Nafta 2 Essay, Research Paper

Over the course of time and events, countries have sought to join with one another to advance their national economic interests. The promise of free trade is; the increase in the flow of goods and services across borders will improve the standard of living for the people on both sides of a border. The North American Free Trade Bloc was setup between The United States and Canada five years before NAFTA. Mexico was rethinking its approach to international trade. The reform was increased by an oil price collapse. As a result from this Mexico joined the General Agreement on Tariffs and Trade (GATT) in 1986. On August 12, 1992, Canada, Mexico and The United States announced their intention of creating a free trade zone. It would be the biggest tri-lateral trade relationship in the world. The NAFTA countries are one of the biggest combined markets (370 million people) in the world, with an estimated gross domestic product of U.S.$6.2 trillion. The European community is only 325 million people.

Some important issues on NAFTA are labor costs, illegal immigrant s and environmental problems (pollution). When NAFTA went into effect about half of the agricultural products had the tariffs cut immediately, but import important items- orange juice, corn, beans, and sugar etc.- will be phased out over a period of fifteen years. In December of 1994 the Mexican peso went from 3.5 per U.S dollar to 6.5 per U.S dollar. Mexico built a huge debt. The Clinton Administration helped Mexico with $50-billion dollars, $20 billion of that being from the International Monetary Fund.

In the last two decades U.S-Mexico trade has increased ever since 1994 the annual bilateral trade has increased $81.5 billion annually.

The price of products from Mexico were all of the sudden cheaper for Americans, while American products were more expensive for Mexicans, this led to a trade deficit for the United States.

Critics of NAFTA say it is taking jobs away from the U.S, while others say it is bringing jobs to The U.S.

If it is bringing jobs to the U.S then the people coming over the border are illegal immigrants. The cost of labor is a big influence on businesses. Corporations and manufacturers seek cheap labor for obvious reasons, if they can get it in another country that is more cost effective than standard labor costs where they are.

This brings up the issue of pollution along the borders of Mexico and the United States.

Many people do not want to live in places along the border, like San Diego for example because of the huge amounts of pollution coming from factories in Mexico; most of the factories were setup by manufacturers in The U.S.

We can strongly urge Mexico to make better standards of pollution prevention by threatening to reinstate tariffs, if this does not work we(the U.S.) should talk to Canada about some kind of punishment for Mexico.

Labor costs can be fixed if Mexico puts a Minimum wage into effect,

This will be a major impact on Mexico s economy, but will eventually

Steady it. Then unions can be formed and work will be done faster and with better quality.

Illegal immigrants will not have a reason to sneak into the United States,

This will without doubt stop illegal immigrants crossing the U.S. border almost completely. This will leave more jobs open in the U.S. than ever before and improve Both Mexico and the United States economies.

That is how I would improve NAFTA, and thus improve all economies involved greatly. I believe many counties in the future will want to join NAFTA, and I think we (NAFTA) should welcome them with open arms.