...implemented the North American Free Trade Agreement (NAFTA), forming the largest free trade zone in the world. The goal of NAFTA is to create better trading conditions through tariff reduction, removal of investment barriers, and improvement of intellectual property protection. NAFTA continues to gradually reduce tariffs on set dates and aims to eliminate all tariffs by the year 2004. Before NAFTA was established, investing in Mexico was a difficult process. Investors needed the Mexican Government's approval and were also required to meet specific investment guidelines. These requirements necessitated investors to export a set level of goods and services, utilize domestic goods and services, and transfer technology to competitors. Under NAFTA, investors no longer need government approval to invest and are treated as domestic investors. NAFTA has also increased intellectual property rights and allowed companies to obtain patents in Mexico and Canada. In the past, companies were hesitant to export research and development intensive goods; with increased intellectual property protection, however, exports of these goods have shown a definite increase. As a result of better trading conditions, exports and imports of most other goods have increased along with the research and development intensive goods. In Mexico, the elimination of investment barriers has allowed investment to expand. Increased trading and investment has then created many jobs, raised the Gross Domestic Product, and lowered...
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...The Northern America Free Trade Agreement or otherwise known as NAFTA is a trade agreement between the United States, Canada and Mexico implemented in the early 1990s. The goal of NAFTA was to eliminate tariff barriers between the three Northern American countries in hopes to promote free trade and a stimulation in economic growth. Based on the economy of each country before and after NAFTA, it is fair to conclude that NAFTA was an overall successful because of the changes economically and socially to each country. Opposition to NAFTA during the early 1990s when its approval was in debate, voiced many concerns on how NAFTA would ultimately create problems economically, socially, and environmentally. Before NAFTA the United States was closely...
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...International business Fall 2012 NAFTA stands for North America Free Trade Agreement, and it was signed by Canada, Mexico, and the United States and went into effect on January 1, 1994. The basic purpose of NAFTA is to promote free trade by eliminating tariffs among the three countries. As related to GDP, it is the largest trading bloc in the world. NAFTA has two other parts: the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC). NAFTA was created to eliminate trade barriers and increase investment among the US, Canada, and Mexico, especially between Mexico and the United States. When NAFTA was implemented, tariffs on more than half of the tariffs on exports from Mexico to the US and one third of the tariffs from US exports to Mexico were immediately eliminated. Within ten years of 1994, almost all but a few agricultural US-Mexico tariffs were to be eliminated, and within 15 years all tariffs were to be eliminated. The real change of NAFTA was with Mexico, as most US-Canada trade had already been tariff free when NAFTA was passed. From the beginning NAFTA has been controversial, and there have been several studies about the effect of NAFTA, including studies done by the World Bank, and the Institute for International Economics. Assessing the effect of NAFTA is quite difficult, as the world economy and the economy of single nations are quite complex...
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...Slide 1: Title In January 1994 there was a new development; the North American Free Trade Agreement (NAFTA) was instituted between the United States, Mexico, and Canada creating the largest free trade area and richest market in the world. This one of the most important and wide-reaching treaties in the world. A treaty between Canada, Mexico, and the United States that was designed to foster greater trade between the three countries. It was one of interesting prospect and looked upon as the start of globalization. The attempt was to help with financial situations involving the all countries in the North American continent, especially those of United States, Mexico, and Canada. One major problem encountered were the economic stabilities of each country, especially in Mexico. There were issues of foreign debt, balance of payment problems, and exchange rate fluctuations. The agreement does well to commit to standards on environmental protection and labor laws but still strives to enforce those laws. The agreement did have some goals to help foster the partnerships between the countries. First and foremost to reduce trade barriers. These barriers cause imports to be of a higher priced than local goods. The object of the agreement was to participate in free" or "open" when goods and services can move into markets without restrictions, and prices are determined by supply and demand. Nations sometimes erect barriers to this free movement of goods and services, such...
