Trades among NAFTA partners now account for more than 80 percent of the Mexican and Canadian and more than 33% of the US trades.
List at least 3 benefits of NAFTA?
Agriculture:
Canada and Mexico have been the top export markets for US agriculture. Since the implementation of NAFTA the share of Agriculture exports has risen from 22% to 30%. In the same manner Mexico has seen a steep rise in their agricultural exports to its NAFTA partners. Canada, from 1994 to 2001 has seen a rise of 95% of its agricultural exports to its partners. Canada on another perspective has seen the most advantage on this area. Canada is seeing NAFTA as a strong foundation for future growth and as a set of valuable example of the benefits of trade liberalization.
Labor Market:
US labor market is now employing 27 million more people from the date of the NAFTA`s implementation. Also, the unemployment rate has dropped 2%. However, some analysts agree that the agreement has been unfair to the US market since the partner countries don’t have as much labor and environmental standards. These analysts also agree that the US employees should be put into more direct competition. For mexico, unemployment is now higher than it was. Also for the farm markets it is harder for the farms to compete with subsidized US farm industry. Despite, this Mexican farms have tripled their exports, in farm industry, because of the reduced tariffs. Canada has also seen a steady rise in their labor market. The main reason for this was that there was a huge productivity gap between, the US and Canadian labors
Manufacturing Base:
US manufacturing output rose by 58% compared to the preceding 14 year period, before NAFTA.
Explain your opinion of the benefits and costs of regional economic integration?
With the NAFTA, US will have a better understanding in competition since both of their partners have strengths and weaknesses as well as the US. Compared to Canada, USA has better productivity rate, and compared to Mexico US labor is like a crying baby. In a liberalized trade market, the competition will climb to its peak but the regulations and laws in these countries also are night and day. A certain producer in Mexico can sell its products in Mexico but if they want to export it to the US they have to obey the regulations. These regulations, shouldn’t be seen as restraining, but to be seen as necessary for everyone`s benefits. If the producer in Mexico can sell its products to the US, this is a great advantage for them, since this means that they are actually doing better since they can fit into higher standards. Also, for some analysts, NAFTA has been implemented so that big corporation could plant their production sites to these countries so they could produce for less, which I do think they do have a certain point. The labor and manufacturing costs, as well as taxes are much lower in neighboring countries. This perspective, despite being a disadvantage on the US side, should be seen as a lesson to be taken. A direct competition with these markets should lead in decreasing the labor costs in the US. A growing liberalization and connections between these markets would actually be on the benefit of the US market since US has more programmed and better systemized productivity in most of its sectors and this is a competitive advantage as well as being a standard for the NAFTA partners to reach. In conclusion I think that having a liberalized trade, will be in the advantage of every stake holder in these markets with a higher competition rate. With a better competition, in my opinion the sleeping giant will be awaken, and to be awake is what the partnering countries are in need.