Free Trade Agreements: Mostly Good News for Nations Essay

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SAMPLE EXCERPT . . .
That potential block between the U.S. And the EU could generate up to $75 billion within two years for the two trading partners (Waterfield, p. 1).

What are the main advantages that the U.S. has realized from NAFTA? From 1993 to 2003, NAFTA enjoyed 38% economic growth; Canada had 30.9% economic growth and Mexico reported 30% growth. That was in the first ten years of NAFTA (Office of the United States Trade Representative).

There are a number of advantages that have been realized by NAFTA. The elimination of tariffs helps to reduce inflation because the cost of imports is lower, and the small businesses benefit from the reduced cost of trade (Amadeo, 2013). From 1993 to 2009, the trade between Mexico, Canada and the United States increased from $142 billion to $1.6 trillion (Amadeo, p. 1). And as for agricultural exports to Canada and to Mexico from the U.S. farming community, these increased from 22% "of total U.S. farm exports in 1993," to 30% by 2007 (Amadeo, p. 1).

Moreover, NAFTA has created a surplus in financial services and in healthcare, according to Amadeo on page 1 and 2. NAFTA boosted U.S. service exports to Mexico and to Canada from $25 billion in 1993 to $106.8 billion in 2007; the imports of those services into the United States were only $35 billion, hence, a surplus was achieved.

America imported $116.2 billion worth of oil products from Mexico and Canada, mostly as shale oil, Amadeo writes (p. 2). This reduces America's dependence on oil from the Middle East, and from Venezuela.

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What are the disadvantages of NAFTA? Amadeo writes that NAFTA has "made it possible for many U.S. manufacturers to move jobs to lower-cost Mexico." Also, many Mexican farmers were basically wiped out of business because of "U.S.-subsidized farm products" (because American farmers get government subsidies, they can produce crops cheaper than Mexican farmers can) (Amadeo, 2013, p. 1).

Essay on Free Trade Agreements: Mostly Good News for Nations Assignment

As to the movement of manufacturers to Mexico, Amadeo explains that between 1994 and 2010, the U.S. trade deficits with Mexico were $97.2 billion, which "displaced 682,900 jobs" (p. 1). Amadeo explains further though that about 116,400 jobs were lost after the year 2007, which could be attributed to the financial crisis and recession in America.

Another disadvantage was that wage growth was suppressed in the U.S. -- because some companies in America used the threat of moving to Mexico as a tactic to thwart union organizers. Hence, the workers had to decide between having a union or closing the factory, and they generally chose jobs, which hurt wages because union workers are generally better paid than non-union workers (Amadeo, p. 1).

Works Cited

Amadeo, K. (2013). Advantages of NAFTA. About.com. Retrieved August 9, 2014, from http://useconomy.about.com.

Amadeo, K. (2013). Disadvantages of NAFTA. About.com. Retrieved August 9, 2014, from http://useconomy.about.com.

Eiras, A.I. (2004). Why America Needs… [END OF PREVIEW] . . . READ MORE

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