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Has NAFTA proven beneficial to the American economy Explain - Essay Example

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It is an agreement between three countries namely United States, Mexico and Canada. NAFTA came in force on January 1, 1994 and its main objective was to enhance free trade between these three countries. As a…
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Download file to see previous pages United States also made certain alteration in their international trade strategies. As because of NAFTA, Mexico’s export increased to a significant amount and Canada became huge market for America. It has been claimed that NAFTA has been a success for all the member countries, but reality is little different. It is true that there are certain significant economic improvements that have taken place due to NAFTA, but that is one side of the coin as also there are certain major disadvantages of NAFTA which include job losses, problems regarding environment, declining standards of safety and health etc.
NAFTA’s major objective was to remove the trade barriers and increase free trade between its member countries. NAFTA, although, has improved the export growth of its member countries, but at the same time it has resulted into many critical economic as well as environmental problems for its member countries.
Among various disadvantages of NAFTA, most important one is the loss of jobs in United States. Manufacturers in United States, because of NAFTA, got the freedom of outsourcing or moving jobs to Mexico. Mexican labors are available at a cost which is much lower than that of American labor. As a result of this manufacturers shifted their production unit to Mexico, and rules in NAFTA allowed them to do so legally. This resulted huge job losses in manufacturing industry in US. Manufacturers, who continued their operation in US, reduced the salary of US workers. Almost 879,280 jobs were lost in US during the time period of 1994 to 2002. There was actually significant increase in job creation from 1994 to 2000. But from 2001 unemployment started to increase and by October, 2003 almost 2.4 millions people lost their job. Apart from manufacturing industry, other industries which moved to Mexico include textiles, electrical appliances, computer etc. States which were badly affected include Texas, California, Michigan and New York. Apart form these job ...Download file to see next pagesRead More
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