Term Paper: North American Free Trade Agreement

Pages: 8 (2306 words)  ·  Bibliography Sources: 1+  ·  Level: College Senior  ·  Topic: Economics  ·  Buy This Paper


[. . .] "The logic of Western Hemisphere free trade also rests in part on the dominant role of the United States in exporting to countries in this hemisphere. For the hemisphere as a whole, excluding Canada and Mexico, the United States is the beneficiary of about 40% of hemispheric imports, although the precise percentage varies from year to year. By contrast, U.S. exporters capture only between 15 and 25% of European and Asian markets" (Weintraub 39).

NAFTA has also had an impact on the environment. First, Mexico's environmental protection laws are not as strict as the United States, so manufacturing firms moving to Mexico do not need to meet as stringent requirements for production and waste. This means Mexico's environment has been degrading. Second, the border between Mexico and the United States and Mexico has continued to deteriorate. NAFTA did not keep Mexican workers in Mexico; record numbers still cross the border legally and illegally every year. Because of this, the border has continued to become more of a battle zone, with increased fencing, vigilance, and lighting, degrading the atmosphere and landscape around border towns dramatically. "With respect to environmental conditions, it is clear that the major problems exist on the U.S.-Mexican border where conditions are visibly deplorable and have not markedly improved since NAFTA's implementation. However, it is important to note that environmental management on both sides of the U.S.-Mexican border is a process increasingly subject to international agreements and evolving patterns of transborder cooperation" (Clement et al. 293).

Clearly, the textile and apparel industry has been one of those most highly affected by NAFTA in the U.S. And Mexico. Because of the heavy trade in these areas, trade was "liberalized," earlier than expected - tariffs were reduced earlier than originally planned. "In other words, because there has been a shift for U.S. producers to source textiles from Mexico rather than Asia, Mexican textiles and apparel exports to the U.S. have grown more each year than from any other country. Since 1995, such exports have doubled. In 1997, U.S. apparel imports from Asia amounted to 36% of the total, while Mexican and Caribbean imports accounted for 39%" (Clement et al. 297).

While NAFTA has created more trade between Mexico, Canada, and the United States, it has come at a heavy cost. Some estimates show the loss of at lease 750,000 jobs in the manufacturing sector alone, since NAFTA's inception in 1994. Others estimate the jobs lost could be much higher. These losses create a "trickle down" effect in the U.S. economy. As workers earn less, they spend less, which creates less need for products and services. More and more industries are affected as people throughout the business sector begin to spend less money. We have seen this sharply in effect since the terrorist attacks of September 11th across the U.S. economy. "Unemployment, however, began to rise early in 2001, and, if job growth dries up in the near future, the underlying problems caused by U.S. trade patterns will become much more apparent, especially in the manufacturing sector" (EPI).

Many pubic policy institutes see NAFTA as a failure that is costing the country unknown dollars, and wonder about the future of the agreement, especially now that the United States' economy has taken such a downturn.

However, even measured against the more lenient 'do no harm' standard, NAFTA has been a failure. Using trade flow data to calculate job loss under NAFTA (incorporating exactly the formula used by NAFTA's backers to predict 200,000 per year NAFTA job creation) yields net job destruction numbers in the hundreds of thousands. Whether the loss of hundreds of thousands of jobs qualifies as 'a giant sucking sound' depends on the ear of the listener. It is clear, however, that NAFTA has indisputably led to widespread job loss, with over 363,121 U.S. workers certified as NAFTA casualties under just one narrow government program. The fact that job growth totally unrelated to NAFTA has produced a net gain in U.S. employment during this period in no way changes the reality that NAFTA has cost large numbers of individual workers their jobs,- most of whom are now unemployed or working at jobs that pay less than the ones they lost" (Editors).

Works Cited

Clement, Norris C., et al. North American Economic Integration: Theory and Practice. Northampton, MA: Edward Elgar, 1999.

Editors. "NAFTA and Workers' Rights and Jobs." Public Citizen.org. 2002. http://www.citizen.org/trade/nafta/jobs/

Gianaris, Nicholas V. The North American Free Trade Agreement and the European Union. Westport, CT: Praeger Publishers, 1998.

Rosenberg, Jerry M. Encyclopedia of the North American Free Trade Agreement, the New American Community, and Latin-American Trade. Westport, CT: Greenwood, 1995.

Salas, Carlos. " NAFTA at Seven: Its Impact on Workers in all Three Nations." Economic… [END OF PREVIEW]

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