Final Paper-Global Trade Compliance

8/18/2019 Final Paper-Global Trade Compliance

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Global Trade: NAFTA Group Six

Global Trade: NAFTA

OL 615: Leadership Across Boundaries

March, 2016

Group Six:Julie Bauman

Danielle DesrosiersRichard Goddard

a!ie Ludo"icoMar# $cacce!!iDh%ani! $hah

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&n a 'lo(ali)ed %orld, doin' (usiness %i!h di**eren! coun!ries is ine"i!a(le and o*!en

una"oida(le+ o%e"er, since each coun!r# has i!s o%n se!s o* la%s 'o"ernin' !he impor! and

e-por! o* 'oods i! can o*!en!imes (e cos!l# !o do (usiness %i!h *orei'n coun!ries , . e"en #our

closes! nei'h(ors /+ On paper, *ree !rade a'reemen!s seem !o (e a lo'ical s!ep+ &! crea!es incen!i"es

!o do (usiness %i!h nei'h(orin' coun!ries as opposed !o searchin' else%here *or !he same 'oods+

As %e %ill demons!ra!e in !his essa#, no! all !rade a'reemen!s accomplish !he 'oals !he#

ori'inall# se! ou! !o achie"e, nor do !he# al%a#s ac! in !he (es! in!eres! o* !he local (usinesses or

%or ers+ rade a'reemen!s o*!en ha"e a ne'a!i"e side !ha! ma# in"ol"e in"ol"es ille'al

immi'ra!ion, loss o* indus!r#, %ea ened economies, and !rade de*ici!s+

3ree !rade a'reemen!s are no!hin' ne% in !he %orld o* 'lo(al economics4 as allies %an!

!o increase !rade and help relie"e some o* !he (urdens o* cus!oms du!ies and *ees *or uali*#in'

produc!s+ A3 A, or !he or!h American 3ree rade Ac!, is a massi"e !rade a'reemen! !ha! %as

si'ned in!o la% in Decem(er, 1778 %i!h an e**ec!i"e da!e o* Januar# 1, 1779+ his !rade

a'reemen! %ould open (orders (e!%een !he coun!ries in or!h America, %hich include anada,

!he ;ni!ed $!a!es, and Me-ico+ oined !he GA .General A'reemen! o* ari**s and rade/+ B# (ecomin' a mem(er o* GA ,

!he Me-icanMe-ico@s =residen!, Mi'uel de la Madrid ur!ado, %as reducin' %an!ed !o reduce

!rade (arriers and compl# in' %i!h in!erna!ional !rade s!andards+ is successor, arlos $alinas de

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Gor!ari, con!inued !al s %i!h !he ;+$+ and anada in *ormin' a !rade a'reemen!+ arlos $alinas

ran on !he pla!*orm !o moderni)e Me-ico and re*orm !he coun!r#@s ou!da!ed policies and

procedures+ is 'oal %as !o upda!e Me-ico: s!a(ili)e !he econom#, reduce dru' rela!ed crime

and !o indus!riali)e !he coun!r#+

B# Au'us! o* 1772, !he !hree coun!ries announced !he crea!ion o* a *ree !rade )one !he

or!h American 3ree rade A'reemen!4 or o!her%ise no%n as A3 A+ his a'reemen! %as !he

lar'es! !rila!eral a'reemen! in !he %orld+ o%e"er, !here %ere di**erin' opinions on !he his!orical

a'reemen!+ Man# !hou'h! i! %ould open (orders, ma in' !rade simpler *or !he or!h American

coun!ries, %hile o!hers %ere concerned %i!h ho% i! %ould ul!ima!el# pla# ou! . Ross Perot

prophesied a “giant sucking sound” as U.S. obs !ould "o#e south. $%udis& '(()* rade

$ecre!s: he Real =ro(lem %i!h A3 A . arne'ie Cndo%men! *or &n!erna!ional =eace/ John

Judis April 7, 200 pa'e 2 ;n*or!una!el#, !here are some ideas !ha! ma# seem e-cellen! %hen

%ri!!en on paper, (u! in reali!# !he# can (e disas!rous+ A3 A has pro"en !o (e much di**eren!

in prac!ice !han i! %as in !heor#+

3rom !he onse! o* !he ne'o!ia!ions, !he Me-ican people %ere concerned !ha! !he ;ni!ed

$!a!es %ould use i!s posi!ion o* po%er !o domina!e !he !rade !al s and 'ain an upper hand+ o!

e"er#one %as immedia!el# pleased %i!h !he si'nin' o* !he A3 A !rea!#+ “+ne group that sa!

