The
influence of NAFTA
12H2013 Yukino Ebina
In
these days, many countries are trying to combine with others in economics
because it is essential to create much benefit and poverty. Thus there are a
lot of regional communities across the border. Especially, NAFTA has the
powerful influence not only North America but also all over the world. NAFTA is
the treaty that was concluded among Canada, the U.S. and Mexico. These
countries started to negotiate about the agreement in 1994 and it had spent 14
years to be implemented. The treaty eliminated the tariff to trade their
products. The arrangement was admired most of areas. In 1993, the amount of the
trade was $290 billion among three countries. Thanks to the treaty, it
increased more than $1.1 trillion in 2012. It is said that The U.S. trades more
in goods and services with Mexico and Canada than it does with Japan, South Korea, Brazil, Russia,
India, and China combined.
This result shows the business within NAFTA occupies large part of the
whole trade in three country. The treaty contributes to revitalize the trade
among these countries.
Though
this agreement acts on promotion of the trade, it also causes harmful influence
to the external economy for both countries between the U.S. and Mexico. For
instance, many companies in the United States have moved to Mexico because they
prefer cheaper labors. It is because the treaty allows them to be multinational
companies and expand their business across the border. This moving causes about
700,000 jobs loss in the U.S. Furthermore, these corporations force their labor
to agree being cut the wage. The companies threatened workers to relocate to
other countries if they were not obey cutting their salary down. These
corporations also frighten the local government to reduce their tax as the same
reason. In these points, the treaty is profitable for the multinational
companies. On the other hand, the agreement is disadvantage for the small
sectors such as local farming. For instance, the United States have been
protected the price of agricultural products for a long
time and the government subsides approximately $16.5 billion of funding every
year to suspect the price. Then the gap of the price appears between Mexico and
the U.S because it is not rectified by the tariff. This caused the price down
of the crops in Mexico and it became difficult to continue their farming. Furthermore,
the number of Mexican migrant to the U.S has been increasing after the treaty
to search their job. In these points, small sectors such as farmers or labor
are caused the damage because of NAFTA. Moreover, increasing the number of
people who are suffering from the poverty tends to caused organized crime like
smuggling arms and illegal substances. This means the poverty caused by the
treaty bring on the multinational crime.
In
conclusion, the NAFTA have a great power and influence to both internal and
international economy. The treaty is profitable for the multinational
corporation and unfavorable for the local business. Today, many countries are
negotiating to join the regional agreement such as Trans Pacific Partnership
including Japan. These treaty have been increasing because many countries are
interested in improving their economy. NAFTA is seen as a pioneer of these
treaty and we have to think about both of positive and negative aspects.
Reference lists
Mohammed Aly
Sergie, NAFTA’s Economic Impact, 2014
http://www.cfr.org/trade/naftas-economic-impact/p15790 , Council onForeign
Relations, February 14
Jeff Faux, NAFTA’s
Impact on U.S. Workers, 2013 http://www.epi.org/blog/naftas-impact-workers/,
Economic Policy Institute, December 9
Susana G. Baumann,
Agricultural Subsidies Impact on Mexican farmers, 2014
http://voxxi.com/2013/01/11/agricultural-subsidies-mexican-farmers/, VOXXI, January
1
Laura Carlsen,
Under Nafta, Mexico Suffered, and the United States Felt Its Pain 2013
http://www.nytimes.com/roomfordebate/2013/11/24/what-weve-learned-from-nafta/under-nafta-mexico-suffered-and-the-united-states-felt-its-pain,
The New York Times, November 24
