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NAFTA: Achievements and Challenges


Code : ITF0016

Year :

Industry :General Business

Region : :US Canada Mexico

Teaching Note: Not Available

Structured Assignment : Not Available

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THE BEGINNINGOF NAFTA The US President, George Bush, theMexican President, Carlos Salinas and the Canadian Prime Minister, Brian Mulroney were the signatories to the agreement on behalf of their respective nations. NAFTA was based on the ‘1988 US-Canada Free Trade Agreement’ (US-Canada agreement), and included intellectual property rights like trademarks, patent rights and copyrights...

Challenges confronting NAFTA Amidst all the achievements, there were some questions to be answered by the agreement. The foremost was to address the disparities in terms of development. For instance, the jobs that were created in the US, after the implementation of the agreement, were yieldingmore than median wages.19 But in Mexico, the real wages decreased in spite of an increase in productivity fromthe time the agreement came into existence...

Regional Trade Blocks In spite of globalisation,most countries continued tradingwith their neighbourswithin the regional trade blocks through preferential trade agreements. One explanation was geographical proximity. As countries lowered their tariff barriers, lower transport costs meant more incentives to stay within the regional trade blocks. This also yielded gains from economies of scale. “But another reason for the fast growth in trade among nearby countries may be less benign....

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