1-Omar, thanks for contributing to this week’s discussion; your assessment of this week’s discussion content is correct. According to Hufbauer et al. (2005), critics of NAFTA postulate that partners within the agreement have missed opportunities and misplaced priorities. The authors further mention that some of these critics had put forward a plan that is a decade-year-old during the NAFTA ratification debate to bolster their argument, even before the NAFTA pact was concluded. They serve as a lightning rod by attacking labor and environmental issues against trade liberalization within Mexico, Canada, and the U.S.
One of the primary contentions of critic’s debates, as documented by Hufbauer et al. (2005), is that trade liberalization among Mexico and Canada would displace and relocate U.S. workers, which in turn would suppress real wages. Such an argument was baseless without any scientific data to shore up these critical claims, echoed throughout the academic community noted in Hufbauer et al. (2005). Despite the assurance from the academic community, the dispute still resonated throughout the public mediums across the U.S. To fuel the fire to the ongoing debate, critics use higher levels of illegal immigration, slow progress on environmental problems, slow income disparities (i.e., within Mexico), weak growth in wages, and illegal trafficking of drugs to bolster their argument against NAFTA. Although some of these issues were a correlation of economic integration within the formation of NATFA, critics could use it to their advantage to formulate an argument against NAFTA.
Hufbauer et al. (2005) also argued that, since the integration of these three economies over the last three decades, NAFTA’s real GDP growth from 1994 to 2003 has risen to 3.6 percent for Canada, 3.3 percent in the U.S. and Mexico 2.7 percent (despite the recession of 1995). Thus, these three economies grew faster than their counterparts within the OECD member states. Although Mexico’s growth was insufficient to address its long economic challenges, it was a step in the right direction for the Mexican economy. In addition, Hufbauer et al.’s (2005) data show that, since integrating these three economies, interregional merchandise trade has doubled; US FDI in Canada and Mexico increased faster. Based on your assessments of these economies, how the contribution of NAFTA, helped the economy of Mexico with interregional trade?
Hufbauer, G.C., Schott, J.J., Clark, D. (2005) NAFTA Revisited: Achievements and Challenges, Peterson Institute for International Economics, ProQuest eBook Central, http://ebookcentral.proquest.com/lib/capella/detail.action?docID=3385457.
2-The United States and Canada started an Auto free trade agreement in 1965, In 1988 both countries began negotiation in regards to eliminating tariff and nontariff barriers, which it resulted in an economic growth of 5% by 1998, and lots of jobs creation among both borders, Furthermore, the US Government and Canadian Government joined forces with Mexico and signed the North America Free Trade Agreement (NAFTA) back in 1994. This NAFTA will reduce help reduce prices of various commodities to US consumers and increase competition. Ever since NAFTA Mexico’s economy grew and Mexicans increased their living standards. Additionally, the United States launched the Enterprise for the American Initiative (EAI), which led to the formation of the Free Trade Area of the Americas (FTAA) in 1998, whose ultimate goal is hemispheric free trade among the 34 democratic countries of North and South America. Negotiations are proving to be difficult and are not expected to succeed anytime soon. Since 2001, the United States began a journey signing a free trade agreements (FTAs) with Australia, Bahrain, Chile, Jordan, Morocco, Oman, Peru, and Singapore. Also operational is the United States-Dominican Republic-Central American Free Trade Agreement (US-DR-CAFTA) with Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, besides the Dominican Republic. Ratified in 2001 was the U.S. FTA with Korea, Panama, and Colombia. The United States is negotiating still other FTAs with other countries. In recent years, the EU and other countries have also been very active in signing FTAs. The EU has FTAs with Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Tunisia, and Turkey as part of an effort to create a Euro Mediterranean Free Trade Area (EMFTA). The EU also has FTAs with Norway and Switzerland; South Africa and South Korea; Chile, Colombia, Mexico and Peru; and with 12 other smaller nations, and is negotiating an FTA with Mercosur and the Gulf Cooperation Council (which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates). Japan has FTAs with ASEAN, India, Mexico, and Switzerland and is negotiating with still other countries. Canada has FTAs with the United States and Mexico (NAFTA) and the European Free Trade Association (EFA), as well as with Israel, Colombia, Costa Rica, Honduras, and Peru; and it is negotiating with other countries as well. By 2009, there were nearly 300 FTAs from just about 50 in 1990. Today, most countries belong to multiple FTAs. This spaghetti-bowl proliferation of bilateral and regional FTAs is regarded by some as a stumbling block to a freer multilateral trading system (Salvatore, 2013). The United States understands that trading with other countries makes the world flat a makes the US economy stronger than ever and bring wealth to nations and better the quality of living for millions.
Salvatore, D. (2013). In International economics (pp. 313–315). essay, John Wiley & Sons.
3-NAFTA was disputable when previously proposed, generally in light of the fact that it was the first FTA including two affluent, created nations and a creating nation. The political discussion encompassing the understanding was troublesome with defenders contending that the arrangement would help create a large number of occupations and diminish pay divergence in the district, while adversaries cautioned that the arrangement would cause enormous employment misfortunes in the United States as organizations moved creation to Mexico to bring down expenses. Actually, NAFTA didn’t cause the immense activity misfortunes dreaded by the pundits or the enormous monetary additions anticipated by allies. The net in general impact of NAFTA on the U.S. economy seems to have been generally unassuming, essentially in light of the fact that exchange with Canada and Mexico represents a little level of U.S. Gross domestic product. Nonetheless, there were specialist and firm modification costs as the three nations acclimated to more open exchange and speculation (Leonard & Caporal, 2017).
The rising number of respective and provincial economic alliance all through the world and the rising presence of China in Latin America could have suggestions for U.S. exchange strategy with its NAFTA accomplices. A few defenders of open and decides based exchange fight that keeping up NAFTA or extending monetary relations with Canada and Mexico will help advance a typical exchange plan with shared qualities and create financial development. A few adversaries contend that the arrangement has caused specialist uprooting, and renegotiation could bring on additional activity misfortunes
One of the more disputable parts of NAFTA is identified with the agrarian area in Mexico and the recognition that NAFTA has caused a higher measure of Mexican laborer removal in this segment than in other financial segments. Numerous pundits of NAFTA state that the arrangement prompted an enormous number of occupation misfortunes in Mexican horticulture, particularly in the corn division. One examination appraises these misfortunes to have been more than 1 million lost positions in corn creation somewhere in the range of 1991 and 2000. Be that as it may, while a portion of the adjustments in the farming part are an immediate consequence of NAFTA as Mexico imported more lower-valued items from the United States, a considerable lot of the progressions can be credited to Mexico’s one-sided horticultural change measures during the 1980s and mid 1990s (Millward, 2016). Most homegrown change measures comprised of privatization endeavors and brought about expanded rivalry. Measures included taking out state endeavors identified with agribusiness and eliminating staple value underpins and subsidies. These changes corresponded with NAFTA dealings and proceeded past the execution of NAFTA in 1994. The one-sided changes in the farming part make it hard to isolate those impacts from the impacts of NAFTA.
Millward, D. (2016, Apr 04). US candidates take aim at ‘toxic’ free trade deal: The controversial nafta treat is polarising voters and has far-reaching implications for business, writes david millward. The Daily Telegraph Retrieved from https://search.proquest.com/docview/1777883145?acc…
Leonard, J., & Caporal, J. (2017). USTR to propose labor, IP text, but hold off on most controversial ideas at third NAFTA round. Inside US Trade Daily Report, Retrieved from https://search.proquest.com/docview/1942157672?acc…