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NAFTA impact on U.S.

Category: International Business Paper Type: Report Writing Reference: IEEE Words: 1500

        The time in which NAFTA, trade of U.S with the North America increasing and growing quickly as compared to the trade of U.S with the other part of the world. However, for the U.S export, the Canada and Mexico considered as the larger exporter of the U.S and contribute as the significant role in the development of the economy. Moreover, if the implementation of deal in the country will have positive impact on the economy growth of U.S. Moreover, it increases the dollar that improve the economy of country. Furthermore, the cost of different industries is also considered in which benefits of NAFTA are provided in the society at each level.

        As the supporters of NAFTA provide different suggestions in which they described the efficiency as it provides the opportunities of jobs regarding to trade within the Mexico and Canada. Th jobs of exporting the goods under this agreement are efficient as it has more than one thousand employees that perform effectively. But due to the replacement of this agreement the loss of jobs of large number of employees and country suffered economically 

        Although, this trade has positive impact on the economy of growth but due to the failure of this agreement, the workers and labors blaming this agreement as it reduce the number of jobs in the U.S. Moreover, in 1994 more than 250,0 jobs were lost in the automobile sector which is the largest industry that also disturb the economy of country. Furthermore, in Mexico loss of jobs ranges from 120,000 to 55,000 and workers faced financial problems in automobile industry. According to the researchers of econometric, the trade system put the pressure of wages on the workers having low education as well as the workers with low education suffered a lot of problems and unable to survive in the competitive environment of the business world in the Mexico due to lack of knowledge and technical skills 

        According to the explanation of economists that this agreement has no worst impact on the manufacturing industries of U.S but have little impact on the growth of industries and the stress that is bear by the manufacturing industries of U.S before the evolution of this agreement. The writers published their findings in the book in 2016, in which they described that the competition with the china also disturbed the job status of U.S and it effect the growth of U.S during the 2001 when China was attached with the WTO.

        However, the economist and trade expert Hanson in the California University explained about the condition and status of job in manufacturing industries which is declined quickly as it declines from seventeen to eleven million during a short period of time which is also overcome by developing trade business with China and its new technologies. According to the writer, china is on the top of list in which employees effected during the year of 2000 and on the second position in relation to the advancement in the technology. Moreover, NAFTA has no importance said by the researchers.

        According to the point of view of economist Hanson, NAFTA play its significant role as to provide a chance to compete the U.S with China in the automobile sector of country. The supply of goods across the border under the NAFTA that reduce the cost of goods, enhanced the productivity of country as well as it provides the competitive edge to the U.S. The writer discussed that the position of jobs changed in Mexico and people suffered from this change in terms of loss. Moreover, the regional industry is developed into Mexico in which transfer of goods occurred. Furthermore, manufacturing industries are also existing in these countries that play significant role in the economy of country. All these facilities and connections related to automobile industry of U.S could not access without the tariffs of NAFTA that provide protection for the property 

    The senior fellow Edward Alden at Council describe the pressure on the trade deals that is increasing rapidly due to the lack of opportunities that are in the favor of labor which improve the productivity of labors as lack of balance within the income of labors according to the demand. So, it is necessary to develop pace between the trade deals for the efficiency of performance as well as the economic growth of country.

U.S. Jobs Were Lost of NAFTA Impact on Member Country

        The labor of Mexico is cheap, and the part of manufacturing industries attached with the U.S with the high cost. However, during the period of 1994 to 2010 where U.S connected its trade deals with Mexico having the total amount of $97.2 billion as well as in the same duration jobs were also shifted towards the Mexico which is 682,900 but in the 2007 out of these 116,400 jobs were displaced. Moreover, during the 2008, financial crisis was faced due to their inefficient activities that lead towards the huge loss of manufacturing industries. The most effected countries from this financial crisis are Texas, California and others as these countries have the large number of industries which is then moved these industries towards Mexico. The industries which suffered from loss and then moved to Mexico are the industry of electrical appliances, textile, computer and automobile industry [3].

