8.5: Regional Economic Integration in the Americas Flashcards
What economic agreement in the Americas was noted as significant in the attempts at regional integration and has been superseded by CUSMA?
The North American Free Trade Agreement (NAFTA) is the significant agreement in the Americas that has been superseded by the Canada-United States-Mexico Agreement (CUSMA).
What was the primary goal of the original NAFTA agreement?
The primary goal of NAFTA was to eliminate all tariffs on bilateral trade between Canada and the United States by 1998 and among Mexico, Canada, and the United States by 2004.
What are some key contents included in NAFTA?
Key contents of NAFTA included the abolition of tariffs on most goods, removal of barriers to cross-border services, protection of intellectual property rights, and establishment of commissions for environmental and labor standards.
What were the proponents’ arguments in favor of NAFTA?
Proponents argued that NAFTA would create an enlarged and more efficient productive base for the region, move production to Mexico where labor costs were lower, benefit Mexico through investment and employment, and allow the U.S. and Canada to compete better with Asian and European rivals due to lower prices of products made in Mexico.
What was the argument against NAFTA by its opponents?
Opponents of NAFTA, like Ross Perot, argued that it would lead to a mass exodus of jobs from the United States and Canada to Mexico due to Mexico’s lower wages and less strict environmental and labor laws, which most economists found to be an exaggerated and implausible claim.
What was the overall impact of NAFTA according to studies?
NAFTA’s overall impact was small but positive, aimed to increase trade among the member states, which it appears to have done.
How did NAFTA affect U.S. trade with Canada and Mexico?
By 2017, U.S. trade with Canada and Mexico grew from 25 percent to over 40 percent of total U.S. trade, and these countries became top trading partners of the U.S.
What was the employment impact of NAFTA in the United States?
Employment effects of NAFTA in the U.S. have been moderate to small, with estimates of around 850,000 jobs lost due to NAFTA from 1993 to 2013, but also significant job creation in the same period.
How did NAFTA affect labor productivity in Mexico?
Labor productivity in Mexico increased by 50 percent in the first 10 years after NAFTA was in place
What were the welfare effects of NAFTA for the member countries?
The U.S. and Mexico saw small welfare gains, while Canada experienced a small welfare loss; however, real wages increased for all NAFTA members.
What is CUSMA and how does it differ from NAFTA?
CUSMA, the new NAFTA, changes the content threshold for zero tariffs in the automotive industry to 75 percent and may result in trade diversion and higher costs for North American automobile producers and consumers.
What were the initial goals of the Andean Community and why did they struggle?
The Andean Community aimed to create a common market and reduce tariffs but struggled due to political and economic issues, such as low economic growth and hyperinflation.
How was the Andean Community revived?
The Andean Community was revived with the Galápagos Declaration in 1990, leading to the establishment of a free trade area by 1992 and customs union by 1994, but it has yet to achieve a common market.
What are the origins of Mercosur and its initial success?
Mercosur originated in 1988 to establish a common market between Brazil and Argentina, leading to a significant increase in trade and economic growth among its members in the 1990s.
How did Mercosur expand and what challenges has it faced?
Mercosur expanded to include Paraguay and Uruguay and later Venezuela, which was suspended in 2016. The pact’s aim for a customs union has not yet been fully achieved.
Map of Economic Integration ing the Americas
