...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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...NAFTA was a trade agreement between the North American nations .it was signed with the objective of NAFTA was facilitating trade in North America as well as the expansion of opportunities for capital invests so that countries such as Mexico could improve economically. In this section, we will look into the impacts of NAFTA on the lives of Mexicans with focus on the economic lives. We also determine the attainment of the objectives of NAFTA NAFTA did not bear any resemblance to the forecasts and the expectations of the agreement. The agreement was not a solution to the unemployment challenges in mexico.it was not helpful in raise the average wages of the Mexicans or reducing the flow of Mexican immigrants to the US. It was however useful in...
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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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...Case study 9, NAFTA and Mexican Trucking. 1. What are the potential economic benefits of the trucking provisions in the NAFTA treaty? Who benefits? Who might lose? 2. What do you think motivated the Teamsters to object to the trucking provisions in NAFTA? Are these objections fair? Why did Congress initially align itself with the Teamsters? * The Teamsters object the trucking provisions in NAFTA because the greater competition from Mexican trucking firms would lower the price of road transportation within NAFTA. * The Teamsters Union also argued that Mexican truck drivers had poor safety records and that Mexican trucks did not adhere to the strict safety and environmental standards of the United Sates. * The president of Teamsters, James Hoffa, says that Mexican trucks are older, dirtier, and more dangerous than American trucks. American trucks drivers are taken off the road if they commit a serious traffic violation in their personal vehicle. That’s not so in Mexico. Limits on the hours a driver can spend behind the wheel are ignored in Mexico. * The Congress initially align itself with the Teamsters during the Bush administration which approved a measure setting 22 new safety standards that Mexican trucks would have meet before entering the United States. 3. Did it make economic sense for the United States to bear the costs of punitive tariffs as allowed for under NAFTA, as opposed to letting Mexican trucks enter the United States? *...
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...NAFTA and the United States Textile Industry When the North American Free Trade Agreement (NAFTA) went into effect in 1994, many expressed fears that large job losses in the U.S. textile industry would occur as companies moved production from the United Stares to Mexico. NAFTA opponents argued passion ately, but unsuccessfully, that the treaty should not be adopted because of the negative impact it would have on U.S. employment. A quick glance at the data available 10 years after the passage of NAFTA suggests the critics had a point. Between 1994 and 2004, production of apparel fell by 40 percent and production of textiles by 20 percent and this during a period when overall U.S. demand for apparel grew by almost 60 percent. During the same timeframe, employment in textile mills in the United Stated dropped from 478,000 to 239,000 employment in apparel plummeted from 858,000 to 296,000 while exports of apparel from Mexico to the United States surged from $1.26 billion to $3.84 billon. Such data seem to indicate that the job losses have been due to apparel production migrating from the United States to Mexico. There is anecdotal evidence to support this assertion. For example, in 1995, Fruit of the Loom Inc., the largest manufacturer of underwear in the United States, said it would close six of its domestic plants and cut back operations at two others, laying off about 3,200 workers, or 12 percent of its U.S. workforce. The company announced that the closures were part...
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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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...1. What are the potential economic benefits of the tracking provisions in the NAFA treaty? * The free trade movement of goods across borders for the harmonization of products standard. * Simplification of tax regimes making it possible for companies to have free trade and foreign protection. * Competition, opening up opportunities for firm to export outside their regions. * Establish the factor of mix cost of common currency. B. Who benefit? a. Achievement of free flow of trade and investment between neighboring countries. C. Who might lose? a. Maybe the truck driver who lost their job since they was no longer needed to transfer the goods from the border of Mexico to their destination . 2. What do you think motivated the Teamsters to object to the object to the trucking provision in NAFTA? Are these objections fair? Why did Congress initially align itself with the Teamster? A. The Teamsters couldn’t accept the part of NAFTA provision of Free Trade which states that all barriers of trade of goods and service among member countries were removed. That mean they wouldn’t have to go by their rules in the country, but by their movement of NAFTA agreement and adjustment. B. It depends on the trade diversion the high cost and low cost of suppliers and does it diverts the amount exceeds. C. No, they adhere to the rules of the NAFTA agreement to impediment to integration. 3. Did it make economic sense for the United State to bear the cost...
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...The Debate Around NAFTA’s Chapter 11: The Case of MMT and Canada Introduction The North American Free Trade Agreement (NAFTA) is an agreement liberalizing trade and investment between Canada, the United States, and Mexico. From the moment it took effect on January 1, 1994, the agreement has sparked controversy and fiery debate from groups across the political spectrum regarding its benefits and costs.[i] Much of this debate revolves around Chapter 11, the section of the agreement that deals with investor-state relations. Chapter 11 gives foreign investors the right to sue the host government for damages if they believe they have been treated unfairly. In 1996, the Ethyl Corporation filed a $250 million claim against Canada under Chapter 11 regarding a gasoline additive they produced called MMT. Background • Methylcyclopentadienyl manganese tricarbonyl (MMT) MMT is an octane-improving fuel additive. The chemical compound was developed in the 1950s by what became the Ethyl Corporation (today part of the Afton Chemical Corporation, but hereinafter referred to as “Ethyl”).[ii] MMT was widely used in the United States and Canada, during the 1960s and 1970s in leaded gasoline. However, due to public health concerns, MMT was banned in the late 1970s by the U.S. Environmental Protection Agency (EPA).[iii] The health effects of exposure to manganese through its use in MMT are under research. Manganese, the main component of MMT, is a common element of our diets...