U.S. Wages Were Suppressed of NAFTA Impact on Member Country

        However, all the manufacturing industries not shifted towards the Mexico and then only industries moved that had threats regarding to the performance. The workers had choose union among the losing factory and joining the union because without the union the bargaining power of worker had been reduced in which the salary packages also effected. During the period of 1993to 1995, most of the U.S more than 40 percent manufacturing industries had been shifted towards the Mexico due to the threat of sealing the industry. Moreover, the pattern of shifting industries towards Mexico increased up to 60 percent during the year of 1999.

NAFTA impact on Mexican of NAFTA Impact on Member Country

        The agreement NAFTA enhance the productivity of the Mexican when implemented in an effective way. As it provides the large number of jobs within the country as this agreement develop positive impact on the economy of country. Moreover, the policymaker of Mexican under this agreement develop balanced and stabilized that enhance the performance of country. But the country suffered during 2008 due to its dependency on the U.S market and it was reduced continuously and reached the loss of 17 percent that exceeded the amount which was invested in the contract. Although country faced difficult situation, but it stabilizes its economy during the year of 2010and expanding its GDP during the year of 2014 and 2015 [4]. However, the experience of Mexico about the NAFTA was not good, and it suffered from the problems. As its supporters did not fulfill the requirements and the level of poverty remain same which is not positive impact on the growth of Mexico [5].

Mexico's Farmers Were Put Out of Business

        The implementation of NAFTA leads towards the lost of jobs in farm in Mexico then in 2002 the farm bill was introduced that improve the economy growth of country. Moreover, after the removal of tariffs over trade the export of agricultural products below the average cost of product. But the farmers of Mexico due to lack of knowledge did not compete the farming methods. Furthermore, Mexico provide the different subsidies to their farmer to improve the performance of economic growth.

Maquiladora Workers Were Exploited of NAFTA Impact on Member Country

        Moreover, the NAFTA extended its program as removing the tariffs and it is known as Maquiladora. According to this program the products were sent back to the U.S having cheap quality and 30 percent of employees from the Mexican. As the workers faced problems as they lack of required and basic facilities that employees were deserved. The working hours of labor are extended and not paid according to their work hours [6]

NAFTA Called for Free U.S. Access for Mexican Trucks

        The agreement with the NAFTA was not implemented at the same time and according to NAFTA, trucks would allow to travel from Mexican to U.S within the available standard limits. The department of Transportation review the projects that had been canceled by the house of representatives as it forbidden the DOT without the permission from congress. Moreover, the congress protected the Mexican and worried about the hazards of road. But these protective standards were not implemented in the U.S regarding to trucks and the driver of trucks against these standards as it was the loss of their business. So, the transfer of goods from Mexico truck is completed 20 miles and they transferred their good to U.S trucks. The NAFTA also in the favor of U.S trucks as they permit the unlimited travelling of trucks 

References of NAFTA impact on U.S. 

AMADEO, K. (2018, November 15). Six Problems With NAFTA. Retrieved from https://www.thebalance.com/disadvantages-of-nafta-3306273

Bondarenko, P. (2013, December 9). NAFTA’s Impact on U.S. Workers. Retrieved from https://www.epi.org/blog/naftas-impact-workers/

Bown, & P, C. (2018, October). The 5 surprising things about the new USMCA trade agreement. Retrieved from https://www.washingtonpost.com/news/monkey-cage/wp/2018/10/09/the-5-surprising-things-about-the-new-usmca-trade-agreement/?utm_term=.dc98a7c61d53

Bown, C. P. (2017, May 18). What is NAFTA, and what would happen to U.S. trade without it? Retrieved from https://www.washingtonpost.com/news/monkey-cage/wp/2017/02/15/what-is-nafta-and-what-would-happen-to-u-s-trade-without-it/?utm_term=.831e0482317d

Cfr.org. (2018, October 1). NAFTA’s Economic Impact. Retrieved from https://www.cfr.org/backgrounder/naftas-economic-impact

Floyd, D. (2018, October 10). NAFTA's Winners and Losers. Retrieved from https://www.investopedia.com/articles/economics/08/north-american-free-trade-agreement.asp

Livingstonintl.com. (2017, August 29). Modernizing NAFTA: A Look At Key Issues. Retrieved from https://www.livingstonintl.com/modernizing-nafta-look-key-issues/

 

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