The North America Free Trade Agreement (NAFTA) is a trade pact between the United States, Mexico and Canada. The trading block came into effect in 1994 with an aim of removing trade barriers and tariffs so as to benefits the three nations. The NAFTA goal is to enable companies in the region to enjoy the free movement of goods and services. This can contribute in flourishing of the regions firms economically due to utilization of labor available and a ready market for products (Washington State University, n.d.). But, the pact does not prevent member nations from reaching other arrangements with other nations.
The NAFTA was formed with an intention of forming a strong economic union in North America equivalent to European Union. The goal was to strengthen the region economic strength. But, can NAFTA achieve what EU has been able to achieve? Can NAFTA have a common currency? Free Trade Area agreements gives the unified nations higher trade negotiation powers. This is good for the nations in the agreement but they can destroy other nations especially the developing nations. Take a situation where cheap products from Free Trade Area are dumped to nations with high production costs. Such a situation can destroy industries and suppress labor wages (History.com Editors, 2021).
The NAFTA, though a trade agreement is also helping in unifying the region. An issue like illegal immigration that poses a threat to the region unity can be solved by the NAFTA. When member nations accept or allow their firms to assemble products in member nations it makes people to find employment in their nations. For example, United States firms now assembles parts in Mexico. This makes the people who illegally migrate from Mexico to U.S. get an employment while in their nation (Gamso & Grosse, 2019). This reduces the number of illegal immigrants in U.S.
The NAFTA brought both the good and the worst to the member states. One, in all the member nations trade grew. The removal of trade barriers made consumers in all the nations to have access of cheap products. But, this also crippled some industries in member nations. For example, some Mexico agricultural products like corn, could not compete with same products from U.S. where agriculture enjoys subsidy from the government. But, on the other hand demand for other Mexico agricultural products rose. This made the nation to expand its agricultural land and as a result contributed to deforestation (Chatzky, 2020).
The NAFTA is also blamed for loss of jobs especially in the U.S. this is because companies took advantage of relocating their assembly plants to the Mexico where the labor cost is low. The relocation of computer, electrical appliances, textiles and motor vehicle plants left majority of Michigan, New York, Texas and California without jobs. The companies that did not relocate used relocation threats to oppress the employees (Amadeo, 2016). Though, Mexico citizens were able to get the jobs they were also exploited. For example, women were made to present pregnancy test before getting jobs. Also, health conditions at the plants were not good.
In conclusion, the NAFTA has played a great role in uniting North America. The trade block has been able to reach international standards. The pros of the NAFTA outweigh the cons. In the future, the NAFTA should be expanded to include other nations in the region. Also, the agreement should incorporate aspects like social, cultural and political. This will make the region to be unified and able to deal with issues that affect the region as one nation.
The NAFTA was formed with an intention of forming a strong economic union in North America equivalent to European Union. The goal was to strengthen the region economic strength. But, can NAFTA achieve what EU has been able to achieve? Can NAFTA have a common currency? Free Trade Area agreements gives the unified nations higher trade negotiation powers. This is good for the nations in the agreement but they can destroy other nations especially the developing nations. Take a situation where cheap products from Free Trade Area are dumped to nations with high production costs. Such a situation can destroy industries and suppress labor wages (History.com Editors, 2021).
The NAFTA, though a trade agreement is also helping in unifying the region. An issue like illegal immigration that poses a threat to the region unity can be solved by the NAFTA. When member nations accept or allow their firms to assemble products in member nations it makes people to find employment in their nations. For example, United States firms now assembles parts in Mexico. This makes the people who illegally migrate from Mexico to U.S. get an employment while in their nation (Gamso & Grosse, 2019). This reduces the number of illegal immigrants in U.S.
The NAFTA brought both the good and the worst to the member states. One, in all the member nations trade grew. The removal of trade barriers made consumers in all the nations to have access of cheap products. But, this also crippled some industries in member nations. For example, some Mexico agricultural products like corn, could not compete with same products from U.S. where agriculture enjoys subsidy from the government. But, on the other hand demand for other Mexico agricultural products rose. This made the nation to expand its agricultural land and as a result contributed to deforestation (Chatzky, 2020).
The NAFTA is also blamed for loss of jobs especially in the U.S. this is because companies took advantage of relocating their assembly plants to the Mexico where the labor cost is low. The relocation of computer, electrical appliances, textiles and motor vehicle plants left majority of Michigan, New York, Texas and California without jobs. The companies that did not relocate used relocation threats to oppress the employees (Amadeo, 2016). Though, Mexico citizens were able to get the jobs they were also exploited. For example, women were made to present pregnancy test before getting jobs. Also, health conditions at the plants were not good.
In conclusion, the NAFTA has played a great role in uniting North America. The trade block has been able to reach international standards. The pros of the NAFTA outweigh the cons. In the future, the NAFTA should be expanded to include other nations in the region. Also, the agreement should incorporate aspects like social, cultural and political. This will make the region to be unified and able to deal with issues that affect the region as one nation.
