Week 5: NAFTA and the USMCA

Question 1

What is NAFTA?

Answer 1

The North American Free Trade Agreement, a trade deal between Canada, Mexico, and the United States.

Question 2

When was NAFTA first signed and by which US President?
A) In 2000 by Republican President Bush.
B) In 1998 by Democratic President Clinton.
C) In 1992 by Democratic President Clinton.
D) In 1990 by Republican President Bush.

Answer 2

C) In 1992 by Democratic President Clinton.

Question 3

When did NAFTA enter into force?
A) December, 1993
B) May, 1994
C) January, 1994
D) December, 1994

Answer 3

C) January, 1994

Question 4

Based on the “NAFTA and the USCMA” article, which is NOT the purpose of NAFTA?
A) Eliminating most tariffs on products traded between three countries
B) Focusing in liberalizing trade in agriculture, textiles, and automobile manufacturing
C) Promoting uniform economic policies and currency integration across the member countries.
D) Protecting intellectual property, establishing dispute resolution mechanisms, and implementing labor and environmental safeguards

Answer 4

C) Promoting uniform economic policies and currency integration across the member countries.

Question 5

What were the main goals of NAFTA?

Answer 5

To eliminate tariffs, liberalization of trade in agriculture and manufacturing, protect intellectual property, and impose labor and environmental safeguards.

Question 6

What was the economic impact of NAFTA on trade between the three countries?

Answer 6

Trade tripled among the three countries (Canada, Mexico, USA) with significant growth in cross-border investment.

Question 7

What did Trump renegotiate NAFTA to be?

Answer 7

Trump renegotiated it into the USMCA.

Question 8

How did President Trump view NAFTA?

Answer 8

He criticized it as the “worst trade deal ever made”.

Question 9

What was the USMCA?

Answer 9

The U.S.-Mexico-Canada Agreement. An updated version of NAFTA that took effect on July 1, 2020.

Question 10

What was one of the main benefits of NAFTA according to its supporters?

Answer 10

It created approximately 200,000 export-related jobs annually, which often paid more than jobs lost.

Question 11

What is NOT the goal of NAFTA?
A) Stronger and steadier economic growth to Mexico to discourage illegal migration
B) Ensuring that all member countries adopt identical labor and environmental laws.
C) Integration of Mexico with the developed, high wage economies of the U.S. and Canada
D) Lower-cost investment to enhance the competitiveness of U.S and Canadian companies

Answer 11

B) Ensuring that all member countries adopt identical labor and environmental laws.

Question 12

One major criticism of NAFTA in relation to Mexican farmers was:
A) It led to Mexican farmers benefiting from high global prices
B) It caused Mexican farmers to lose jobs due to increased competition
C) It resulted in better infrastructure for Mexican agriculture
D) It isolated Mexican farmers from global markets

Answer 12

B) It caused Mexican farmers to lose jobs due to increased competition

Question 13

NAFTA’s impact on Mexican wages and employment was mainly characterized by:
A) A significant rise in wages and reduced unemployment
B) An increase in high-paying jobs in rural areas
C) Job creation in automobile and manufacturing sector, but wages did not significantly rise, and unemployment persisted in agriculture sector
D) Equal wage growth across Mexico, the U.S., and Canada

Answer 13

C) Job creation in automobile and manufacturing sector, but wages did not significantly rise, and unemployment persisted in agriculture sector

Question 14

True or False The U.S. auto sector lost about 350,000 jobs, while the Mexican auto sector gained jobs.
True

Answer 14

True

Question 15

What was one of the unintended consequences of NAFTA mentioned in the document?
A) It created excessive reliance on oil exports from Mexico
B) It led to a rise in illegal migration to the U.S.
C) It reduced the economic dependency between the U.S. and Mexico
D) It strengthened the agricultural output of Mexico

Answer 15

B) It led to a rise in illegal migration to the U.S.

Question 16

What was NOT the impact of NAFTA on Canada?
A) A strong gain in cross-border investment
B) Canadian agricultural trade with the U.S. has tripled
C) Canadian manufacturing employment held steady
D) Canada became less dependent on trade with the U.S.

Answer 16

D) Canada became less dependent on trade with the U.S.

Question 17

What did Trump NOT aim to imply to improve the USMCA during negotiations?
A) Demanding more access to Canada’s highly protected dairy market.
B) Requiring Canada to reduce its environmental regulations.
C) Tightening rules about the percentage of auto parts that must be made in North America for tariff-free treatment.
D) Improving fair wages and conditions in the U.S., Canada, and Mexico to reduce job relocation to Mexico due to cheaper labor.

Answer 17

B) Requiring Canada to reduce its environmental regulations.

Question 18

The document suggests that the rise in illegal migration to the U.S. was influenced by:
A) Non-NAFTA factors affecting the Mexican economy
B) High tariffs imposed on Mexican goods
C) The weakening of U.S. immigration policies
D) A shortage of labor in the U.S.

Answer 18

A) Non-NAFTA factors affecting the Mexican economy

Question 19

What was NOT the impact of NAFTA on The U.S.?
A) Helped the U.S. auto sector compete with China through manufacturing auto parts in Mexico
B) Reinforced the globalization of the American economy
C) Lowered costs, increased productivity, and improved U.S. competitiveness
D) Increased manufacturing jobs in the U.S.

Answer 19

D) Increased manufacturing jobs in the U.S.