"uch o, this co"ing !as the indigenous people in the -e ican state o, /hiapas. +n the

sa"e da0 NAFTA !ent into e,,ect& on %anuar0 1 st& 1223& the0 oined the 4apatista National

5iberation Ar"0& or 645N& in declaring !ar on the -e ican go#ern"ent& sa0ing that

NAFTA "eant death to indigenous peoples. The0 took o#er ,i#e "a or to!ns in /hiapas&

!ith ,ull0 ar"ed !o"en and "en. The uprising !as a shock& e#en ,or those& !ho ,or 0ears&

!orked in the #er0 co""unities !here the rebel ar"0 had been secretl0

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organi7ing.”$8allach& '(13*. &n!er"ie% !ranscrip!ion %i!h Lori o(s in !he

;ni!ed $!a!es due !o A3 A and !he d#s*unc!ional la(or condi!ions , (u! sou!h o* !he (order, in

Me-ico, A3 A had !rul# cu! a pa!h o* des!ruc!ion+

=residen! lin!on had ori'inall# promised !ha! 200,000 >o(s %ould (e crea!ed (# 1775+

“Not onl0 ha#en9t the pro"ises "ade b0 its proponents co"e true& but in "ost instances

the actual opposite occurred. For instance& in no 0ear o, NAFTA !ere '((&((( obs created.

Rather& no! t!ent0 0ears out& one "illion net U.S. obs ha#e been lost to the gro!ing trade

de,icit !ith -e ico and /anada under NAFTA E .8allach& '(13*. &n!er"ie% !ranscrip!ion

%i!h Lori


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include: "otor #ehicles& te tiles& co"puters& and electrical appliances + $Scott& '(( * + do %e

ha"e an e-ac! uo!e *or !his

o%e"er, n o! all *ac!ories mo"ed sou!h o* !he (order+ here %ere some companies %ho

s!a#ed in !he ; +$+ Durin' !his !ime, unions s!ar!ed or'ani)in' dri"es !o represen! !he *ac!or#

%or ers+ his pushed !he corpora!ions !o *i'h! (ac and 'i"e !he %or *orce !he choice: union or

s!a# %i!h !he *ac!or#+ he %or ers chose !he *ac!or# and !hen %i!hou! !he union (ac in' !hem,

!he# los! !heir (ar'ainin' po%er+ Be!%een !he loss o* !he union and !he compe!i!ion %i!h

manu*ac!urin' plan!s !ha! %ere in Me-ico, !here %as suppression in %a'e 'ro%!h+ Durin' !he

mid 1770@s, *i*!# percen! o* all indus!rial companies !ha! planned !o mo"e !o Me-ico used !he

!hrea! o* union or close !he *ac!or#@+ B# !he end o* !he !%en!ie!h cen!ur#, !ha! ra!e had 'ro%n !o

si-!# *i"e percen!+ .do %e ha"e a uo!e *or !hose *i'ures / his is an online ar!icle+ & canno! *ind

an#%here !here is a las! name+ &! is %ha! is also ci!ed (elo%: he Cconomis!, ari** and or!illas+

he lin is: h!!p:??%%%+economis!+com?prin!edi!ion?200 01 26 i* #ou can !r# and *ind an

au!hor@s las! name+

he Me-ican *armers also !oo one o* !he (i''es! hi!s a*!er !he !rea!# %as enac!ed + orn

and o!her 'rains %ere no% a(le !o (e e-por!ed *rom !he ;ni!ed $!a!es !o Me-ico a! a reduced

cos!, and !he rural Me-ican *armers could no! compe!e %i!h %ha! !he American *armers could

impor!, %hich caused des!ruc!ion !o !he Me-ican a'ricul!ural indus!r#+ A! !he !%en!# #ear

anni"ersar# o* A3 A, !he su(sidies !o Me-ican *armers %en! *rom 88+2H !o 18+2H4 mos! o*

