Presentation on NAFTA

By:

E3
 INTRODUCTION
• The North American Free Trade Agreement (NAFTA ) is a
trilateral trade bloc in North America created by the
governments of the United States, Canada, and Mexico.


• Signed Dec. 17, 1992.

•
• Came into effect January 01, 1994.
•
• Agreement removes most barriers to trade and investment among
the United States, Mexico and Canada.


•
• Common technical product standards across NAFTA
•
• Stringent local content rules to prevent non-NAFTA firms
assembling goods in Mexico
•
• Third country products imported into one country can not
be re exported to other members unless some minimum
percentage of value addition has been done.
•
• For Canada and US- 50%
• For Mexico as high as -80%
•
 OBJECTIVES OF NAFTA
• Improve political relationships amongst the member
countries
•
• Help Mexico earn additional forex to meet its foreign debt
burden
•
• Decrease the flow of emigration from Mexico to the US by
providing them job opportunities.
•
• Create a stable and predictable environment for investors
•
The North American Agreement on
Environmental Cooperation (NAAEC)
•
• The Agreement creates a framework to better conserve, protect
and enhance the North American environment through
cooperation and effective enforcement of environmental laws.
North American Agreement on Labor Co-
operation (NAALC)
 Improve working conditions and living standards in each Party's
territory.

 Encourage cooperation to promote innovation and rising levels
of productivity and quality.

 Encourage publication and exchange of information, data
development and coordination.
.

 Foster transparency in the administration of labor law.

 PROVISIONS OF NAFTA
 NAFTA called for immediately eliminating duties on half of all
U.S. goods shipped to Mexico.

 Restrictions were to be removed from many categories, including
motor vehicles and automotive parts, computers, textiles, and
agriculture.

 The treaty also protected intellectual property rights (patents,
copyrights, and trademarks).

 Provisions regarding worker and environmental protection were
added later as a result of supplemental agreements signed in 1993.
BENEFITS

Benefit’s the importers by reduced or duty free goods.

Can make the exporter more competitive then other non-

participating countries

200% increase in trade among the 3 countries.

Increase market access within each country.
LIMITATIONS

 Negative impacts on farmers in Mexico who saw food

prices fall based on cheap imports from U.S. agri-business

 Negative impacts on U.S. workers in manufacturing and
assembly industries who lost jobs.

 Critics also argue that NAFTA has contributed to the rising
levels of inequality in both the U.S. and Mexico.

 Some economists believe that NAFTA has not been enough to
produce an economic convergence, nor to substantially reduce
poverty rates
 Thank You

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