Describe NAFTA. Which nations belong to NAFTA? What is NAFTA's purpose? What benefits and problems have resulted from this agreement?

Question

What will be an ideal response?

Answer 1

The North American Free Trade Agreement (NAFTA) is a trading bloc consisting of the United States, Canada, and Mexico. A trading bloc, also known as an economic community, is a group of nations in a particular geographic area that agree to join together to remove trade barriers with one another. NAFTA is supposed to eliminate 99 percent of the tariffs and quotas among these countries, allowing for freer flow of goods, services, and capital in North America.

Trade with Canada and Mexico in 2014 accounted for 34 percent of the U.S. total, up from one-quarter in 1989, and trade among the three nations has gone from $290 billion in 1993 to $1 trillion, according to government data. Still, as one reporter points out, "the treaty never met many of its sweeping promises to close Mexico's wage gap with the United States, boost job growth, fight poverty, and protect the environment."

Is NAFTA a job killer, as some have complained? In the United States, around 845,000 jobs have been lost because of increased imports from Canada and Mexico and the relocation of factories in the past two decades, according to the government watchdog group Public Citizen. However, some experts suggest that many jobs lost to Mexico during this period would probably have gone to China or elsewhere. NAFTA has also spurred a U.S. trade deficit with Mexico and Canada—$177.2 billion in 2013, a nearly tenfold increase above the pre-NAFTA level. However, supporters insist NAFTA ultimately will result in more jobs and a higher standard of living among all trading partners. In particular, workers in Mexico have benefited a great deal from NAFTA, which has raised the family income of Mexicans and emancipated Mexican women.