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NAFTA

NAFTA. By Bianca Conway and Andy Heckman. What is NAFTA?. NAFTA is the North American Free Trade Agreement On Dec. 17, 1992, President Bush, Mexican President Salinas, and Canadian Prime Minister Mulroney signed NAFTA

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NAFTA

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  1. NAFTA By Bianca Conway and Andy Heckman

  2. What is NAFTA? • NAFTA is the North American Free Trade Agreement • On Dec. 17, 1992, President Bush, Mexican President Salinas, and Canadian Prime Minister Mulroney signed NAFTA • NAFTA proposed to eliminate restrictions on the flow of goods, services, and investments in North America • NAFTA was signed into law by President Clinton on December 8, 1993, and later took effect on January 1, 1994

  3. NAFTA Objectives • For Mexico ~Secure access to the US market ~Attract new capital ~Expand exports ~Consolidate economic reforms. End to Protectionism • For Canada ~Access to US and Mexican markets • For the US ~Leverage in Europe and Japan ~Increase competitiveness and eliminate duties ~New issues: immigration, environment, drugs. ~Prevent Asian and Europe firms from bypassing US tariffs through Mexico ~Force Mexican producers to adopt foreign standards and foreign business practices

  4. NAFTA eliminates trade Barriers • NAFTA helped to eliminate a number of non-tariff measures affecting agricultural trade between the United States and Mexico. • Prior to January 1, 1994, the single largest barrier to U.S. agricultural sales was Mexico’s import licensing system. • However, this system was largely replaced by tariff-rate quotas or ordinary tariffs. • All agricultural tariffs between Mexico and the United States were eliminated as of January 1, 2008. • Many were immediately eliminated and others were phased out over transition periods of 5, 10, or 15 years.

  5. Advantages • NAFTA removed all non-tariff hurdles between the United States and Mexico and in the process, this has allowed the U.S. agricultural products to regain market share within Mexico. • NAFTA has allowed the agricultural exports of the United States farmers to Mexico to nearly double. • In Canada NAFTA helped produce a strong Economy which lowers taxes, debt and helps people receive a higher ed.

  6. Disadvantages • NAFTA will force jobs out of the United States to Mexico where the cost of labor is much lower. Over 1 million jobs have been lost in the US since the beginning of NAFTA and 20,000 of these jobs were lost in the state of Tennessee alone. • Environmental problems ~Employment has increased and tax benefits for operating near the border have yet to be phased out. Environmental provisions of NAFTA have not worked. ~Population explosion(From 11 million today to 25 million by 2020) • Lower safety and health standards • Uneven effect on the US Texas vs. other States • Adjustment costs for the three partners

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