NAFTA

NORTH AMERICAN FREE TRADE

AGREEENT

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 WHAT IS NAFTA?
• The North American Free Trade Agreement
(NAFTA ) is a trilateral trade bloc k in North
America created by the governments of the
United States, Canada, and Mexico.

• The agreements were signed in December

1993 by the presidents of the three countries
and it came into effect from 1st Jan. 1994.

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 AMENDMENT

• Final provisions (NAFTA) were fully implemented on

January 1, 2008.
• NAFTA one of the most successful trade agreements
in history and has contributed to significant increases
in agricultural trade and investment.
• Most comprehensive Regional Trade Agreement
signed by the United States.

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 TRADE AND INVESTMENT EFFECTS
• NAFTA is a broad agreement.
• From 1994 to 2008, U.S. exports to Mexico rose 91%,
compared to 41% to the world. U.S. imports
increased by 179%, compared to 89% from the
world.
• After fourteen years, most tariffs have gone to zero,
except for some very sensitive (mostly agricultural)
goods that have limited protection for up to 15
years.

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 NAFTA SUPPLEMENTS

• The North American Agreement on

Environmental Cooperation (NAAEC)

• The North American Agreement on Labour

Cooperation (NAALC)

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 NAFTA IN PERSPECTIVE
• U.S. two-way trade with Canada and Mexico
exceeds U.S. trade with the European Union
and Japan combined.
• In fact, US trades more with Maxico in a month
than trade with other countries in a year. US
exports more to Mexico in a day than with
Paraguay in a year.
• US exports more in a week with Canada than
with Central America in a year.

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 U.S. TRADE IN PERSPECTIVE2008

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 TOP TEN COUNTRIES WITH WHICH THE
U.S. TRADES

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 EFFECTS OF NAFTA
• BENEFITS.

• LIMITATIONS.

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 BENEFITS
• NAFTA eliminates trade barriers.
• Benefits the importers by reduced or duty free
goods.
• No MPF from Canada for NAFTA goods.
• Can make the exporter more competitive then
other non-participating countries.
• 200% increase in trade among the 3 countries.
• Increase market access within each country.

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 U.S. – NAFTA TOTAL TRADE1994-2008

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 LIMITATONS
• It has negative impacts on farmers in Mexico who saw food prices
fall based on cheap imports from U.S. agribusiness.

• It has negative impacts on U.S. workers in manufacturing and

assembly industries who lost their jobs.

• Critics also argue that NAFTA has contributed to the rising levels
of inequality in both the U.S. and Mexico.

• Some economists believe that NAFTA has not been enough (or
worked fast enough) to produce an economic convergence, nor to
substantially reduce poverty rates.

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 KEY NAFTA PROVISIONS

• Sanitary and Phytosanitary Measures

• Export Subsidies
• Internal Support
• Grade and Quality Standards
• Rules of Origin

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 NAFTA COMPLIANCE TEAM
• three persons’ team dedicated to resolving nafta
market access and compliance cases.

• team leader, mexico and canada desk officers

• the team combines experience in understanding nafta

regulations with specific country expertise

• try to resolve problems by persuading foreign country

to come into compliance voluntarily, avoiding time and
effort involved in formal dispute settlement

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 PUBLIC OPINION

• Public opinion towards NAFTA in the United States,

Canada, and Mexico is mixed. A survey conducted by
CIDE and COMEXI in Mexico showed that 64 percent
of the Mexican public favored NAFTA.
• The Program on International Policy Attitudes
reported in a poll that 47 percent of Americans
thought that NAFTA has been good for the United
States, while 39 percent thought it had been bad for
the country

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 IMPACT ON JOBS
• The studies indicate that the reduction in net exports to
Mexico has eliminated 227,663 U.S. job opportunities since
1993, and the reduction in net exports to Canada has
eliminated 167,172 job opportunities in the same period. In
total, NAFTA resulted in a net loss of 394,835 jobs in its first
three years.
• The analysis has found that NAFTA has eliminated significant
numbers of jobs for women and members of minority groups,
as well as white males. Between 1993 and 1996, women lost
141,454 jobs to NAFTA, blacks lost 36,890 jobs, and Hispanics
lost 22,520 jobs, numbers closely reflecting these groups'
shares in manufacturing industries

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 RECENT NAFTA NEWS
• NAFTA Toll Highway Destroying Prime Agricultural Land
 The Trans-Texas Corridor (TTC) is no ordinary highway. The toll road
would be four football fields wide. It includes separate lanes (up to six
for automobiles, four for large trucks), plus tracks for freight trains,
separate tracks for high-speed and commuter rail, also space for oil
and gas pipelines, electricity wires, and broadband transmission
cables.
 The implications of this scheme are staggering. Some experts say that
up to a million people in Texas stand to lose their homes and 584,000
acres of rich farm and ranchland are to be destroyed, all for a privately
funded highway.

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 CONCLUSION
• NAFTA is one of the most successful treaties of the times in
terms of growth in trade i.e. imports & exports , G.D.P etc.
but on the other hand it is also responsible for causalities like
loss of jobs, migration, rising level of inequality and many
others.

• Thus it is important that the treaty should be carried forward

concerning about taking steps for the problems originated
due to NAFTA ,otherwise it will create inequality in many
terms which can lead to bad conditions in future for all the
three countries.

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