What Is NAFTA?
Enacted in 1994, The North American Free Trade Agreement established a trade bloc among three North American countries: the United States, Canada, and Mexico. This agreement increased jobs and trade, eliminated a majority of trade tariffs, and decreased government spending. Unfortunately, it was also responsible for job loss in the U.S., as well as the exploitation of Mexican workers. Despite NAFTA’s serious disadvantages, free trade agreements are essential to developing nations; therefore, NAFTA can be deemed a success. The establishment of NAFTA created an array of advantages and disadvantages, with each contributing to the overall success of the agreement. One of the disadvantages of NAFTA is that hundreds of thousands of U.S. jobs were
lost due to the lower cost of labor in Mexico, which also in part caused U.S. wage suppression. There were also prominent complications from the agreement for Mexico, with legislature stemming from NAFTA resulting in the destruction of the Mexican farming industry. This destruction was also partly due to the removal of tariffs, leading to easy importation of goods to Mexico at lower prices than the Mexican farmers could rival with. Another major disadvantage to NAFTA was the effect it had on the environment. Pressure in Mexico to increase production led to the usage of hazardous chemicals and fertilizers, which are known to contribute to pollution. Farm expansion also caused deforestation in some areas of Mexico. The maquiladora program, where goods were manufactured in Mexico to export to foreign companies, gained popularity. However, it did not supply Mexican workers with adequate labor rights or working conditions. While NAFTA undoubtedly came with disadvantages, it came with an overwhelming amount of advantages as well. The North American Fair Trade Agreement saw many positive outcomes in the years following its enactment. NAFTA became the world’s largest free trade market, resulting in four times the amount of trade among the United States, Canada, and Mexico. Due to the removal of tariffs and increased trading, prices dropped on goods such as oil, fruits, vegetables, chocolate, and beef. The U.S. gained an important oil trade relationship with the countries involved, Canada and Mexico, lessening its involvement with more dangerous oil countries such as those in the Middle East.
lost due to the lower cost of labor in Mexico, which also in part caused U.S. wage suppression. There were also prominent complications from the agreement for Mexico, with legislature stemming from NAFTA resulting in the destruction of the Mexican farming industry. This destruction was also partly due to the removal of tariffs, leading to easy importation of goods to Mexico at lower prices than the Mexican farmers could rival with. Another major disadvantage to NAFTA was the effect it had on the environment. Pressure in Mexico to increase production led to the usage of hazardous chemicals and fertilizers, which are known to contribute to pollution. Farm expansion also caused deforestation in some areas of Mexico. The maquiladora program, where goods were manufactured in Mexico to export to foreign companies, gained popularity. However, it did not supply Mexican workers with adequate labor rights or working conditions. While NAFTA undoubtedly came with disadvantages, it came with an overwhelming amount of advantages as well. The North American Fair Trade Agreement saw many positive outcomes in the years following its enactment. NAFTA became the world’s largest free trade market, resulting in four times the amount of trade among the United States, Canada, and Mexico. Due to the removal of tariffs and increased trading, prices dropped on goods such as oil, fruits, vegetables, chocolate, and beef. The U.S. gained an important oil trade relationship with the countries involved, Canada and Mexico, lessening its involvement with more dangerous oil countries such as those in the Middle East.