Advantages of NAFTA

NAFTA Reduced Tariffs

A tariff is the tax placed by the national government on an exported or imported service or
good to discourage or encourage trade. The reduced trade restrictions introduced by NAFTA
enabled the Americans easy purchasing of Mexican and Canadian goods. Particularly, the
United States acquires much of its vehicles, gold, crude oil and machinery from the two
countries. This is along with its fresh products, red meat, live animals, snack foods, and
frozen and chilled foods.
The Three Countries Take Advantage Of Real Income Increases
Based on the article of Washington Post, a study conducted by three economists of Federal
Reserve demonstrated that NAFTA boosted incomes within the United States by 0.17 percent,
in Mexico by 1.3 percent and in Canada by 0.96 percent.
Increased Of Trade Between, Canada, Mexico and the United States
NAFTA has been recognized for hugely increasing trade between Canada, Mexico and the
United States. Trade of services and goods between these three countries has elevated from
$337 billion during the year 1993 up to $1.182 trillion during the year 2011.
Provided More Employment Opportunities for the US Workers
Based on the Chamber of Commerce of the United States, the increased trade because of
NAFTA supports nearly five million jobs in the United States alone.

Disadvantages of NAFTA

Less Benefits To Mexican Workers Than Expected

Though NAFTA encouraged huge US investments within Mexico, much of it has been used
to establish factories in which Mexican workers offer cheap employment to make US goods.
The agreement has failed in its aim of increasing the middle class size of Mexico since Asian
labor proves to be more affordable.
Increased Tariffs Yet Not Regulations
NAFTA might have removed tariffs between the three nations, yet it did not do away with the
number of customs regulation which might stifle trade. Origin regulations rule decide if a
good is qualified for trade under the guidelines of NAFTA, while exporters should
accomplish origin certificate paperwork. In simple words, even with less or no tariffs, still
there are a number of government-imposed obstructions to trade.

Some economists argue that NAFTA has been beneficial to business

owners and elites in all three countries, but has had negative impacts on
farmers in Mexico who saw food prices fall based on cheap imports from
U.S. agribusiness and negative impacts on U.S. workers in manufacturing
and assembly industries who lost jobs.

Other economists believe that NAFTA has not been sufficient (or worked
fast enough) to produce economic convergence, nor to substantially
reduce poverty rates.