and it would trigger some negative reactions from Mexico. It is because the introduction of the tariffs on the U.S agricultural products would earn U.S foreign exchange due to the taxes paid (Joseph 278).
NAFTA impacted on different fields in all the three countries. It increased trade activities in Mexico through the encouragement of the free exports. In addition, it alleviated the unemployment rates in Mexico because most the Mexicans secured jobs in the U.S manufacturing industries. Therefore, the employment opportunities helped in the improvement of the Mexicans living standards. The strength of the domestic industry also increased because the locals would freely engage in the commerce (Maxwell & Tomlin 96). The GDP also increased as a result of an increase in the Foreign Direct Investment. Nonetheless, NAFTA has led to an increase in poverty in Mexico among the farmers. The trade agreement led to the U.S and Canada to lower the price of their corns thereby disadvantaging Mexico because it meant that no one would purchase their farm produce due to the high prices.
In Canada, NAFTA led to an increase in the furniture and agriculture industries. However, the employment level stabilized because some Canadians secured job opportunities in the industries. Therefore, the workers were able to meet their basic needs. On the other hand, the strength domestic industry amplified because the exports became more than the imports. As a result, the country experiences a stronger domestic industry because they spent less on the imports and earned more on the exports (William 304).
NAFTA improved trade relations in the U.S due to the taxes charged for the agricultural products. However, the construction of the industries negatively affected the employment opportunities because most of the U.S manufacturers gave the Mexicans the jobs available in the industries. However, the living standards improved in the U.S because the trade warranted the free circulation of money. As a result, the money exchanging hands among the citizens led to its spending on the different needs and wants (Gary & Schott 114).
NAFTA led to the growth of free trade, which had both pros and cons. Free trade could increase the introduction of counterfeit products in the markets thereby affecting the quality of the products. As a result, the consumers would lose the loyalty of the quality and the variety of the goods provided thereby a reduction in the consumption level. The introduction of the free trade could introduce a laziness element in the trade because the countries needed not to worry about the taxes charges on the goods. On the other hand, other countries used the moment to exploit the other countries by increasing the level of exports thereby maximizing the Foreign Direct Investment. Therefore, NAFTA should revise the agreements in order to bring regulations that would deter and discourage the exploitation and the sluggish behavior among the states.

Works Cited

Cameron, Maxwell A, and Brian W. Tomlin. The Making of Nafta: How the Deal Was Done.
Ithaca [N.Y.: Cornell University Press, 2002. Print.
Hufbauer, Gary C, and Jeffrey J. Schott. Nafta: An Assessment. Washington, DC: Inst. for
Internat. Economics, 1993. Print.
McKinney, Joseph A. Created from Nafta: The Structure, Function, and Significance of the
Treaty's Related Institutions. Armonk, N.Y: M.E. Sharpe, 2000. Print.
Orme, William A. J. Understanding Nafta: Mexico, Free Trade, and the New North America.
Austin, Tex: Univ. of Texas Pr, 1996. Print.