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NAFTA

Page history last edited by PBworks 15 years, 6 months ago

Table of Contents:


 

see also:  trade liberalization

 

NAFTA

 

Since NAFTA went into effect on Jan. 1, 1994, the historical record reveals that (1) U.S. economic growth has averaged more than 3 percent per year as the size of the U.S. economy has increased by more than 50 percent; (2) nonfarm payrolls in the United States have increased by more than 25 million jobs; and (3) the average U.S. unemployment rate declined from 6.6 percent during the 10 years (1984-1993) before NAFTA became effective to 4.9 percent during the latest 10-year period (1998-2007).  source

 

Does Free Trade lead to job losses at home?

 

Even if exaggerated claims that 100,000 jobs lost annually can be attributed to NAFTA are right, this figure is only six-tenths of one percent of the annual churn in the US job market, and this soundbite totally ignores the fact that an integrated and efficient North American economy preserves US production that would otherwise be outsourced to overseas plants.

 

Does free-trade lead to depressed wages at home?

 

As for the claim that NAFTA has depressed wages, increased trade has helped wages: Four of the top five US states, in terms of trade with Mexico, recorded nominal wage growth higher than the national average (49, 48, 45, and 28 percent by Texas, California, Arizona, and Illinois respectively, compared to the national average of 26 percent).

 

Does NAFTA increase the trade deficit of the USA?

 

Maybe, but critics charge that NAFTA has increased the US trade deficit with Mexico and Canada. But US energy imports account for two-thirds of this increased deficit, which translates to $81 billion less going to OPEC.

 

Does NAFTA lead to illegal immigration in the USA?

 

No.  Immigration to the US is caused by troubles finding work at home.  The real culprit is constrained job prospects in Mexico caused by factors unrelated to NAFTA—the peso crisis of the mid-1990s, the growth of the working-age population, and escalating drug wars.

 

 

Un-founded fears:

 

In the Ohio and Wisconsin Democratic primaries, 80 percent and 72 percent of voters, respectively, told exit pollsters that "U.S. trade with other countries loses jobs" — despite the reality of the post-NAFTA employment record.

 

Is NAFTA perfect?

No.  Of course not.  Recent free trade agreements reached with Peru and Colombia have improved on the NAFTA model with stronger provisions on labor and the environment.

 

Future opportunity:

An open market in energy services still does not exist in North America.

 

Border problems post 9-11

 

Post 9/11, the US decided to "secure its borders".  But, with a wall going up on one side, and increased security on the other, what has happened to NAFTA?  It is against this backdrop of more restricted borders, drugs-related violence and dying border tourism that companies in the region are trying to operate. Both US and Mexican businesses with cross-border trade complain about worsening bottlenecks to enter the US.

 

One reason for the breakdown of the common border culture is drugs. Since he took office in December 2006, Mexico's President Felipe Calderón has been fighting a bloody war with the country's powerful drug cartels.With violence on the increase - there have been more than 2,900 drugs- related murders in Mexico so far this year, compared with 2,275 for 2007 - many US citizens who used to hop across for the weekend have opted to stay at home.  Avenida Revolución in downtown Tijuana, which at weekends used to be full of US citizens looking for a wild time, is all but empty.

 

 

 

Links from Kookyplan

 

our kookyplan page on regional trading blocks

 

 

North America

 

Latin America

  • Mercosur

     

  • Andean Community:   Venezuela joined the Andean pact in 1973, with the promise of reducing trade and investment barriers for regional partners, but increasing barriers for outside countries, and effectively isolating the group from the rest of the world.   This fit in nicely with the theory of "dependency", and the desire to be independent from outside influence.   The Andean Pact included Venezuela, Colombia, Ecuador, Peru and Bolivia.    (But, Venezuela dropped out in retaliation when Peru signed a free trade agreement with the USA)
  • Union of South American Nations (União de Nações Sul-Americanas, Spanish: Unión de Naciones Suramericanas, and abbreviated as Unasur and Unasul)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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