%hich %as !o !he lar'e *arms and no! !he small, rural *armer and a loss o* 1+8 million *arm >o(s

. he Cconomis!, ari**s and or!illas, Januar# 29, 200 / chan'e !o .las! name, 200 /+ : $ee a(o"e

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http://www.economist.com/printedition/2008-01-26http://www.economist.com/printedition/2008-01-26


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he small *arms o* an# na!ion are o*!en !he (ac (one o* !he a'ricul!ural indus!r# o* !ha!

area+ O*!en !hese small *arms *eed !he *amilies o* !he *armers and !heir communi!ies+ he li!!le

!he *armers ma e in sales is %ha! suppor!s !heir *amil# and Me-ican a'ricul!ure is no di**eren!+


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1760s, (u! !he# ha"e (een increasin' in num(ers since !he 1770s and can (e lin ed !o !he !rade

a'reemen!+


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o* ho% rapidl# our na!ion %as losin' >o(s, “8e ha#e 1&?(( "e"ber co"panies& and < can9t

re"e"ber the last ti"e an0one "entioned -e ico as a proble". /hina is the "ain

proble"” $%udis& '(()*. rade $ecre!s: he Real =ro(lem %i!h A3 A . arne'ie Cndo%men!

*or &n!erna!ional =eace/ John Judis April 7, 200 pa'e 2 o(s %as no% on

!he (ac (urner , (u! ne"er!heless !he ; +$+ losin' >o(s !o *orei'n compe!i!ion is s!ill a ma>or

concern+

Glo(ali)a!ion %as causin' a race !o !he (o!!om in an unpreceden!ed %a# and a*!er 2001 i!

(ecame easier *or ; +$+ companies !o 'e!ac uire cheap la(or and manu*ac!ure 'oods in hina

despi!e !he (ene*i!s o* i!s nei'h(or Me-ico and A3 A+ A3 A %as losin' an# ind o* pull i!

had !o eep (usiness in !he Americas un!il recen! #ears+ Due !o indus!riali)a!ion and

moderni)a!ion in hina, !heir *ac!or# ra!es ha"e had !o increase, %hich is causin' some o* !he

(usiness !o re!urn !o Me-ico *rom Asia+

&! is clear !ha! A3 A did no! ha"e !he o"erall success !ha! had (een an!icipa!ed %hen i!

%as si'ned in!o la% !ha! Decem(er da# in 1778+ &! is a hun'r# mons!er !ha! is con!inuin' !o

'ro% ou! o* con!rol, de"ourin' !he ci!i)ens o* or!h America, %i!h a special !as!e *or !he poor,

especiall# !hose in Me-ico+ $o %hen discussions came up *or a 3 AA, 3ree rade Area o* !he

Americas, %hich %ould include (o!h American con!inen!s . or!h and $ou!h Americas/, !he

people o* $ou!h America %ere ou!ra'ed+ he 'o"ernmen!s o* Bra)il, Iene)uela, and Ar'en!ina

%ere e# par!ners in *i'h!in' !he appro"al o* 3 AA+ B# 2005, !he opposi!ion %on and !he 3 AA

*ailed+ .Dello Buono and De La Barra+ 2015/ %here does !his uo!e (e'in or did %e 'enerall#

s!a!e !he ac!ual uo!e

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A3 A . en!ral America 3ree rade Area/ %as !he ne-! !rade a'reemen! !ha! !he ;+$+

