Positive And Negative Effects Of The North American Free Trade Agreement On The United States
NAFTA has boosted Mexican agricultural exports to the United States, which have tripled since the pact was implemented. Hundreds of thousands of jobs in the automotive industry have also been created in the country and most studies [PDF] have found that the agreement has increased productivity and reduced consumer prices in Mexico. Nafta has been structured to increase cross-border trade in North America and stimulate economic growth for each party. The North American Free Trade Agreement (NAFTA) was a three-country agreement negotiated by the governments of Canada, Mexico and the United States, which came into force in January 1994. NAFTA eliminated most tariffs on goods traded between the three countries, with a focus on trade liberalization in agriculture, textiles and automobiles. The agreement also aimed to protect intellectual property, establish dispute resolution mechanisms and implement labour and environmental protection measures through ancillary agreements. However, the effects of NAFTA in the United States were often masked by the Boom and Bust cycle, which fuelled domestic consumption, investment and speculation in the mid and late 1990s. Between 1994 (the year of NAFTA) and 2000, total employment in the United States increased rapidly, bringing overall unemployment to a record high. However, unemployment began to rise in early 2001 and 2.4 million jobs were lost in the national economy between March 2001 and October 2003 (BLS 2003). These job losses were mainly concentrated in the manufacturing sector, which has seen an overall decline of 2.4 million jobs since March 2001. Employment growth in the economy is fading, the underlying problems caused by U.S.
trade deficits have become much more evident, particularly in the manufacturing sector. This represents a nominal increase of $1 trillion in trilateral trade of 258.5% since 1993, the actual increase – thus adjusted for inflation – of 125.2%. Some sources say that NAFTA exports have created 5 million new jobs in the United States. Most of these jobs were created in 17 countries, but all states saw some increases. Between 1993 and 1997, more than 800,000 jobs were created in the United States. Producers exported $487 billion in 2014. It generated $40,000 in export income for each worker. Bronfenbrenner updated its previous study with a new threat effects survey in 1998 and 1999, five years after NAFTA came into force (Bronfenbrenner 2000). In his updated study, Mr.
Bronfenbrenner found that most employers continued to threaten to close all or part of their operations while organizing routes, although unions have, over the past five years, relocated their organizational activities to sectors most affected by trade deficits and capital flight (. B clothing and textiles, electronic components, food processing and metallurgy). According to the updated study, the threat rate in the mobile industry, such as manufacturing, communications and wholesale trade, increased from 62% to 68%. In real estate sectors such as Demer, health and education, the threat rate was only 36%. Meanwhile, in 18% of union election campaigns, the employer directly threatened to travel to another country, usually Mexico, if the union succeeds in winning the elections.