The Future of the Americas: NAFTA and Beyond

1. The Future of the Americas: NAFTA and Beyond James Luer Jesse Card Patrick Buss Kristen Mess

2. NAFTA • NAFTA was established Jan. 1, 1994 • One of the world's largest trading blocs between Canada, Mexico, and the United States. • Accounting for the association of over 426 million people, and a total GDP earnings of $11.4 trillion. • This is mark is equivalent to 1/3 of the world’s total GDP earnings.

3. NAFTA (Continued) • With the elimination of all the restricted tariff barriers, trade has risen immensely. • Since 1993, total domestic trade has increased from $289.3 billion to $623.1 billion over the 10 year span. • The three countries conduct nearly $1.7 billion in tri-lateral trade every single day. • Experts believe, all the remaining tariff barriers should be eliminated by 2008.

4. Goals of NAFTA • Contribute to the development and expansion of world trade and foreign investment. • Create an expanded, more secure market for the investment and trade of goods/services. • The expansion and creation for far more employment opportunities. • Improve the working environment conditions. • Help raise the overall standard of living.

5. History of NAFTA • U.S.-Canada Free Trade Agreement • Signed Jan. 2, 1988 by President Reagan and Prime Minister Mulroney • Discussion for a North American Free Trade Agreement begin between President George Bush, Sr. and President Salinas of Mexico

6. History (Continued) • On Aug. 20, 1990 President Salinas expressed his enthusiasm to initiate trade negotiations • On Sept. 25, 1990 President Bush replied with his intentions to begin trade with Mexico • The letter also included the desire of the Canadian govt. to participate in the agreement as well

7. History (Continued) • On Aug. 12, 1992 President Bush announced the completion of negotiations for the NAFTA • It would involve all three countries • On Sept. 18 Bush notified the Senate on his intent to enter into the NAFTA with Canada and Mexico • On Oct. 7, 1992 Bush, Salinas, and Mulroney met in San Antonio, Texas to discuss how to implement the NAFTA

8. History (Continued) • The two presidents and the prime minister signed the NAFTA on Dec. 17, 1992 • Upon President Clinton’s election he added provisions to the agreement • He then sent a letter on Sept. 28, 1993 to Congress to vote on implementing NAFTA before the remainder of the year • That way the NAFTA could take effect on the first of January in 1994

9. Canadian Benefits from NAFTA • Trade first began to grow in 1989, when the Canada-U.S. Free Trade Agreement (FTA) was established. • From there came NAFTA in 1994, and that’s when real results started coming forth. • Overall economic growth rose 30.9% over the 10-year span. • Is expected to keep increasing 3.8% per year.

10. Canadian Imports and Exports • Canadian imports sent from the U.S. rose from $87.8 billion to $145.3 billion from ‘93-’03. • Canadian imports shipped from Mexico have increased from $2.7 billion in ’93 to $8.7 billion in ’03, a 227% increase over the 10 years. • Canada’s exports have rose as well. 104% total to both the U.S. and Mexico. • The U.S. accounts for more than half of the exports, and 40% of the totalGDP.

11. Canada’s Agricultural Market • In 2004, agricultural trade totaled $21.1 billion, resulting in a 112% increase from ’93. • Agricultural imports from the U.S. have grown from $5.3 billion in ’93 to $9.7 billion in ’04. • Canada replaced Japan in 2002 as the number one agricultural market for U.S. exports. • In 2004, Canada set records for importing these U.S. commodities: Fresh fruits/vegetables, meat, poultry, rice, soybeans, eggs, and snack foods.

12. Canadian Merchandising Industry • Canada’s merchandise exports have expanded 250% since ‘89, totaling $345.4 billion in ’02. • Merchandise imports grew as well, totaling $218.3 billion in 2002. • A 150% increase from 1989, the original year when trade began between the countries.

13. Mexican Benefits from NAFTA • NAFTA has helped Mexico’s overall economic growth grow 30% over the last decade. • Analysts believe Mexico’s economy will keep increasing by 4 - 4.5% per year. • Overall country production has risen 55% since the start of NAFTA.

14. Mexican Imports and Exports • Mexican imports from Canada and the U.S. have doubled since implementing NAFTA. • Mexican imports from the U.S. grew from $46.5 billion in’93 to $105.4 billion in’03. • Mexico exported $138 billion to the U.S. in ’03. • Mexico exported $8.7 billion to Canada, which is a 227% increase from the $2.7 billion in ’93.

15. Mexico’s Agricultural Market • Agricultural trade between Mexico and the U.S. rose from $6.2 billion to $143 billion. • Mexican agricultural imports have grown from $3.6 billion in’93 to $7.9 billion in ’03. • Then an additional $6 million in ’04. • Mexico set U.S. records for importing: red meats, processed fruits/vegetables, poultry, wheat, rice, and dairy products.

