North

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North America Free Trade Agreement
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NAFTA Who?

• NAFTA, the North American Free Trade Agreement,
  was signed by the United States,
  Canada, and Mexico.

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NAFTA What?

• NAFTA was written to create a Free Trade Area in
  North America.
• Free Trade means that countries may freely
  trade goods with each other without having to pay
  a tariff (tax) on those goods.
• In other words, free trade means no trade
  barriers!

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NAFTA When?

• NAFTA was signed in 1993 and went into effect on
  January 1, 1994.

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NAFTA Why?

• The purpose of the agreement is to
• Reduce barriers and encourages trade between
  member countries.
• Allow free movement of goods and services among
  the countries.
• Encourage cooperation among countries.

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NAFTA Pros

• Free trade increases sales and profits for
  Mexico, Canada and the U.S.A., thus strengthening
  their economies.
• Lack of tariffs has allowed Mexico to sell its
  goods in the USA and Canada at lower prices.
  This makes Mexican products more competitive in
  these markets and increases Mexicos profits as
  it tries to develop its economy.
• Free trade is an opportunity for the U.S. to
  provide financial help to Mexico by making jobs
  available in factories located there.

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NAFTA Trade Growth

• Most economists agree that the agreement has been
  good for the countries involved.

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What is the best title for this cartoon?
a. NAFTA Members Prepare for Picnic! b.
NAFTA Members Graciously Share Business
Ventures! c. NAFTA Members Cover Up
Conspiracy! d. NAFTA Members Vie For
Business!
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What might be some criticisms of NAFTA?
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NAFTA Cons

• Free trade has caused more U.S. job losses than
  gains, especially for higher-wage jobs.

• Factories, called Maquiladoras, are built on the
  Mexican border and workers are hired there to
  make goods at a much lower wage than workers
  would be paid in the U.S.A.

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MAQUILADORASWages

• Minimum WageMexico - 3.40 per day vs. US -
  5.15 per hour
• Example Hourly compensation costs for production
  workers in manufacturingMexico - 1.21 vs US -
  17.70
• (Global Trade Watch, The NAFTA Index, October 1,
  1998)

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Companies with

• 3 Day Blinds
• 20th Century Plastics
• Acer Peripherals
• Bali Company, Inc.
• Bayer Corp./Medsep
• BMW
• Canon Business Machines
• Casio Manufacturing
• Chrysler
• Daewoo
• Eastman Kodak/Verbatim
• Eberhard-Faber
• Eli Lilly Corporation
• Ericsson
• Fisher Price
• Ford
• Foster Grant Corporation
• General Electric Company
• JVC

• Honda
• Honeywell, Inc.
• Hughes Aircraft
• Hyundai Precision America
• IBM
• Matsushita
• Mattel
• Maxell Corporation
• Mercedes Benz
• Mitsubishi Electronics Corp.
• Motorola
• Nissan
• Philips
• Pioneer Speakers
• Samsonite Corporation
• Samsung
• Sanyo North America
• Sony Electronics
• Tiffany

Maquiladoras
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Is NAFTA good for everyone?

• Your Turn to Teach!
• You will create a poster that expresses the
  viewpoint of the roll that you chose.
• Your group will use the poster to present your
  viewpoint to the rest of the class.

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American Business Owners

• Do you think American business owners would like
  NAFTA and maquiladoras? Why or why not?
• 1. They can move their factories to Mexico and
  ship the goods to the US with no tariffs.
• 2. They would not have to pay the Mexican workers
  as much as in the United States.

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Mexican Business Owner

• Would Mexican Business owners like NAFTA? Why or
  why not?
• 2.They would not like foreign-owned factories
  because they would create competition.

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Mexican Government

• Would a Mexican Government official like NAFTA?
  Why or why not?
• 1. NAFTA would be good for the economy of Mexico.
• 2. Maquiladoras would provide jobs for Mexicans,
  but the profit made by maquiladoras would go back
  into the US economy, not into Mexicos

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Mexican Factory Worker

• Would a Mexican factory worker like NAFTA and
  maquiladoras? Why or Why Not?
• 1. It would provide a job in a country where
  there are not enough jobs
• 2. However, the wages are very low and the
  working conditions are not good

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American Factory Worker

• Would an American factory worker like NAFTA and
  maquiladoras? Why or why not?
• 1. Many American factory workers lose their jobs
  because the owners move the factories to Mexico.
  American factory workers cannot move to Mexico to
  keep their jobs.

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Environmentalists

• Would an environmentalist like NAFTA and
  maquiladoras? Why or why not?
• 1. Building factories creates pollution. An
  environmentalist would want to make sure the US,
  Canada, and Mexico all had laws to protect the
  environment. Because all three countries are
  neighbors, air pollution from one affects them
  all.

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American Consumer

• Would the American consumer like NAFTA and
  maquiladoras? Why or why not?
• 1. Goods made in Mexico would cost a lot less
  because labor is cheaper there. (Cheaper goods
  would be available to American consumers.)

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• Thanks to Mr. Moon for sharing this PowerPoint!