factors affecting glob: trade agreements : NAFTA Flashcards
when was NAFTA established?
1994
what are the countries involved?
Mexico, USA , Canada.
what was it replaced by in 2020?
UMSCA -> the United States Mexico, Canada Agreement.
why did Mexico join?
- got into debt in the 80’s
- wanted to clear debt + boost econ growth by joining (essp bc USA was global superpower).
what were the 4 main aims?
- gradual elimination of ALL trade barriers
- promote econ growth between the 3 areas.
- increased investment opps
- general improved coorp b/w the 3 member states + even trading competition.
what has been said in support of NAFTA?
+ trade has 3x from $300bn —> $1.1T b/w 1993- 2015.
+ Mex now receives 4th highest FDI. as TNCs est manuf plants in mex to gain access to mex market
+ mex workers receive higher wages + increased sales from agriculture.
+ Manuf grew into the USA w/ increased employment.
why has Nafta been criticised?
- some CAN countries closed due to high comp from low cost US firms
- some US firms have relocated to Mex , ie GM motors to gain access to cheaper labour market –> reduced jobs in USA (DT, ow the capital city of the Rust Belt”.
- Food surpluses often dumped in Mex from USA + CAN reducing food prices and thus local famers + agri cant compete.
- Mex also exploited bc of natural resources + less stringent pollution laws
- US take adv of the cheap labour force + low cost factories known as maquiladoras which offer tariff + duty free production for US firms —> unethical bc workers get low pay + conditions can be unregulated
what did nafta do that is particularly impressive?
they created the worlds largest free trade area of $450 million people.
in 2015 -> what % of Canadian exports went to USA?
74%
what % of USA exports went to CAN + MEX in 2015?
30%
what % of Mex exports went to USA in 2015?
70%
+ve , how did the value of trade change b/w 1993 - 2015?
from $300bn to $1.14T