!ried !o pu! in!o e**ec!+ A3 A %ould include !he coun!ries o* Gua!emala, onduras,

icara'ua, Cl $al"ador, and os!a Rica+ he 'o"ernmen!s o* !he en!ral American coun!ries

ne% !ha! i* %ord 'o! ou! re'ardin' !he !rade a'reemen! !al s, !here %ould (e an uprisin' o*

opposi!ion+ here*ore, all !he discussions %ere done in pri"a!e+ urren!l#, !he Dominican

Repu(lic has (een added !o !he 3ree rade Area and !he a'reemen! is no% called !he A3 A

DR+ his !rade a'reemen! no! onl# promo!es relie* *rom du!ies and *ees, (u! i! also promo!es

made in AmericaE produc!s and eepin' la(or %i!hin !he Americas+

&n 2006,


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appallin' la(or and human ri'h!s !ha! %ere happenin' in olum(ia and !he# re*used !o si'n

ano!her a'reemen!+ &n 200 , durin' !he presiden!ial campai'n, !%o candida!es %ere "ehemen!l#

opposed !o !he ;+$+ olum(ia *ree !rade a'reemen! and also s!a!ed !ha! !he# %ould rene'o!ia!e

!he ori'inal A3 A+ &! %as onl# !hree #ears la!er %hen !he $ecre!ar# o* $!a!e did !he e-ac!

opposi!e o* %ha! %as said %ould (e done and !he ori'inal A3 A %as ne"er re!ouched+ ;sin'

!he *as! !rac au!hori!#, !he ;+$+ olum(ia *ree !rade a'reemen! %as appro"ed alon' %i!h *ree

!rade a'reemen!s %i!h =anama and $ou!h orea+ 3as! !rac au!hori!# allo%s !he =residen! !o

su(mi! !rade a'reemen!s !o on'ress %i!hou! 'i"in' !he mem(ers !he chance !o amend !he pac!+

is!or# has pro"en !ha! !hese uic !o mar e! deals o* !rade and in"es!men! !#picall# resul! indecreases in !he >o( mar e!s and decreased %a'e oppor!uni!ies+

here are coun!less e-amples o* ho% *ree !rade a'reemen!s ha"e (een de!rimen!al !o !he

American %or er+ o%e"er, !here ha"e (een o!her 'lo(al economic impac!s !ha! ha"e also

ne'a!i"el# a**ec!ed !he American %or er+ Be!%een 177K and 2019, more !han *i"e million ;+$+

manu*ac!urin' >o(s %ere los!+ he ma>ori!# o* !hese >o( losses %ere *rom !he consis!en!l#

'ro%in' !rade de*ici!s %i!h coun!ries !ha! ha"e a'reed !o !rade and in"es!men! deals %i!h !he ;+$+

hese de*ici!s are de!ermined (# !he num(er o* >o(s crea!ed or displaced (# !rade a'reemen!s

and in e"er# sin'le a'reemen!, !he ;+$+ impor!s more !han i! e-por!s, lea"in' America in !he

ne'a!i"e+ his de*ici! can (e (rou'h! (ac !o !he closin' o* plan!s and loss o* American

manu*ac!urin' >o(s in !he 1770s+

Glo(ali)a!ion has increased %a'e and income ine uali!# and con!inues !o s!eadil# 'e!

%orse+ here are !%o reasons %h# 'lo(ali)a!ion o* !rade has (een !he cause o* %a'e decrease in

!he ;+$+ One is !he 'ro%in' !rade de*ici! %i!h hina, in addi!ion !o Me-ico and o!her coun!ries+

he ;$ impor!s more 'oods !han i! e-por!s, %hich can (e seen in !he lac o* manu*ac!urin'

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plan!s %i!hin !he ;ni!ed $!a!es+ he second reason is !he chan'e in composi!ion o* >o(s in a %a#

!ha! reduces !he %a'e o* a *ull !ime American %or er (# an a"era'e o* 1 , 00 annuall# $Scott&

'(1?*.