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...NAME: REG NO: UNIT: TASK: LECTURER: UNIVERSITY: NAFTA (North America Free Trade Agreement) whose source credited to Information Trade Center in US through the Department of Commerce implemented in 1994.Usually, comprehensive trade agreement improves almost all aspects of transacting businesses within North America.NAFTA removes almost all tariffs between the US and Canada and removes many of the non-tariff barriers for instance import licenses. The latter has helped in exclusion of U.S. goods from other two markets and mostly Mexico.NAFTA ensures that investment won’t be forced by restrictive government policies such as U.S. investors receiving treatment that is equal to domestic investors in both Canada and Mexico. More so, NAFTA ensures that if U.S. happens not to invest in another country, they are usually set free and granted the freedom not to.NAFTA also provides for guaranteed access to lucrative government procurement contracts in Canada and Mexico.NAFTA destroys American Sovereignty via the creation of supranational panels and commissions. It also castigates courts by infringing on and overriding their jurisdiction as well as giving no stand to seek state redress. Since the implementation of the unconstitutional NAFTA, America has tremendously lost several hundreds of thousands of jobs. Generally has led to the loss of jobs rather than creating jobs as was expected. (Mace, G. (2007). CAFTA (Central American Free Trade Agreement), free trade agreement or treaty...
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...the nature of NAFTA and its effect on regional integration as well as state economies from several perspectives. In 1993, the United States, Canada and Mexico signed the North American Free Trade Agreement to achieve the higher level of regional integration. This NAFTA not only concerns the removal of trade barriers, but also aims to promote the movement of capital. Firstly, this essay will explain the evolution of NAFTA and its successful influence on economic integration. Furthermore, this chapter will provide the criticism on the influence of NAFTA. Secondly, this study will discuss the impact of NAFTA on regional integration, particularly economic integration. Then, this essay will propose the understandings on the effect of NAFTA on members’ economies and businesses from four perspectives, including trade, economic growth, employment and FDI. Main body The Evolution of NAFTA The North American Free Trade Agreement (NAFTA) issued in 1993 aims to removal trade barriers and liberalise economics and business among the United States, Canada and Mexico. Compared with similar FTA economic relationship, such as EU, NAFTA is described as the most implemented FTA (Orme, 1996). Like most FTAs, NAFTA not only effectively coordinates resource and improves competitiveness of countries and corporates, but also promotes the movement of products, services and investment, even financial integration. For instance, Krugman & Hanson (1993) stress that the implementation of NAFTA can facilitate...
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...Regional Integration against Articles Christian Frisina MGT448 April 16, 2012 Greg Worden NAFTA, stands for North American Free Trade Agreement but who does it represent and what does it accomplish and who does it affect. NAFTA is a union of sorts that links Canada, the United States and Mexico together. The disadvantages of this agreement are diverse and, not purposefully intended. Being knowledgeable of how these pertain to the people will be for reference only because any disagreement can be preventatively fixed or can be fixed through future renegotiations. NAFTA was designed with great intentions in mind but has had severe issues with follow through and consistency. As fair as NAFTA was intended, the agreement did not consider future issues with employment, the environment and pollutants, and other country dependencies upon each other. Concerning employment for Canadian citizens, with the joining of NAFTA Canadian jobs will be lost when plants and factories start to move to the United States. NAFTA promised employment increases to every country within, yet it has slowly dwindled over the years. Instead of increasing, Canada has lost 398, 837 jobs ever since NAFTA began, from 1994 to 2001 ("Why Is Nafta Bad For Canada?", 2008). Another serious concern is the fact that the environment is being destroyed at an alarming rate becoming toxic waste dumps. This is mainly due to weaker countries with weaker environmental laws being taken...
