Benefits Of Nafta Agreement

Thursday, April 8, 2021 Category: Uncategorized

NAFTA shows the classic dilemma of free trade: diffuse benefits with concentrated costs. While the economy as a whole may have recovered slightly, some sectors and communities have experienced profound disruptions. A southeastern city loses hundreds of jobs when a textile factory closes, but hundreds of thousands of people find their clothes slightly cheaper. Depending on how you quantify it, the overall economic benefit is probably greater, but not very noticeable at the individual level; the overall economic loss is small in the grand scheme of things, but devastating for those it directly affects. Has the success of Mexico`s automotive sector reinforced the imbalance between NAFTA winners and losers? Some Mexican critics are concerned about income inequality between workers in the industry who have benefited from the country`s globalization and those who have been excluded from these benefits, especially the rural poor. Given that the agreement is more than 23 years old, there are many clarifications and technical improvements that could be made in all nafta trade areas, such as labour, the environment or culture. NAFTA would also benefit from the inclusion of new trade zones, such as e-commerce, which are not currently covered to ensure that the agreement is aligned with current economic realities. Since the United States, Mexico and Canada agreed on the new USMCA economic treaty in early 2020, NAFTA has once again made headlines. The USMCA is effectively replacing the old international trade agreement that has changed the economies of the three countries over the past two and a half decades. NAFTA is often held responsible for things that could not be its fault. In 1999, the Christian Science Monitor wrote about a town in Arkansas that it would “collapse, like so many NAFTA ghost towns that have lost jobs in the needle trade and in production in places like Sri Lanka or Honduras.” Sri Lanka and Honduras are not parties to the agreement.

NAFTA was built on the success of the former Canada-U.S. The Free Trade Agreement (CUSFTA), which came into force in 1989, complements World Trade Organization (WTO) agreements with deeper commitments in key areas. Third, THE stronger growth of NAFTA has created jobs. According to a 2010 report, U.S. free trade agreements – most of which came from NAFTA – directly supported 5.4 million jobs, while trade with those countries supported 17.7 million. During his tenure as president, Reagan made an election campaign promise to open up trade in North America by signing the Trade and Tariff Act in 1984, which gave the president more negotiations on trade deals without problems. Four years later, Reagan and the Canadian Prime Minister signed the Canada-Americans. Free trade agreement. Not only are none of these other countries members of NAFTA, but none have a free trade agreement with the United States.

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