Nafta Essay, Research Paper

NAFTA

On January 1st, 1994, the North American Free Trade Agreement went into effect, creating the world s largest free trade area. Among the main objectives is the liberalization of trade between Canada, Mexico and the United States, to stimulate economic growth and give the NAFTA countries equal access to each other s markets. Some of the promised benefits were 200,000 new U.S. jobs from NAFTA per year, higher wages in Mexico, a growing U.S. trade surplus with Mexico, environmental clean-up and improved health along the border. This appeared to be a great agreement, but after only five years of being in affect, Americans were starting to see the results of NAFTA and the failing promises. In 1999, for the first time ever, Americans say the U.S. trade deficit is the most important economic issue facing the country, above taxes, the federal budget deficit, and inflation.

After years of NAFTA, the American people were starting to see the real effects of NAFTA. The most important feature of NAFTA that would benefit the people is employment and the promise that NAFTA would create hundreds of thousands of new, high paying jobs. There was also a promise that wages in Mexico would increase due to NAFTA. With NAFTA, we were promised lower prices on agriculture and beef, and promised that the environmental problem in Tijuana would be greatly reduced if NAFTA would be put into affect. It seems as if the only people NAFTA has benefited is large corporations. More corporations are shutting down plants in the U.S. and moving across the border where they can pay a substantially lower wage rate for their employees. Corporations can produce their products in Mexico and ship them back to the U.S. with no tariffs or taxes, saving the corporations a large amount. Since the introduction of the North American Free Trade Agreement, it seems as if the only people that have benefited from it are the small percentage of owners and presidents of large corporations.

An important feature of NAFTA is the amount of high paying jobs that it is supposed to create. Unfortunately after seven years, the number of high paying jobs has not increased as drastically as hoped. Independent analysts point out that the trade deal has cost U.S. workers more than 400,000 jobs. America s chief export is jobs. Thanks to NAFTA, U.S. corporations can eliminate middle-class jobs here, move the factory to Mexico, pay subsistence wages to people there, then send their stoves and other products back to the U.S. without paying a dime in tariffs, selling the products for the same high price they ve always charged. The wage difference is pocketed by the corporation. (Hightower, p.144). With NAFTA, we were also promised new high paying jobs. The U.S. Department of Labor projects that the professions with the greatest expected future growth in the U.S. are cashiers, waiters and waitresses, janitors and retail clerks. These and other lower-wage service jobs are the kind that will most likely be available to workers displaced by NAFTA. NAFTA was also supposed to lift the living standards in Mexico. Since NAFTA was enacted, nearly 8 million Mexicans were documented as earning less than Mexico s legal minimum wage of $3.40 a day, 20% more than in 1993.

Over the past five years, the worldwide U.S. agricultural trade surplus has been growing. However, since 1993, the U.S. agricultural surplus with Mexico and Canada has declined by two-thirds under NAFTA. American farmers are having a difficult time of competing with the labor in Mexico. In Mexico, they pay $6 a day for labor and that is how much the American farmers pay their employees per hour. This is hurting U.S. farmers because Mexican farmers can charge a lower rate on their goods due to cheaper labor, whereas, the American farmers have to keep there rates high enough to make some income.

There is clearly only one group of people who benefit from NAFTA and that is the corporations. With NAFTA, corporations have an opportunity to move their plants to Mexico and receive cheaper labor, which could give them more money in their pockets or provide the overall public with cheaper goods. Some companies may even move plants down to Mexico and provide them with better paying jobs. NAFTA also makes it possible for free trade in all of North America, which makes it possible for Mexican and Canadian companies to provide their products to Americans without being charged tariffs. Overall NAFTA has had the opportunity to greatly benefit a lot of people. The agreement could provide better high paying jobs for families in Mexico, as well as the U.S. and Canada. Without tariffs, companies could be able to provide goods for possibly a lower rate. There are many ways, if regulated, that NAFTA could greatly benefit the people of Mexico, Canada and the United States. Unfortunately years after NAFTA has been enacted, it looks as if only a small percentage of the public are benefiting.

As far as I am concerned, I would hate to lose my job one day because the company I worked for wanted to move to Mexico to get cheaper labor. There are many people who have been affected by NAFTA and these people have no place to turn, but to get a job as a waiter, janitor, or cashier. These high paying jobs that were promised from NAFTA just aren t there. This is the main problem I have with NAFTA. I think that the American people are being ripped off by corporations like GE, just so the CEO can fly around in a company owned jet. The American public are also aware of the poor performance of NAFTA: 66% of Americans believe that NAFTA has helped large corporations and 58% believe that foreign trade has been bad for the U.S. economy because cheap imports have cost wages and jobs here. I would have to agree with Jim Hightower who said: I say it s time to repeal NAFTA.

Works Cited Page

Chomsky, Noam. Notes on NAFTA: The Masters of Mankind. http://www.cs.unb.ca/ alopez-o/politics/chomnafta.html

Hightower, Jim. There s nothing in the middle of the road but yellow stripes and dead armadillos. New York: HarperCollins, 1997.

Parenti, Michael. Against Empire. San Francisco: City Lights Books, 1995.

NAFTA at 5 years report card. Editorial. Public Citizen 22 December 1998. http://www.citizen.org/pctrade/nafta/naftapg.html.