Prepared by : Wael Mohammed Yehia

Ahmed Emissiry
Islam Elmaghraby
Mohamed Mansi
Ingy Ali Ibrahim

Spring 2014 - Class A Weekends

International Business Track

29/8/2014

Historical Background
Objectives
Impacts
Challenges
Achievements

Tariff elimination for products

Before NAFTA, Mexican tariffs on U.S.-made

products were on average 250 % higher than
U.S. duties on Mexican products.
NAFTA Eliminate 50% of these tariffs
immediately and the remaining tariffs
eliminated gradually over 15 years.
The areas specifically covered by NAFTA are
construction, engineering, accounting,
advertising, consulting/management,
architecture, health-care management,
commercial education and tourism

Elimination of nontariff barriers

Mexico remove most of the import licenses,
which had acted as quotas to limit imports
from U.S. and other countries.
Also by 2008. Mexico open the border for U.S.
truckers and minimize border processing
requirements.
Eliminate Other Mexican barriers, such as
Local content requirements which is
permission to sell a product in condition it has
% cooperation of local parts or labor in it.

Protect the environment and labor by Side

Supplemental agreements

North American Agreement on Environmental

Cooperation (NAAEC)
- To ensure that the Mexico's increasing
in industrialization not Increase the pollution.
North American Agreement on Labor Cooperation
(NAALC)
- To protect Mexico's low wages from shifting the
U.S. companies Production to Mexico
But these agreements Didnt enforced.

Agricultural Trade More free trade in

agriculture

NAFTA has enforced a greater integration of the North

American agricultural sector for efficient use of
resources among them and more productivity as a
result.

After NAFTA, U.S. agricultural exports to North

America have grown rapidly to reach $30 billion per
year by 2005--up from $11.6 billion in 1996 .

Automotive Industry Tariff reduction for

motor vehicles and auto parts

Before NAFTA, U.S. motor vehicle exports to Mexico

faced local content requirements and also tariffs of
20 % Imposed on the Imports from the U.S.

After NAFTA, Eliminate these trade barriers and

lead that In 1996, the U.S. exported 51,000 new
cars and 31,000 new trucks to Mexico alone for a
value of $1.2 billion.

Textiles and Apparel Reduced textile and

apparel barriers

NAFTA has enabled U.S. producers to optimize

production and manufacturing investment in North
America as a result in a shift of production from the Far
East to North America and strengthening the industry's
worldwide position.

After NAFTA, The trade for the three NAFTA partners

has nearly doubled from $6.4 billion in 1993 to $12.4
billion in 1996.

Liberalized regulation of transportations

NAFTA Reduce the restrictions on international travel so

the Long distance truckers from each country are
permitted to drive across the borders.
The first Mexican drivers were allowed to operate in the
U.S. in October 2011.
NAFTA established the CANAMEX Corridor for road
transport between Canada and Mexico.
NAFTA also proposed for use by rail, pipeline,
and fiber optic telecommunications.

Increased protection of intellectual

property rights

NAFTA stated that, Mexico had to provide a very high

level of protection for intellectual property rights.
This is especially helpful in fields such as computer
software and chemical production. Mexican firms
will no longer be able to steal intellectual property
from companies and create a "Mexican" version of a
product.

US-Mexico relations have expanded into a close

political, social, and cultural partnership.

The increased movement of goods, services, and

individuals has created growing linkages

The exchange of ideas and

addressing common challenges.

NAFTA has fundamentally altered the North

American economic space, and increased the
global competitiveness of all three parties.

methods

in

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Real GDP Growth 1994 to 2005:

U.S.: 48%
Canada: 49%
Mexico: 40%

$2.2 billion in trilateral trade daily

Trade among the nations increased 173%

From $297 billion to $810 billion

Spring 2014 - Class A Weekends

International Business Track

6/7/2014

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Exports to NAFTA partners grew 113%

NAFTA partners account for 55% of
increase in agricultural exports
Industrial production rose 49%

28% in prior period

36.2% increase in business sector

productivity
20.1% growth in jobs
Average unemployment rate dropped from
7.1% to 5.1%

Spring 2014 - Class A Weekends

International Business Track

6/7/2014

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More than half of exports go to the U.S.

Exports now account for over 40% of GDP
Exports to U.S. increased by 250%
86.6% of total exports go to NAFTA partners
17.5% increase in jobs from pre-NAFTA
levels

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37% difference between wages in exportrelated sectors and others

Agricultural exports to U.S. increased by
$5.7 billion
Exports to Canada grew almost 227%
Two-way trade with the U.S. has grown
more than 125%
Productivity increased 55%

Spring 2014 - Class A Weekends

International Business Track

6/7/2014

19

Established in 1992, implemented in 1994, NAFTA

created a tri-national (Canada, Mexico, and the
United States) market area
more than 360 million people
combined annual purchasing power of about
$6.5 trillion.
Dismantles trade barriers for industrial goods, and
has agreements on services, investments,
intellectual property rights, and agriculture.
Side agreements on labor adjustments,
environmental protection, import surges, child
labor, minimum wages, productivity, and health
and safety standards.
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International Business Track

6/7/2014

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Early attempts were the Latin American Free

Trade Association (LAFTA) and the Central
American Common Market (CACM). Both failed
economically and politically.
LAFTA was superceded by the Latin American
Integration Association (LAIA), whose goal was
to increase bilateral trade among member
nations.
MERCOSUR was established in 1995 as an
organization to promote trade in South
America.

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International Business Track

6/7/2014

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Free trade blocs in

the Americas

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International Business Track

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Spring 2014 - Class A Weekends

International Business Track

29/8/2014

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