16. Mexican Economy • Areas w/ high levels of foreign trade and investment are more exposed to success. • Wages are 37% higher in these areas. • Employment levels are incredibly higher. • Migration levels are considerably lower in these developed areas. • Mexican tariff barriers lowered from 10% to 2% over the ten year span.

17. U.S. Benefits from NAFTA • U.S. accounts for 88.4% of the NAFTA GDP, an estimated total of $10.4 trillion. • Economic growth of 38% over the last decade. • The destruction of the trade barriers assures the U.S. of a very successful future in the import/export market. • Overall productivity rose 28%.

18. U.S. Imports and Exports • U.S. exports almost doubled to Canada raising from $134 billion to $250 billion • U.S. imports from Mexico totaled $138 billion. • Mexico accounted for 11.6% of the U.S. imports. • U.S. imports from Canada increased 28% since 1991.

19. U.S.’s Agricultural Market • Agricultural trade rose 112% with Canada, reaching $21.1 billion in ’04. • It rose 149% with Mexico, totaling $15.8 billion in ’04. • The U.S. agricultural market is expected to keep growing 5.1% annually.

20. Maquiladoras • Export assembly plants. • Prevalent in Tijuana, Ciudad Juarez, and Matamoros. • There are over 3,000 maquiladoras, they employ over 1 million Mexicans. • Some only pay 50

21. Side Agreements • The North American Agreement on Labor Cooperation focuses on: • Occupational safety and health • Employment and job training • Labor laws and workers’ rights and productivity • The North American Agreement on Environmental Cooperation • Requires each country to protect its environment and the environment of one another

22. Benefits to the Accounting Profession • More job opportunities for accountants due to new clients. • More responsibilities due to: • New procedures, such as dispute settlements. • Easier access into other countries. • A considerable number of provisions of varying complexities in the NAFTA document.

23. Temporary Entry for Business Persons In order to be eligible for entry, you must prove your citizenship. There are four groups who are allowed temporary entry: • Business Visitors • Traders or Investors • Intra-Company Transferees • Profesionals

24. Opponents Of NAFTA • Two Groups • Against NAFTA with evidence • Against NAFTA without evidence

25. Against NAFTA without Evidence • http://www.stoptheftaa.org/ • http://www.thenewamerican.com/20years/ • http://freetradeaintfree.com/

26. Against NAFTA with Evidence • http://www.epi.org/ • http://www.epinet.org/content.cfm/briefingpapers_bp147 • Viewpoints: • NAFTA promotes the loss of American jobs because of lower wages. • Cumulative American jobs lost equals 879,280.

27. “The Public Citizen” and the “NAFTA at Ten” Series • http://www.citizen.org/trade/ • http://www.citizen.org/documents/NAFTA_10_mexico.pdf • Destroyed 1.5 million farming jobs in Mexico • High exports, low quality of life • High population in maquiladora towns • http://www.citizen.org/documents/NAFTA_10_democracy.pdf • Chapter 11 cases • International Preemption theory and loss of federalism

28. What Should You and I think? “The Devil can cite scripture for his purpose.” William Shakespeare The Merchant of Venice • Do the wants and needs of the people of the United States supersede the wants and needs of everybody else in the world? • Are the citizens of the United States willing to make uneasy compromise for the best of the world? • Should the citizens of the United States be willing to make that uneasy compromise?

29. the nafta Edition

30. The Three Countries of NAFTA

31. The Three Countries of NAFTA

32. The #1 Market for U.S. Agricultural Exports

33. The #1 Market for U.S. Agricultural Exports

34. Accounts for 88.4% of the NAFTA GDP

35. Accounts for 88.4% of the NAFTA GDP

36. The Year NAFTA Went into Effect

37. The Year NAFTA Went into Effect

38. The Year the Canada-U.S. FTA Went into Effect

39. The Year the Canada-U.S. FTA Went into Effect

40. Mexican Export Assembly Plants

41. Mexican Export Assembly Plants

42. This Group was Established in 1993 to Monitor NAFTA Negotiations

43. This Group was Established in 1993 to Monitor NAFTA Negotiations

44. The U.S. President who Submitted the Final Draft of NAFTA to Congress in 1993

45. The U.S. President who Submitted the Final Draft of NAFTA to Congress in 1993

46. The U.S. President who Signed the Canada-U.S. FTA

47. The U.S. President who Signed the Canada-U.S. FTA

48. The Canadian Prime Minister who Signed the Canada-U.S. FTA

49. The Canadian Prime Minister who Signed the Canada-U.S. FTA

50. The Overriding Goal of NAFTA