Preview

Nafta's Effect on Mexico

Good Essays
Open Document
Open Document
889 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Nafta's Effect on Mexico
NAFTA’S effect on Mexico

The North American Free Trade Agreement, often referred to as NAFTA, is an agreement between the U.S., Canada and Mexico. The purpose of NAFTA is to reduce and eventually erase trade barriers, which would make it easier for the three countries to import and export goods and services more freely between each other. NAFTA had started as an agreement between the United States and Canada, and then in 1992, Mexico joined the venture. The union of these countries was logical, mainly because of their proximity to each other and the benefits that each would soon come to realize. Some of the key contents in the NAFTA agreement was that in a ten year period, most all of the tariffs on the goods would be removed, it provided for the protection of intellectual property, easier access to invest in foreign industries, that is with a few exceptions which would exclude key markets for that country. An example of this is that Mexico was not willing to open the door to its energy and railway industries. NAFTA also meant freer flow of services, which would allow unrestricted access to some of the country's markets. Even more importantly, NAFTA made sure that environmental and ethical standards were in place.
Other objectives include increase business investment, and help North America become more competitive in the global marketplace. NAFTA benefit consumers in many ways by providing lower prices and better quality products and also stronger health and safety standards. Since the introduction of NAFTA, Mexico’s economy has grown exponentially. The Mexican economy is strongly tied to economic conditions in the United States, making it very sensitive to economic developments in the United States. Mexico is highly reliant on exports and most of Mexico’s exports go to the United States. In 2009, Mexico’s exports quadrupled to $292 billion. Under NAFTA the United States became the largest source of foreign direct investment in Mexico, accounting for over

You May Also Find These Documents Helpful

  • Powerful Essays

    In 1994, Mexico, Canada, and the United States entered into one of the worlds largest free trade regions called the North American Free Trade Agreement (NAFTA) (Salas, 2005). The most noteworthy feature of the agreement is that it between two highly economic and socially developed countries and one still developing. The boost in trade and the increased financial flow between these countries has resulted in one of the more economically merged areas in the world.…

    • 1374 Words
    • 6 Pages
    Powerful Essays
  • Better Essays

    The economic structure in Mexico opened an environment for businesses to open new satellite locations to take advantage of the land and labor costs. The United States entered into the North American Free Trade Agreement with Mexico. “The favorable terms of trade makes the Mexico import and export a profitable venture both for the domestic and…

    • 889 Words
    • 4 Pages
    Better Essays
  • Good Essays

    Nafta

    • 4045 Words
    • 17 Pages

    We begin by looking at how the negotiations for NAFTA began and why. In the 1970’s, Mexico had a huge oil boom from new resources. The country, as a whole, was doing quite well during this time. The problem was that Mexico’s economy largely depended on oil exports alone. When there was a collapse of production, many countries sought other means of importing oil. The collapse almost ruined Mexico’s economy because of the amount of foreign debt already owed. In 1978, Mexico applied for membership to the General Agreement on Tariffs and Trade (GATT). The Mexican government also wrote a protocol of accession, or waiver, which allowed Mexico to trade without having to join the GATT. The final decision was not to join the GATT and go with the protocol of accession. When oil prices dropped and inflation rose, Mexico found it hard to generate non-oil revenue. As a result, in 1986, Mexico resubmitted for membership to the GATT and began trade negotiations with the U.S.…

    • 4045 Words
    • 17 Pages
    Good Essays
  • Good Essays

    NAFTA is categorized as one of the largest formed trading blocs. Despite the expansion and diversification in the economies of member states, there has been quite a number of setbacks as a result of the enactment of the trading platform. NAFTA'S focus was to reduce tariffs among member states namely Mexico, Canada, and the United States over the years, making it easier to trade goods across national borders, and increasing economic efficiency in North America.…

    • 478 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    Pros And Cons Of Nafta

    • 320 Words
    • 2 Pages

    It has helped each country’s economy a lot. Mexico hasn’t benefited a lot from this agreement but since they have added internal reforms to the economy they have started to gain competitiveness and the platform that has been constructed mostly for exports and their manufacturing is also starting to become stronger. Even economists Jaime Serra Puche said “I think NAFTA has been excellent for Mexico.” Even politicians like Bill Clinton and Hillary Clinton have said that NAFTA has been an excellent decision, Mexico, Canada and USA has made. They said it has a high value in todays society mainly because of all the new jobs the agreement has created. Bill Clinton said “NAFTA means jobs, and good paying jobs, if I didn’t believe that, I wouldn’t support this agreement”. In these next three paragraphs you’re going to hear about all the pros and cons that NAFTA has given Canada, USA, and…

    • 320 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Mgt 448 Week 2 Paper

    • 679 Words
    • 3 Pages

    (NAFTA) North American Free Trade Agreement will be discussed between neighboring countries. Canada and the United Sates in this agreement have eliminated most of the tariffs that are incorporated in the trades of the products amongst these two regions. Effect in January 1, 1994, (NAFTA) has been a major force in increasing the agricultural trade among the two countries and it is the largest trade bloc in the world in terms of combined gross domestic product (GDP) of its members. Since implemented, the United States and Canada has been 112 percent. In addition, trades between these three countries have improved themselves over $333.8 billion throughout the existence of the unification (Kroll, 2005).…

