NAFTA

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NAFTA

• Do we need this policy?

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Maquiladora?

• There was a man who raised grain. After he would
  harvest the grain, he would take it to the miller
  who would grind it. The miller would keep a
  portion of the grain as payment for grinding it.
  This was called a maquil.
• The second part of the word dora means
  association/corporation.

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History of Trade Agreements

• The European Union is the world's largest
  confederation of independent states, established
  under that name in 1992. However, many aspects of
  the Union existed before that date through a
  series of predecessor relationships, dating back
  to 1951.
• The Free Trade Agreement (FTA) was a trade
  agreement reached by Canada and the United States
  in October 1987.
• The North American Free Trade Agreement is a free
  trade agreement among Canada, the United States
  of America, and Mexico, NAFTA went into effect on
  January 1, 1994.
• Originally, the agreement encompassed the United
  States and the Central American countries of
  Costa Rica, El Salvador, Guatemala, Honduras, and
  Nicaragua, and was called CAFTA. In 2004, the
  Dominican Republic joined the negotiations, and
  the agreement was renamed DR-CAFTA.
• Mercosur or Mercosul is a customs union between
  Brazil, Argentina, Uruguay, Paraguay and
  Venezuela, founded in 1991 by the Treaty of
  Asunción, which was later amended and updated by
  the 1994 Treaty of Ouro Preto.

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What would NAFTA do for our country and other
countries?

• Simple idea
• NAFTA called for immediately eliminating duties
  on half of all U.S. goods shipped to Mexico and
  Canada, and gradually phasing out other tariffs
  over a period of about 14 years.

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NAFTA promoters

• - including many of the worlds largest
  corporations - promised it would create hundreds
  of thousands of new high-wage U.S. jobs, raise
  living standards in the U.S., Mexico and Canada,
  improve environmental conditions and transform
  Mexico from a poor developing country into a
  booming new market for U.S. exports.

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Good things about NAFTA

• Economic studies have indicated that rather than
  creating an actual increased trade, NAFTA has
  caused trade diversion, in which the NAFTA
  members now import more from each other at the
  expense of other countries worldwide. Some
  economists argue that NAFTA has increased
  concentration of wealth in both Mexico and the
  United States. After the signing of NAFTA, trade
  between the nations have soared dramatically,
  with trade between the United States and Mexico
  doubling. 1
• More jobs!!!!!!!!

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NAFTA opponents

• including labor, environmental, consumer and
  religious groups - argued that NAFTA would launch
  a race-to-the-bottom in wages, destroy hundreds
  of thousands of good U.S. jobs, undermine
  democratic control of domestic policy-making and
  threaten health, environmental and food safety
  standards.
• http//www.citizen.org/trade/nafta/

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Bad things about NAFTA

• NAFTA has been controversial since it was first
  proposed. Transnational corporations have tended
  to support NAFTA in the belief that lower tariffs
  would increase their profits. Labor unions in
  Canada and the United States have opposed NAFTA
  for fear that jobs would move out of the country
  due to lower labor costs in Mexico. Some
  politicians have opposed free trade for fear that
  it will turn countries, such as Canada, into
  permanent branch plant economies. Farmers in
  Mexico have opposed and still oppose NAFTA
  because the heavy agriculture subsidies for
  farmers in the United States have put a great
  deal of downward pressure on Mexican agricultural
  prices, forcing many farmers out of business.
  Wages there have decreased by as much as 20
  percent in some sectors.
• Jobs lose!!!!!!

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List of multinational corporations

• British Petroleum
• The Coca-Cola Company
• DaimlerChrysler AG
• General Electric
• Honda Motor Company
• International Business Machines
• McDonalds Corporation
• Microsoft Corporation

• Nintendo Company, Limited
• Intel Corporation
• Nokia Corporation
• Siemens AG
• Sony Corporation
• Texas Instruments
• Toyota Motor Corporation
• Wal-Mart Stores, Inc

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Why such divergent views?

