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Nafta on Trade

In: Business and Management

Submitted By Bonison
Words 3117
Pages 13
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 1947. Countries, including the United States and Canada, were members of this agreement. Mexico joined GATT several years later. Many countries had economies that had collapsed due to the World War II, so GATT was designed to increase trade liberalization between countries. The North American Free Trade Agreement (NAFTA) was implemented on January 1, 1994, designed to take away tariff barriers...

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