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...affect between America, Mexico and Canada. This was known as the North American Free Trade Agreement (NAFTA). This removed all barriers to the trade of goods and services within the member countries, the protection of intellectual property rights, application of national environmental standards and the establishment of two commissions with power to impose fines and remove trade privileges when such standards are ignored involving the environment, health and safety, wages and child labour (Hill, 2005). There is a belief that agreements designed to promote free trade within regions will benefit trade for all the countries involved, and also the rest of the world (Abbott and Moran, 2002). While regional economic integration, or foreign direct investment, is seen as a good thing, some observers worry that it could lead to a world in which regional trade blocs compete against each other. We are seeing the formation of many trading blocs continuing today as the need for it has become essential for countries and their firms to compete in the global market place (Seid, 2002). Although this is the case, each bloc will also protect its market from outside competition with high tariffs, with each member determining its own trade policies to non-members (Gereffi et. al, 2002). With all this in mind the following will address the NAFTA agreement with issues arising about job gains and job losses in different areas, whether regional economic integration is a good thing or a...
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...In analyzing the free trade market there have been several agreements that have been put in place to ensure that there is fair trading among countries. This is necessary in order to ensure that there is a balance between the supply and demand in all markets. It would not be fair for the countries that are powerful on an economic and political level to dominate the market, which would impact the countries that poorer than others. There is constant talks and meetings about free trade agreements in several markets and free trade zone. Most countries are tying to facilitate free trade on a international level, which is never a easy task because there are so many facets of the agreements that have to be addressed. There are many theories that exist that make the thought process simple of implementing free trade agreements but when you think about the principles and how it will affect society, the environment and multiple societies around the world. By encouraging free trade this is the first step towards positive development for all countries. Since the FTA was put in placed there has been a balance, which has curved unethical and illegal practices. It is very important to foster the right relationship between countries, to ensure not only economic growth and national security among foreign countries and trading. Free trade areas (FTA) are agreements where two or more countries eliminate trade barriers and tariffs between goods traded amongst the countries. Started after the end...
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...NAFTA is a short form of North America Free Trade Agreement. It’s an economic agreement between the United States, Canada and Mexico. NAFTA also beget one of the world’s biggest free trade areas by bringing together two of the world’s richest countries; United States and Canada and Mexico which is a less developed country. Its main aim was to lower the costs which are incurred during trading, also to make an increase of investments in the business and to assist the North America to be very competitive in market. NAFTA was also made to eliminate some of the barriers that are put in place to the manufacturing, to the agricultural and to the services (Buono, 2013). Also, was to remove various restrictions that are put in place in investment and...
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...Abstract This paper examines the impact of NAFTA on trade as well as migration flows between Mexico, Canada, and the United States in the textile industry. Several questions are being investigated: Why did many textile jobs apparently migrate out of the United States in the years after the establishment of NAFTA? Who gained and lost from the process of readjustment in the textile industry after NAFTA? The act whether to protect or not to protect the textile industry when a free trade agreements? The findings show that the migration of many textile jobs out, mostly Mexico was mainly due to a cheaper and enhanced plants included with a flood of cheap labour compared to the United States. Certain quarters like the people of Mexico, people of the United States, apparel companies, and etc both benefits and lost at the same time. The impact on long-term trends were noticeable, while the short-run impact is more difficult to assess due to competing factors such as changes in business cycle patterns, immigration laws, economical climate, weather conditions, and exchange rate movements. Finally, there is the idea that protecting the textile industry from painful free trade agreement is not a perfect solution, bringing a solid and positive outcome to many with only a little much to sacrifice for the betterment of the countries’ wealth and dependency. Introduction The first major international trade agreement in the world was the General Agreement on Tariffs and Trade (GATT) formed in...