• NAFTA was a radical experiment - never before had
  a merger of three nations with such radically
  different levels of development been attempted.
  Plus, until NAFTA, trade agreements only dealt
  with cutting tariffs and lifting quotas to set
  the terms of trade in goods between countries.
  But NAFTA contained 900 pages of
  one-size-fits-all rules to which each nation was
  required to conform all of its domestic laws -
  regardless of whether voters and their
  democratically-elected representatives had
  previously rejected the very same policies in
  Congress, state legislatures or city councils.
• http//www.citizen.org/trade/nafta/

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NAFTA A Treaty, a Foundation, a Past, a
Future...Stories of the Week - June 23, 2003

• http//www.dfait-maeci.gc.ca/nafta-alena/stories64
  -en.asp
• Some ten years later, trade between Canada, the
  United States and Mexico is faring quite well.
  Trade in goods and services between Canada and
  the United States is worth around 2 billion per
  day.
• Similarly, Canadian exports to Mexico have
  doubled and imports of Mexican products to Canada
  have tripled during this time.
• NAFTA has definitely helped raise the quality of
  life of Canadians and created business
  opportunities for Canadian companies in the
  United States and Mexico.
• What is more, NAFTA has proven its value as a
  means of stimulating trade, investment and
  competitiveness. We now have an opportunity to
  replicate the success of the NAFTA, this time in
  a hemispheric context, through the Free Trade
  Area of the Americas (FTAA).

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Revisiting NAFTAStill not working for North
America's workers

• http//www.epi.org/content.cfm/bp173
• As a former foreign minister of Mexico once
  remarked, NAFTA was an agreement for the rich
  and powerful in the United States, Mexico, and
  Canada, an agreement effectively excluding
  ordinary people in all three societies. It
  should, therefore, be no surprise that NAFTA
  rules protect the interests of large corporate
  investors while undercutting workers rights,
  environmental protections, and democratic
  accountability.
• Twelve years later, it is clear that the costs to
  workers outweighed the benefits in all three
  nations.
• Americans were promised that NAFTA would generate
  large numbers of net new good jobs. Instead, over
  a million jobs that would otherwise have been
  created were lost, and wages were pressured
  downward for a large number of workers with less
  than a college education.
• Mexican employment did increase, but much of it
  in low-wage maquiladora industries, which the
  promoters of NAFTA promised would disappear. The
  agricultural sector was devastated

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The U.S Mexico is divided by large geographical
features.

• Water sources
• Topography
• Climate
• The U.S/Mexico border is the longest border in
  the world that divides a developed country and an
  undeveloped country.
• Developed
• Undeveloped

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Identify problems that exist between the U.S.
(especially Texas) Mexico.

• Illegal immigration
• Overpopulation
• Poverty
• Debt
• Low income
• Discrimination
• Language barrier
• Value of peso compared to the dollar

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Mexico U.S. Facts

• Minimum wage law prevents industries from hiring
  good workers for less then 5.15.
• Other company will hire cheaper labor to create
  good products that cost less.
• Cannot hire illegal workers. Cannot pay them less
  than minimum wage.
• Large labor pool in Mexico not accessible due to
  a Mexican regulation that prevents full ownership
  of a company if located in Mexico.

• 21 million people live in Mexico City. Largest
  city in the world.
• Problems water supply, garbage disposal, sewage,
  fire protection, air pollution, housing, etc.
• Debt. over 100 billion
• 85 million Mexicans are under age 16.
• High unemployment in Mexico.
• Fraud corruption in politics business.

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Wages of the U.S.

• Green States with minimum wage rates higher
  than the Federal
•  Yellow States with no minimum wage law Blue
  States with minimum wage rates the same as the
  Federal
•  Red States with minimum wage rates lower than
  the Federal American Samoa has special minimum
  wage rates 

•  

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What can Mexico do to

• Provide jobs for its own citizens?
• Think about some of the problems that we discuss.
• How would you satisfy the U.S. private
  industries great demand for good, but cheap,
  labor.

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