$i*!in' !hrou'h !he num(ers, s!a!is!ics, and pro>ec!ed da!a i!ems seems li e i! is *ull o*

doom and 'loom, (u! all is no! los!+ &* !he 'o"ernmen! decides !o %or !o'e!her, ins!ead o*

a'ains! one ano!her, (# usin' !ac!ics such as a *as! !rac !o 'e! around on'ress4 !here %ould (e

hope !o *inali)e ne'o!ia!ions re'ardin' 'lo(ali)a!ion and a'ree on %a#s !o end Asia@s currenc#

manipula!ion+ he *ederal a'encies, such as !he reasur# and 3ederal Reser"e ha"e !he au!hori!#

!he# need !o o**se! purchase o* *orei'n asse!s (# o!her 'o"ernmen!s+ &* !he# mo"ed !o%ards !his

'oal, !he ;+$+ 'o"ernmen! could ma e an a!!emp! !o s!op *orei'n 'o"ernmen!s *rom in*luencin'

!heir currencies+

Re"isi!in' A3 A, !he mons!er *ailure !ha! i! is, ins!ead o* con!inuin' !o ma e !he same

mis!a e o"er and o"er a'ain %i!h o!her 'o"ernmen!s, is also pi"o!al in sol"in' !he pro(lems !ha!

%e ha"e and mo"in' !o%ards a uni*ied 'lo(al !rade+ he Curopean ;nion had 'rea! success %i!h

!heir !rade a'reemen!+ $pain, =or!u'al, and Greece %ere su**erin' and !he union s!epped in %i!h

ne'o!ia!ions !ha! %ould (ene*i! all par!ies, and no! >us! simpl# !he union+ he C; is no% *ormin'

rela!ions %i!h !he coun!ries o* Cas!ern Curope and usin' similar !ac!ics and !emporar#

pro!ec!ions as i! did *or $pain, =or!u'al, and Greece+ B# up'radin' !heir economies, educa!ional

s#s!ems, and road%a#s, !he# made !hese coun!ries success*ul and a(le !o s!and on !heir o%n+

rade a'reemen!s and !ari** la%s are al%a#s chan'in' and (ein' ree"alua!ed (# ; +$+ and

*orei'n 'o"ernmen!s+ Jus! se"eral da#s a'o, =residen! O(ama si'ned a (ill !o close a loophole in

!ari** la% !ha! allo%ed !he ;$ !o impor! 'oods produced (# sla"e la(or o"erseas+ learl# !he

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'oals are !o help e"er#one (ene*i! *rom a 'lo(ali)ed %orld+ “U.S. polic0 should re,lect the

reali7ation that trade& labor& and i""igration are interrelated& and that trade agree"ents

should incorporate serious;"inded econo"ic& social& and en#iron"ental

ele"ents.”$-acke0& '(1 *. Racin' !o !he Bo!!om


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RC3CRC C$:

Me-ico@s or!h is Clec!ion Ba!!le*ieldE h!!p:??%%%+n#!imes+com?17 ?06?80?%orld?me-ico s

nor!h is elec!ion (a!!le*ield+h!ml rre* collec!ionH23!imes!opicH23$alinasH20DeH20Gor!ari

H2

H20 arlosNac!ion clic Ncon!en! ollec!ion !imes!opicsNre'ion s!reamNmodule s!ream uni!

N"ersion la!es!Ncon!en!=lacemen! 10Np'!#pe collec!ion

h!!p:??%%%+economis!+com?ne%s?(usiness?215 8K0 50 #ear old e-por! indus!r# pro"ides

millions >o(s has rein"en! i!sel* uic l#

h!!ps:??us!r+'o"?!rade a'reemen!s

“Federal officials are preparing to enforce an 86-year-old ban on importing goods made by

children or slaves under new provisions of a law signed by President Barack Obama

h!!p:??%%%+usne%s+com?ne%s?us?ar!icles?2016 02 29?o(ama (ans us impor!s o* sla"e produced

'oods

h!!ps:??us!r+'o"?!pp?

h!!ps:??us!r+'o"?!!ip

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Final Paper-Global Trade Compliance

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