NAFTA (North American Free Trade Agreement)

1
NAFTA (North American Free Trade Agreement)
Tratado de Libre Comercio de América del Norte

• By Tanvi Parmar

Accord de Libre-échange Nord-Américain
2
What IS NAFTA?

• Definition
• A trade agreement made between the governments
  of
• Mexico, Canada and the United States for the
  purpose of
• eliminating trade barriers among them.
• Important Documents
• -North American Free Trade Agreement (with
  preamble,
• 22 chapters, 7 annexes, and articles)
• -procedural forms

3
AGE OF ORGANIZATION

• -Negotiations between three countries since 1986
• -President H.W. Bush, Prime Minister Brian
  Mulroney and President Carlos Salinas met
  together on December 17, 1992 in San Antonio,
  Texas in order to sign agreement.
• -The agreement was then given to each countrys
  legislative in order to
• make changes and approve (protect American
  workers/U.S. partners must
• follow same environment practices and regulations
  like theirs).
• -By the time all the changes were made, Bill
  Clinton became president of
• U.S. and two Canadian prime ministers came into
  office (Campbell/
• Chretien)
• -NAFTA was implemented on January 1, 1994 (18
  years old)

4
Purpose

• Outlined by Article 102 of the agreement
• -eliminate trade barriers and tariffs between
  three countries
• -promote conditions of fair competition
• -increase investment opportunities
• -provides protection and enforcement of property
  rights
• -provides procedure to resolve trade disputes
• -establishes framework for further improvement
  agreement and expand NAFTAs benefits

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Who IS INVOLVED?

• Membership
• -U.S., Canada and Mexico
• Leadership
• -The presidents and prime ministers of these
  three countries meet
• at a North American Leaders Summit and discuss
  there (summit-
• meeting of heads of government/ state with an
  agenda of
• discussion)
• -Each has a Secretariat comprised of a Mexican
  Section (Mexico
• City,), U.S. Section (Washington D.C.) and
  Canadian Section (Ottawa)
• that is responsible for any disputes regarding
  NAFTA

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Advantages of Membership

• -allows 450 million people to trade with each
  other at a lower cost
• -reduces inflation (by decreasing cost of
  imports)
• -creates agreements on international rights for
  business investors
• -reduces cost of trade (greatly benefit and help
  growth in small businesses)
• -increased trade in all goods and services
  (responsible for 1.6 trillion in
• goods and services every year)
• -increases GDP
• -foreign direct investment (when an individual
  or company owns more than
• 10 or more of a foreign business)
• -reduced oil and grocery prices

7
Disadvantages of membership

• -loss of jobs ( U.S. manufacturers sent jobs to
  Mexico for
• cheaper jobs are lost)
• -farmers put out of business (due to subsidized
  farm
• products)
• -wages are suppressed (threaten to send jobs
  away)
• -maquiladora workers are exploited
• -environment destroyed (pressure to compete ?use
• chemicals)

8
International impact-Mexico

• -U.S. Jobs are now getting sent to Mexico (cheap
  labor exploitation)
• -Local Mexican farmers cannot compete with U.S.
  subsidized farm
• products (lost farms)
• -Mexican environment destroyed (due to
  competitive pressure)
• pollution
• -trade increase in products and goods (higher
  growth)
• -Mexican oil is imported for less
• -GDP growth (46)
• -more foreign investment

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INTERNATIONAL IMPACT- canada

• -Canadas trade with U.S. has grown 80
• -U.S.-Canada and Mexico-Canada trade for 484
  billion
• -growth in exports (successful in automotive
  equipment, machinery
• and parts and industrial goods)
• -growth in imports
• -contributed to Canadas attractiveness to
  foreign investors

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What does nafta mean for u.s.?

• -increase in GDP (.5 a year)
• -boosted U.S. farm exports (eliminated high
  Mexican tariffs)
• -created trade surplus in service (financial
  services and healthcare)
• -reduced oil and gas prices
• -increase in foreign direct investment
• -U.S. jobs lost/ U.S. wages suppressed
• -can compete with European Union
• -can compete with China and its trade agreements

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Work Cited

• Information
• -The NAFTA's Impact." Foreign Affairs and
  International Trade Canada. n. page.
• Web. lthttp//www.international.gc.ca/trade-agreem
  ents-accords-
• commerciaux/agr-acc/nafta-alena/nafta5_section04
• .aspx?langenviewdgt.
• -NAFTA Secretariat. n. page. Web.
  lthttp//www.nafta-sec- alena.org/en/view.aspx?x20
  2gt.
• -Amadeo, Kimberly. "History of NAFTA." About.com.
  n. page. Web. 24 Mar. 2012. lthttp//useconomy.abo
  ut.com/od/tradepolicy/p/NAFTA_History.htmgt.
• -Amadeo, Kimberly. "Disadvantages of NAFTA."
  About.com. n. page. Web. 24 Mar. 2012.
  lthttp//useconomy.about.com/od/tradepolicy/p/NAFT
  A_History.htmgt.
• -Amadeo, Kimberly. "Advantages of NAFTA."
  About.com. n. page. Web. 24 Mar. 2012.
  lthttp//useconomy.about.com/od/tradepolicy/p/NAFT
  A_History.htmgt.

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Work Cited

• Pictures
• -http//www.fas.usda.gov/itp/policy/nafta/NAFTA_lo
  gosmall.jpg
• -http//www.ustr.gov/sites/default/files/nafta.jpg
  
• -http//www.augustforecast.com/wp-content/uploads/
  NAFTA_signing.jpg
• -http//www.yesmagazine.org/new-economy/images/naf
  ta-signing-ceremony
• federal-photo/image_preview
• -http//graphics8.nytimes.com/images/2009/03/24/bu
  siness/24peso.650.jpg
• -http//wikis.lib.ncsu.edu/images/0/05/NAFTA.jpg
• -http//www.wnd.com/images/nafta2.jpg
• -http//www.infoplease.com/images/mexico.gif
• -https//www.cia.gov/library/publications/the-worl
  d-factbook/graphics/flags/large/ca
• lgflag.gif
• -https//www.cia.gov/library/publications/the-worl
  d-factbook/graphics/flags/large/us-lgflag.gif