NAFTA (N

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AMERIC

AN FREE

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BY TA

NVI PARMAR Tratado de Libre

Comercio de América del Norte

Accord de Libre-échange Nord-Américain

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

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 country’s 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)

PURPOSEOutlined 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 NAFTA’s benefits

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

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

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

farmproducts)-wages are suppressed (threaten to send jobs away)-maquiladora workers are exploited-environment destroyed (pressure to compete usechemicals)

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

INTERNATIONAL IMPACT- CANADA

-Canada’s 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 Canada’s attractiveness to foreign investors

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

WORK CITEDInformation:

-The NAFTA's Impact." Foreign Affairs and International Trade Canada. n. page.

Web. <http://www.international.gc.ca/trade-agreements-accords-

commerciaux/agr-acc/nafta-alena/nafta5_section04

.aspx?lang=en&view=d>.

-NAFTA Secretariat. n. page. Web. <http://www.nafta-sec-alena.org/en/view.aspx?x=202>.

-Amadeo, Kimberly. "History of NAFTA." About.com. n. page. Web. 24 Mar. 2012. <http://useconomy.about.com/od/tradepolicy/p/NAFTA_History.htm>.

-Amadeo, Kimberly. "Disadvantages of NAFTA." About.com. n. page. Web. 24 Mar. 2012. <http://useconomy.about.com/od/tradepolicy/p/NAFTA_History.htm>.

-Amadeo, Kimberly. "Advantages of NAFTA." About.com. n. page. Web. 24 Mar. 2012. <http://useconomy.about.com/od/tradepolicy/p/NAFTA_History.htm>.

WORK CITED:Pictures:

-http://www.fas.usda.gov/itp/policy/nafta/NAFTA_logosmall.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/nafta-signing-ceremony

federal-photo/image_preview

-http://graphics8.nytimes.com/images/2009/03/24/business/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-world-factbook/graphics/flags/large/ca

lgflag.gif

-https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/us-lgflag.gif