The Problems with NAFTA Not Helping Economies Essay

The Problems with NAFTA Not Helping Economies The free trade argument states that, if each nation produces what it does best and permits trade, over the long run all will enjoy lower prices and higher levels of output, income, and consumption that could be achieved in isolation. The North American Free Trade Agreement (NAFTA), started in January of 1994, created a situation in North America in which there are no taxes on most products imported and exported between the three countries. Ideally, the governments of Canada, the U.S. and Mexico believed that breaking the trading barriers would increase jobs and other things as it improved each of their economies. NAFTA, however, has not necessarily helped the economies in†¦show more content†¦This has been seen to be case with the United States. Although U.S. exports to Mexico have grown since NAFTA went into effect, the Clinton Administrations own numbers showed that imports from Mexico have gone through the roof; a U.S. trade surplus of $1.7 billion in 1993 spiraled downward into a deficit of $15.4 billion by 1995 (Carbaugh). Not only has NAFTA caused a loss in jobs in all three countries, but it has also caused a decrease in job benefits for workers in Canada and the United States. Before NAFTA went into effect, the corporate group USA*NAFTA claimed that NAFTA itself will improve working conditions by generating economic growth, which will enable all three countries to provide more jobs with higher pay in a better working environment(Carbaugh). However, this proved not to be the case. In actuality, NAFTA has given corporations more power to lower wages and decrease working conditions. The most direct method is through whipsaw bargaining, or threatening to shift production to Mexico unless workers agreed to concessions (Dentzer). In a situation where ones job is at risk, one must accept wage and benefit cuts. It seems as though since the implementation of NAFTA, undermined workers rights. Even though productivity growth has occurred in many co rporations, In Canada, as well as in the U.S., real wages are sluggish and the amount of full-timeShow MoreRelatedPros and Cons of NAFTA Essay1603 Words   |  7 PagesNAFTA is a trade agreement signed by the North American nations of Canada, Mexico and the US. In terms of combined GDP between the countries, it has created the largest trade bloc in the world. The NAFTA is a result of many years of negotiations, starting in 1986 under President Ronald Reagan, and finally signed on the 17th of December in 1992 under President George H. W. Bush. It became fully implemented in 2008 under President Barack Obama. 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