    • 679 Words
    • 3 Pages
    Good Essays
  • Good Essays

    NAFTA

    • 726 Words
    • 3 Pages

    There has been a lot of positive and negative dispute with this agreement among these northern countries. Many experts have a wide disagreement persisting’s on how and to what degree NAFTA accounts for changes in net employment from adjustments in the labor market. Supporters of NAFTA, and many economists, see a positive impact on U.S. employment and note that new export related jobs in the United States pay 15 to 20 percent more on average than those focused on domestic production. But side effects of the treaty must not be ignored. Our case explains both sides of the coin in relations to the Mexican trucking and being able to commute in US roads.…

    • 726 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Canada part of NAFTA

    • 7446 Words
    • 30 Pages

    Trade in services has also increased under NAFTA. Canada's trade in services with the United States and Mexico grew has doubled from $42.9 billion in 1993 to $86.5 billion in 2005. Our trade in services with the United States reached $91.3 billion in…

    • 7446 Words
    • 30 Pages
    Good Essays
  • Powerful Essays

    Nafta remains the model for trade agreements with developing Latin countries, including the Central American Free Trade Agreement, passed by Congress in 2005. Three more Nafta-like agreements are now pending in Congress — with Panama, Columbia and Peru. When Nafta finally became a reality, on Jan. 1, 1994, American investment flooded into Mexico, mostly to finance factories that manufacture automobiles, appliances, TV sets, apparel and the like. The expectation was that the Mexican government would do its part by investing billions of dollars in roads, schooling, sanitation, housing and other needs to accommodate the new factories as they spread through the country.…

    • 3517 Words
    • 15 Pages
    Powerful Essays
  • Good Essays

    I choose NAFTA as my topic because most people have strong opinions as to how NAFTA has affected the economy and whether it has had major significance on the job market. I figured that I would provide NAFTA’s advantages and disadvantages and provide my opinion. NAFTA has had some advantages, for example NAFTA created the world’s largest free trade area, linking about 440 million people and producing $17 trillion in goods and services annually, trade between the NAFTA signatories, form $297 billon in 1993 to almost one trillion in 2007. This information I was able to locate in the article “Advantages of NAFTA” by Kimberly Amadeo. In this same article Amadeo mentions that exports from Canada and Mexico to the U.S grew from $142 billion to $452 billion. Then NAFTA has been helpful for agricultural exports because it reduces high Mexican tariffs. Mexico is the top export destination for beef, rice, soybean meal, corn sweeteners, apples and beans Mexico is the second largest producer of corn, soybeans and oils. As a result of NAFTA the percentage of U.S agricultural exports to Canada and Mexico has grown from about 22% in 1993 to about 30% in 2007. NAFTA has increased trade services, including financial services and health care items as these items aren’t as easily transported as are goods, so being able to expand services to nearby countries is important. Since NAFTA was enacted U.S foreign direct investment in Canada and Mexico tripled to about $340 billion as of 2006.…

    • 743 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Nafta Research Paper

    • 725 Words
    • 3 Pages

    The North American Free Trade Agreement was implemented on January 1, 1994. Its purpose was to remove tariff barriers between Canada, the United States and Mexico. The Agreement includes two supplemental agreements on environmental and labor issues that address cooperative efforts to reconcile policies and procedures for dispute resolution between the member countries. NAFTA was preceded by an agreement between the United States and Canada entitled the U.S.-Canada Free Trade Agreement, which was enacted on January 1, 1989, but has now been superseded by the NAFTA.…

    • 725 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Nafta Thesis

    • 472 Words
    • 2 Pages

    The North American Free Trade Agreement is a free trade agreement among Canada, the United States of America, and Mexico, based on the model of the European Communities (today: European Union). NAFTA was signed separately by the leaders of the three countries, president Bill Clinton, president Carlos Salinas de Gortari and prime minister Brian Mulroney on December 17, 1992 and went into effect on January 1, 1994.…

    • 472 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    The primary gains to the United States from the NAFTA financial services agreement will be predominantly seen in the long run. The access to a market that includes 90 million people and has been served by a financial and banking sector that has been relatively inefficient and illiquid will prove to be a major advantage to the United States. Although the market access to Mexico 's financial industry has been gradual, U.S. banks, insurers and financial companies have free and fair access to Mexico. Further, in contrast to Canada, the United States has had strong historical ties with Mexico and this familiarity is expected to provide an advantage to the United States in Mexico.…

    • 1736 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Garreau Nine Nations

    • 600 Words
    • 3 Pages

    First of all, Garreau believed that international borders are vanishing and that the United States, Canada and Mexico are being redesigned into nine nations. Hence the North American Free Trade Agreement (NAFTA) was a supporter of Garreau's hypothesis. The NAFTA eliminated the borders between the three countries and allowed a free commercial trade flow between them. The economies opened up to each other and each country took advantage of the other two by exploiting their strengths and weaknesses through exportation and importation.…

    • 600 Words
    • 3 Pages
    Good Essays
  • Better Essays

    The implementation of NAFTA on January 1, 1994 brought the immediate elimination of tariffs on more than one-half of Mexico 's exports to the U.S. and more than one-third of U.S. exports to Mexico. Under the agreement, the United States and Mexico were to allow trucks from each country to deliver goods to destinations inside the other country, provided the trucks and their drivers met all safety regulations mandated by the host government.…

    • 3311 Words
    • 14 Pages
    Better Essays