NAFTA
- Created by: Amwangi
- Created on: 05-03-17 21:45
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- AIMS/BACKGROUND
- Gradually phase out tariffs between member countries by 2010
- Man drive for the agreement was challenge faced by trade blocs from other parts of world e.g. Europe
- NAFTA signed by USA, Canada and Mexico - 1994
- +VE
- Trade between member countries crippled from 1993-2007 ( £306bn - $930bn)
- Mexico increased foreign investment (as foreign companies planted there to gain access to NAFTA's trading partners markets)
- Manufacturing increased in the USA with increased employment
- -VE
- The Growth of US-owned Labour Intensive export orientated companies (maquiladoras) on the Mexican border keeps wage rates down
- Maquiladoras receive raw materials from companies in the U.S. to assemble and export back as finished products. Maquiladoras are generally owned by U.S. companies that are incentivized to build Maquilas in Mexican border towns in return for low-cost labor and savings .
- Some Canadian companies closed because of competition from lower cost US firms
- Some US firms moved to Mexico - Americans have lost jobs
- Food surpluses from the USA and Canada could be dumped in Mexico affecting the peasant agricultural economy
- Mexico could be exploited due to less stringent pollution laws
- The Growth of US-owned Labour Intensive export orientated companies (maquiladoras) on the Mexican border keeps wage rates down
- +VE
- Mexico had gone into debt in the 1970's and 80's - hoped by joining NAFTA higher economic growth and employment
- Increased investment opportunities
- Improved cooperation between 3 member states
- The Growth of US-owned Labour Intensive export orientated companies (maquiladoras) on the Mexican border keeps wage rates down
- Maquiladoras receive raw materials from companies in the U.S. to assemble and export back as finished products. Maquiladoras are generally owned by U.S. companies that are incentivized to build Maquilas in Mexican border towns in return for low-cost labor and savings .
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