The Impact of North American Free Trade Agreement in Economy

As it is presently written, the accordance would radically lower barriers to trade in goods and services amid the third countries (The United States, Mexico, and Canada). Only a generation ago, Mexi hind ends were earnest protectionists, but today they embrace the reforms embodied in NAFTA. On the other hand, many Americans contribute shown hostility to the agreement (including nearly recently Ross Perot), arguing that NAFTA's economic benefits will come at an unacceptable cost to the milieu and to American jobs. In the intimately recent round of negotiations in work, Mexico and Canada, both conscious of the dogma of sovereignty and both facing elections soon, showed a desire to lessen any amendments to last year's treaty. On the other hand, American commentators and legislators have been pressing for big veers.For example, Clyde Prestowitz of the Economic Strategy Institute in Washington, D.C., says that the current treaty is "the last thing the United States needs," dapple Richard Gephardt, the House majority leader (whose support for NAFTA is essential if it is to be accepted) has told the administration that he cannot back the treaty on "a leap of faith" as he feels he is macrocosm have a bun in the ovened to do. Those in Mexico who want to see that the agreement is passed have to ask first whether the critics are right, and second how they can change minds if the critics a

At the present time, the United States is the largest contrasted investor in both Canada and Mexico, with steer investment of $68.5 billion and $11.6 billion, respectively, in 1991. Together, Canada and Mexico account for 18 percent of the stock of U.S. foreign consume investment and 12 percent of annual U.S. capital outflows. Canadian and Mexican direct investment in the United States in 1991 was $30.0 billion and $0.6 billion, respectively, or 7.5 percent of total foreign direct investment in the United States. NAFTA removes investment barriers, provides fair intercession of investors and eliminates government requirements that distort business decisions.

An open investment environment in North America is considered good for all cardinal countries, and NAFTA will expand investment opportunities in all three countries by reducing costs of inputs, reallocating resources toward more competitive industries, increase real purchasing power, and offering economies of scale. At the present time, Mexico can review all investment proposals to determine if they are in the national interest. NAFTA gives U.S. companies the right to establish firms in Mexico and Canada or arrest existing firms, but it does not encourage U.S. firms to do so (Driscoll, 1992, pp. 6-7).

While Salinas is now winning battles, says economist Rogelio Ramirez de la O, he is also changing the country's political equation: Economic change releases new forces that cannot be coopted." And even Salinas's friend strong-arm Aguilar Camin, editor of the prestigious monthly Nexos, predicts that Mexican voters will at long last start demanding political deregulation as well: " wad won't understand why they can choose among five brands of grain but can't choose their own government" (Robinson, p. 40).

After NAFTA. (1993, March 20). The Economist, p. 71.

For a freetrade agreement to deliver the promised benefits, though, Salinas nevertheless needs to triumph over inefficiency, corruption, and political resistan
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