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... 1. NAFTA stands for the North American Free Trade Agreement. It is a treaty between Canada, Mexico, and the United States. The agreement was created to increase trade between the three countries by reducing trade restrictions. It was designed to help the nations grow economically. NAFTA has benefited our job market substantially. It increased our exports and imports, created better paying jobs for many Americans, and improved home and community conditions economically. 2. Job loss obviously has a huge effect on an individual and a community. Losing a job affects the income of the person who is no longer working, which is normally the adult of a household. This doesn’t only affect that one person, it affects everyone that they supply care for. Unemployment will bring high amounts of stress to the person who lost their job. Children look up to their parents for emotional help, if the parent is having an emotional disaster, it will greatly affect the child. A parent may feel overwhelmed with everything going on with job loss and not be able to take care of their child the correct way, whether that includes making house payments and putting food on the table for the kids. Job loss also affects the community that you live in. If someone was an active volunteer or participant in their community, losing their job may change their motivation. They aren’t going to want to volunteer in their community when they can’t even work to bring and income in for themselves. 3. Job loss...
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...rules were replaced by NAFTA rules of origin. They differ in the respect that they are much clearer and predictable than those of the FTA. Similar to the FTA each member country of NAFTA is able to keep in use its own external market tariff. This external tariff can be in the form of a most favoured nation (MFN) tariff in which the NAFTA would extend only to good that have originated in a NAFTA member country. In contrast to the FTA, the NAFTA provides specific preferential tariff treatment for not only some but ALL North American goods traded across Canadian, U.S. and Mexican borders. The rules of origin in the NAFTA are specifically used to determine the credibility of whether or not a product can be declared as originating in North America. In addition, NAFTA rules of origin strictly ensure that the benefits are available only to those good which meet specific rules of transformation. Specifically for apparel the NFTA provides more stringent rules of origin compared to the FTA. In contrast to the FTA the NFTA requires that the yarn, fabric and garment in ALL be made in North America in order to meet specific rules of origin that qualify them for NAFA preferential duties. Therefore any goods from all three NAFTA member countries that are wholly sourced or manufactured in the three countries are deemed originating goods that are entitles to preferential tariff treatment. In instances where the inputs used in production are imported from outside the NAFTA, they must be processed...
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...Regional Economic Integration Learning objectives • Be able to explain the different levels of regional economic integration. • Understand the economic and political arguments for regional economic integration. • Understand the economic and political arguments against regional economic integration. • Be familiar with the history, current scope, and future prospects of the world’s most important regional economic agreements. • Understand the implications for business that are inherent in regional economic integrations agreements. This chapter discusses regional economic integration, agreements among countries within a geographic region to achieve economic gains from the free flow of trade and investment among themselves. There are five levels of economic integration. In order of increasing integration, they include free trade area, customs union, common market, economic union, and full political union. Integration is not easily achieved or sustained. Although integration brings benefits to the majority, it is never without costs for the minority. Concerns over sovereignty often slow or stop integration attempts. The creation of single markets in the EU and North America means that many markets that were formerly protected from foreign competition are now more open. This creates major investment and export opportunities for firms within and outside these regions. The free movement of goods across borders...
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...Trade Agreement? Which sectors would you expect to gain most from this agreement? NAFTA allowed for the free flow of goods and services between the three parties, US, Mexico and Canada by immediate or phased elimination of tariffs on numerous goods. This free trade would in turn lead to comparative advantage i.e. each country could specialize in producing goods/ services in which they are relatively more productive than their trading partners, increasing overall productivity and output. Hence, the parties to NAFTA signed the agreement so that companies can leverage aggregating and arbitration opportunities within the region leading to overall more trade, more jobs and higher GDP. On the side, the countries also hoped for some other interrelated non-economic benefits such as reduction in illegal immigrants from Mexico to US due to availability of more earning opportunities within Mexico. The sectors which were expected to gain most from this agreement were- automobiles (in Canada), textile and apparel (in Mexico), agriculture (in all countries, particularly US), financial and banking services (in US) and energy (especially in US and Canada). 2.!Has NAFTA been beneficial for the countries that signed it? There were numerous positive economic developments after the signing of NAFTA such as: •! Increase in international trade: Mexico’s trade as a % of GDP almost doubled after the NAFTA agreement, new trade was generated due to arbitrage opportunities in agriculture ...
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