The Pros And Cons Of NAFTA
After the seven goals that NAFTA planned on striving towards were in affect the next agenda was to cover the benefits that this agreement offered. In the formation of NAFTA what ended up becoming the key resources for America were new jobs, more imports, and exports. The new setup and way NAFTA was to operate planned to allow a new pocket of income and job opportunity for the economy. In relation to the job opportunities that were presented the US themselves were going to boost the workforce 200,000 new jobs in the course of two years (Fontinelle, 2018). Even though that seemed a substantial jump in five years the projected jobs were going to grow towards one million. The stats produced by our government and its economist ended up seducing those who doubted or speculated its chances of being successful and thus the majority joined in on endorsing it. Besides the job explosion which was foreseen this new reduction in tariffs was going to bring an influx of resources to the land of the free. Imports were to stream in in the form of crude oil, machinery, gold and vehicles. As for the
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consumable goods we were to receive it involved supplementary livestock, fresh produce, and processed foods (Fontinelle, 2018).
NAFTA had a groundbreaking impact on Mexico, Canada and especially the US An increase in trade grew in abundance from this new agreement.
The North American and southern region was able to triple trade amongst each other (NAFTA Economic Impact). Following the increase in trade a vast amount of economic growth surged behind it. Prospering from this joint agreement all three countries had the chance to be able and reap the benefits of their economies new growth. At the time the United States GDP went up 0.5% which equated to 80 billion dollars overall or in laments terms a few billion dollars a year between the years of 1993-2016 (NAFTA Economic Impact). To accent the increased trade and economic growth between each country a new wave of higher wages prevailed. Even though the US loses thousands of jobs annually, 200,000 compensate those lost paying 15-20% more (NAFTA Economic
Impact).
Another positive view point that has to be mentioned and addressed is one the development of a more competitive US Auto Industry because of supply chains (Floyd, 2018). Supply chains fostered in the chance for expansion whereas before NAFTA the US had a much smaller span of supply chains compared to after the agreement was enacted. With the trade agreements allowing offshoring it was basically inevitable that some major corporations relocated jobs, what was then unaccepted now had acceptance. Although we may lose 15,000 jobs annually our economy can gain an approximate 450,000 in economy gains, this including higher productivity with lower consumer costs (NAFTA Economic Impact). While the economy was able to see gains economically the consumers in the nation also had the chance to benefit. Due to a greater number of the nation’s consumers living in low income situations they tend to spend a larger portion of their income on clothes and other goods (Floyd, 2018). Thanks to the new flow of imports a number of those goods were cheaper verses if produced domestically, a win for the common folk.
In the previous paragraph the topic of offshoring was touched on, there were negatives which shadowed what was positive in the facts of the matter. The subsiding negative effects to the US came in the form of companies leaving the US for Mexico at lower costs causing a wider trade deficit (NAFTA Economic Impact). The job loss coincided with wage stagnation at low points. The trade deficit went from a positive 1.7 billion in surplus to 54 billion in deficit over the period 1993-2016 (NAFTA Economic Impact). Subsequently the trade deficit netted a job displacement of 851,700 which amounted to 0.6% of the US labor force in 2013 (Floyd, 2018). Since the topic of job displacement has mentioned the lingering job loss in the manufacturing market also needs addressing as well. Due to the implementation of NAFTA a 30% total decrease in manufacturing employment shrunk the industry. In total calculation of jobs the numbers showed a drop from 17.7 million jobs to a more current 12.3 million in 2016 (Floyd, 2018). With such a sharp drop in jobs an educated individual would wonder why Mexico isn’t prospering from these hurtful U.S. statistics, and the answer to that type of rebuttal stands within that culture itself. Granted the fact that even though they now receive a lower tariff and chance to produce more goods with the ability to export them at a lower price, Mexican citizens chose to relocate and immigrate to America. Mexico lost 9.2 million immigrants compared to the past decade of 4.3 million (Floyd, 2018). In all reality Mexico lost a great portion of its GDP, those immigrants could’ve been a pivotal aspect of its labor force.
consumable goods we were to receive it involved supplementary livestock, fresh produce, and processed foods (Fontinelle, 2018).
NAFTA had a groundbreaking impact on Mexico, Canada and especially the US An increase in trade grew in abundance from this new agreement.
The North American and southern region was able to triple trade amongst each other (NAFTA Economic Impact). Following the increase in trade a vast amount of economic growth surged behind it. Prospering from this joint agreement all three countries had the chance to be able and reap the benefits of their economies new growth. At the time the United States GDP went up 0.5% which equated to 80 billion dollars overall or in laments terms a few billion dollars a year between the years of 1993-2016 (NAFTA Economic Impact). To accent the increased trade and economic growth between each country a new wave of higher wages prevailed. Even though the US loses thousands of jobs annually, 200,000 compensate those lost paying 15-20% more (NAFTA Economic
Impact).
Another positive view point that has to be mentioned and addressed is one the development of a more competitive US Auto Industry because of supply chains (Floyd, 2018). Supply chains fostered in the chance for expansion whereas before NAFTA the US had a much smaller span of supply chains compared to after the agreement was enacted. With the trade agreements allowing offshoring it was basically inevitable that some major corporations relocated jobs, what was then unaccepted now had acceptance. Although we may lose 15,000 jobs annually our economy can gain an approximate 450,000 in economy gains, this including higher productivity with lower consumer costs (NAFTA Economic Impact). While the economy was able to see gains economically the consumers in the nation also had the chance to benefit. Due to a greater number of the nation’s consumers living in low income situations they tend to spend a larger portion of their income on clothes and other goods (Floyd, 2018). Thanks to the new flow of imports a number of those goods were cheaper verses if produced domestically, a win for the common folk.
In the previous paragraph the topic of offshoring was touched on, there were negatives which shadowed what was positive in the facts of the matter. The subsiding negative effects to the US came in the form of companies leaving the US for Mexico at lower costs causing a wider trade deficit (NAFTA Economic Impact). The job loss coincided with wage stagnation at low points. The trade deficit went from a positive 1.7 billion in surplus to 54 billion in deficit over the period 1993-2016 (NAFTA Economic Impact). Subsequently the trade deficit netted a job displacement of 851,700 which amounted to 0.6% of the US labor force in 2013 (Floyd, 2018). Since the topic of job displacement has mentioned the lingering job loss in the manufacturing market also needs addressing as well. Due to the implementation of NAFTA a 30% total decrease in manufacturing employment shrunk the industry. In total calculation of jobs the numbers showed a drop from 17.7 million jobs to a more current 12.3 million in 2016 (Floyd, 2018). With such a sharp drop in jobs an educated individual would wonder why Mexico isn’t prospering from these hurtful U.S. statistics, and the answer to that type of rebuttal stands within that culture itself. Granted the fact that even though they now receive a lower tariff and chance to produce more goods with the ability to export them at a lower price, Mexican citizens chose to relocate and immigrate to America. Mexico lost 9.2 million immigrants compared to the past decade of 4.3 million (Floyd, 2018). In all reality Mexico lost a great portion of its GDP, those immigrants could’ve been a pivotal aspect of its labor force.