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...NAFTA (North American Free Trade Agreement) and Its Advantages in Mexico Regional Integration is described as a process in which states enter into a regional agreement in order to enhance regional cooperation through regional institutions and rules. North American Free Trade Agreement was the removal of barriers between Mexico and the United States. It was the phasing out of virtually all restrictions on trade and investment flows. “The expanded trade resulting from NAFTA has raised the United States' gross domestic product very slightly. (The effect on Mexican GDP has also been positive and probably similar in magnitude. Because the Mexican economy is much smaller than the U.S. economy, however, that effect represents a much larger percentage increase for the Mexican economy.)” (The Effects of NAFTA on U.S. –Mexican Trade and GDP, May 2003). Over the years NAFTA has helped Mexico to improve on their exports and imports trading with the United States. NAFTA has had a positive effect dealing with the international investments. This is because some of the restrictions Mexico had on their foreign investment dealing with the ownership of capital. NAFTA also allowed Mexico to do away with tariffs and quotas. This allowed Mexico to become a profitable place to invest, in plants and assembling of products in the United States. NAFTA eliminating the tariffs in Mexico helped to reduce the different license requirements and restrictions on foreign investment. This meant that it would...
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...American Economic Integration: NAFTA and Beyond Dr. Igor M. Paramonov, Southern Alberta Institute of Technology, Calgary, AB, Canada ABSTRACT This paper examines various possibilities for future economic integration within and beyond the North American Free Trade Agreement (NAFTA). Previous publications have suggested three potential trajectories including development within the envisioned original structure, deepening, and widening of NAFTA (Clement et al, 1999). It is necessary to revisit these directions while summarizing major developments and new perspectives. Vision and hard work are required for NAFTA to remain one of the most economically competitive regional trading arrangements in the world. In addition to NAFTA, each member nation has pursued its own plans to integrate with countries and regions beyond North America. The most recent developments involve trade negotiations between Canada and the European Union, as well as both Canada and Mexico’s considerations to join the nine countries of the Trans-Pacific Partnership Pact. The United States cooperates with a group of smaller developing economies within the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). This paper presents ongoing analysis of governmental, academic, and other sources for the purpose of teaching in the field of international business, including the uncommon course of “Business under NAFTA.” INTRODUCTION Is the “Age of NAFTA” over? This is a legitimate...
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...1. The topic of NAFTA that we brought up in class and how it has a variety of impacts on both America and Mexico. NAFTA removes the trade barriers between the U.S., Mexico, and Canada. I will be looking specifically at the impacts that the removal of these barriers has had socially and economically, especially on American manufacturing and agriculture. 2. Government Censorship: Censorship is speech or other public communication that may be harmful, sensitive, or inconvenient. It is usually done by governments and private organizations or individuals who engage in self-censorship. My paper will show what, how, and why the government has so many different types of censorship in our society to regulate the citizens. 3. Capital Punishment: Capital punishment is a legal process where a person is put to death, as a state punishment for a crime. Capital Punishment has an extremly long history and a bunch of reasons why this was considered to be a legal process. My paper will discuss how this punishment is enforced? Why it should be enforced, and how it should be up to a government? 1. The topic of NAFTA that we brought up in class and how it has a variety of impacts on both America and Mexico. NAFTA removes the trade barriers between the U.S., Mexico, and Canada. I will be looking specifically at the impacts that the removal of these barriers has had socially and economically, especially on American manufacturing and agriculture. 2. Government Censorship: Censorship...
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...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. However, some of NAFTA's consequences do seem obviously disadvantageous. First, the reduced barriers bring an imbalanced relationship. For instance: the United States and our two neighbors, reduced barriers to trade have led to much larger trade deficits. In 2008, United States deficit with Canada was $78 billion. With Mexico, United States trade deficit was $65 billion in 2008. Second, due to the negtive effect of NAFTA, Mexico lost 1.3 million farm jobs. When NAFTA removed tariffs, corn and other grains were exported to Mexico below cost. Rural Mexican farmers could not compete. At the same time, Mexico reduced its subsidies to farmers from 33.2% of total farm income in 1990 to 13.2% in 2001. 以下为advantage How does NAFTA benefit trade? First, it eliminatestariffs. This reduces inflation by decreasing the costs of imports. Second, NAFTA creates agreements on international rights for business investors. This reduces the cost of trade, which spurs investment and growthespecially for small businesses. Third, NAFTA provides the ability for firms in member countries to bid on government contracts. Fourth, NAFTA also protects...
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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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...after the inception of the North American Free Trade Agreement (NAFTA), ratified in 1994 (Kubasek, Brennan, & Browne, 2015). Many prominent economists and U.S. government officials convinced the American people to support NAFTA by predicting an abundance of growing trade surpluses with Mexico, and the creation of hundreds of thousands of jobs. Now, twenty years later, Americans view NAFTA as a symbol of job loss, and huge lingering trade deficits. Many proponents are touting this agreement between the United States, Mexico, and Canada as having resounding success. However, a significant number of NAFTA opponents interpret the results as being devastating to the U.S. economy. It is important for American citizens to understand the overall effects of this pact creating the world’s largest free trade area after its initiation twenty years ago. North American Free Trade Agreement and American Job Loss The goal of NAFTA is to eliminate trade barriers between the U.S., Canada, and, Mexico (Kubasek et al., 2015). Since the implementation of NAFTA in 1994 (Kubasek et al., 2015), these roadblocks have been either immediately removed or were eliminated over longer periods, ranging from five to fifteen years (International Economics). The volume of trade between the three countries has soared to $1.2 trillion as of 2012 (Office of the United States Trade Representative, USTR 2014). Nevertheless, the impact of NAFTA has been both positive and negative resulting in a deep chasm...
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