Nafta: North American Free Trade Agreement and Free Trade Essay

Submitted By Philippe17
Words: 1669
Pages: 7

On January 1st 1944, the North American Free Trade agreement between the U.S., Mexico and Canada was formed. NAFTA is the world’s largest free trade area which consist of 450 million workers. Each year NAFTA produces $17 trillion worth in services and products which makes NAFTA one of the most successful marketing agreements ever. Nonetheless, It has its pros and cons which well be listed further along in the paper. NAFTA increased in agriculture trade and has benefited farmers and ranchers throughout North America. The United States has invested twenty million dollars in technical exchanges and programs. Canada and Mexico were the first and second largest export markets for U.S. agriculture products in 2007. Between 1992 and 2007 the value of U.S. agriculture exports increased to sixty percent worldwide. During that same time, the U.S. farm and food exports grew to 156 percent. In 2007, the U.S. farm and food exports to Mexico exceeded to $11.5 billion, the highest ever for NAFTA. United States plantation and food exports to Mexico reached $3.6 billion to $10.8 billion. U.S. exports soybean, meats and poultry meat reached a record in 2006. U.S. lost agriculture market shares in Mexico since there was so much competition for the Mexican market. In 2007 America supplied more than 72% of Mexico’s total agriculture. Mexico’s imports to the United States which is red meat and poultry grew rapidly. NAFTA had kept Mexican markets open to the U.S. farm and food products in 1995. This time was the worst economic crisis in Mexico’s history. In 1995 U.S. agriculture products dropped to twenty-three percent. Agriculture has increased from $7.3 billion in 1994 to 20.1 billion dollars in 2006. Canada’s growing desire for the U.S. has reached a record of $11.9 billion in 2006. Fresh fruits and veggies, snacks and other foods account for close to three-fourths of U.S. Sales. Under the NAFTA, all non-tariff barriers to agricultural trade between the United States and Mexico were eliminated. In addition, many tariffs were eliminated immediately, with others being phased out over periods of 5 to 15 years. This allowed for an orderly adjustment to free trade with Mexico, with full implementation beginning January 1, 2008. The agricultural provisions of the U.S.-Canada Free Trade Agreement, in operation since 1989, were incorporated into the NAFTA. Under these provisions, all tariffs affecting agricultural trade between the United States and Canada, with a few exceptions for items covered by tariff-rate quotas, were removed by January 1, 1998. Mexico and Canada reached a different bilateral NAFTA agreement on market access for agricultural products. The Mexican-Canadian agreement eliminated most tariffs either directly or over 5, 10, or 15 years. Tariffs between the two countries affecting trade in dairy, poultry, eggs and sugar are maintained. NAFTA was a radical experiment; never before had a combination of three nations with such radically different levels of development been attempted. Plus, until NAFTA, “trade” agreements only dealt with cutting tariffs and lifting quotas to determine the terms of trade in goods between countries. Furthermore, NAFTA contained 900 pages of one-size-fits-all rules to which each country was required to perform all of its domestic laws - regardless of whether voters and their democratically-elected representatives had previously rejected the exact same policies in Congress, state legislatures or city councils. NAFTA requires limits on the safety and inspection of meat sold in our grocery stores; new patent rules that raised prescription prices; constraints on your local government’s ability to expand against sprawl or hazardous industries; and elimination of preferences for spending your tax dollars on U.S.-made products or locally-grown food. In fact calling NAFTA a “trade” agreement is misleading, NAFTA is an investment agreement. Its core provisions grant foreign investors a odd number of new rights and