Term Paper on "Mexico and North American Free Trade Agreement"
Term Paper 4 pages (1592 words) Sources: 1+
[EXCERPT] . . . .
Mexico and the North American Free Trade AgreementThe North American Free Trade Agreement, known usually as NAFTA, is a comprehensive trade agreement linking Canada, the United States (U.S.), and Mexico in a free trade sphere. NAFTA went into effect on January 1, 1994, and called for immediately eliminating duties on half of all U.S. goods shipped to Mexico and gradually phasing out other tariffs over a period of about 14 years. Restrictions were to be removed from many categories, including motor vehicles and automotive parts, computers, textiles, and agriculture. The treaty also protected intellectual property rights (patents, copyrights, and trademarks) and outlined the removal of restrictions on investment among the three countries. Provisions regarding worker and environmental protection were added later as a result of supplemental agreements.
This Agreement was an expansion of the earlier Canada-U.S. Free Trade Agreement of 1989. Unlike the European Union, NAFTA does not create a set of supranational governmental bodies, nor does it create a body of law which is superior to national law. NAFTA, as an international agreement, is very similar to a treaty (indeed, in Spanish, it is styled a tratado). Under U.S. law it is classed as a congressional-executive agreement. There was considerable opposition on both sides of the border to the Agreement. Some opposition persists to the present day. In Canada, labor unions have subsequently removed their objections to the Agreement from their platforms.
In today's borderless economy, Mexico faces enormous challenges. A decade after the enactment of NAFTA, Mexico has benefited from free trade but problems rem
download full paper ⤓
Mexico has come a long way from the catastrophic financial crisis of 1994-1995, when millions of Mexicans were thrust into poverty and life savings were wiped out. Two million jobs were eliminated. The early days of NAFTA had failed to benefit Mexico as expected, and most of the manufacturing exports still came from the maquiladora sector along the northern border with the U.S. A corrupt and unstable political environment limited foreign investment. In January 1995, President Clinton was motivated to provide a $47 billion bailout of the Mexican economy.
Today, foreign investment is on the rise. The maquiladora sector no longer accounts for the bulk of exports. Manufacturing facilities, while still concentrated in northern Mexico, are spreading out to other parts of the country. The low average wage, of less then two dollars per hour, is a strong inducement to establishment of foreign facilities, particularly outside of the northern area, where the unemployment rate is close to zero. Not only is foreign investment coming from the U.S. And Canada, but also from Europe and Asia, as we see a shift from investment in Asia. The political climate has improved and Mexico is now perceived as a more stable platform for investment.
In spite of these vast improvements in the last ten years, Mexico still has some serious challenges ahead. Poverty rates are still high, with more than half the population classified as poor (living on less than two dollars per day) and almost a quarter classified as extremely poor (living on less than one dollar per day). Although unemployment is low in northern Mexico, other parts of the country are suffering from a shortage of jobs, with many workers surviving on part-time work. The Mexican economy needs to create one million new jobs each year in order to absorb the young workers entering the market. "John Cavanagh and Sarah Anderson of the Institute for Policy Studies, writing in the same issue of Foreign Policy, contended that NAFTA promised a broad range of social and environmental advances, not just industrial growth, which has not benefited the citizens of Mexico. 'Workers, communities, and the environment in all three countries have suffered from the agreement's flaws,' they wrote, pointing to reports showing that Mexican manufacturing wages were no higher in 2000 than in 1994, NAFTA's first year. In fact wages in 2000 were calculated to be lower than in 1981." There is also concern that loopholes allow U.S. industries and goods to be protected at the expense of both U.S. consumers and Mexican producers. "Exports for one of Mexico's main crops, sugar, are severely restricted by U.S. quotas that limit imports from Mexico to only 7,258 metric tons of raw sugar. Thus, while American consumers pay four times the world price for their sugar, Mexican sugar farmers, like West African cotton growers, face penury and hunger."
The educational infrastructure is currently not sufficient to meet the needs of the labor pool. Although manufacturing jobs are being created in Mexico, many of these are lower paying jobs. The workforce does not possess the skills necessary to move into higher paying positions. This has the affect of increasing discontent in lower class Mexicans who aspire to a higher lifestyle, but are trapped in lower paying jobs because of a lack of skills.
As mentioned above, Mexico has the highest per capita income in Latin America. How is this consistent with the extreme poverty conditions we see there? The answer is that while the average standard of living is increasing in Mexico, the gap between the upper classes and lower classes is increasing. The richest ten percent of the population earns almost forty percent of total income, while the poorest ten percent earns only about one percent of total income. This inequitable situation is compounded by ethnic and regional differences and by differences in access to basic services. Mexico's goal of reducing poverty and hunger by half, under five-year-old infant mortality by two-thirds, and maternal mortality by three-quarters by the year 2015 appears to be in jeopardy.
Much of the benefit of NAFTA has been reaped by larger companies, with access to cheaper foreign financing. Smaller companies in Mexico have trouble upgrading technology because of higher borrowing costs. "You're clearly concentrating power in the top producers that have financial power,' says Raul Hinojosa, a professor of public policy at the University of California at Los Angeles." A study he led for NAFTA discovered that the top fifty companies accounted for one-half of exports and most of the export growth. Foreign investment has been extremely important to the progress Mexico has made over the past decade, but it cannot be counted upon to sustain growth over the long-term. Access to domestic financial markets must be improved, particularly for the small businessman, and property ownership opportunities must be expanded.
Mexico also has severe environmental problems. In addition to the obvious air quality problem primarily in the major cities, the country suffers a scarcity of water and high rates of deforestation. Implementation of principles of sustainable development into the country's policies and procedures is urgently needed.
The political and judicial infrastructure needs improvement. Mexican courts are rife with inequities. The poor have little access to… READ MORE
Quoted Instructions for "Mexico and North American Free Trade Agreement" Assignment:
i will fax the rest of information *****
How to Reference "Mexico and North American Free Trade Agreement" Term Paper in a Bibliography
“Mexico and North American Free Trade Agreement.” A1-TermPaper.com, 2005, https://www.a1-termpaper.com/topics/essay/mexico-north-american/9608346. Accessed 5 Oct 2024.
Related Term Papers:
Export Companies in Mexico Research Paper
Export Companies in Mexico
By the size of its gross domestic product, Mexico is currently the 12th largest economy of the globe. The economic success of Mexico is due to… read more
Research Paper 3 pages (917 words) Sources: 3 Topic: Latin America / Mexico / Caribbean
Free Trade Agriculture Essay
Free Trade Agriculture
The issue of agriculture and its free trade attempts has generated a series of divergent opinions around the subject. Some experts consider that free trade in agriculture… read more
Essay 2 pages (617 words) Sources: 1+ Topic: Agriculture / Food / Culinary
International Trade and Environment Term Paper
free trade and whether it is good or bad for the environment. The writer examines the exodus of American companies that are finding it financially advantageous to move their operations… read more
Term Paper 16 pages (4473 words) Sources: 1+ Topic: Environment / Conservation / Ecology
Union Between Mexico and U.S Essay
North Atlantic Free Trade Agreement (NAFTA). The United States and Mexico have been developing a more productive partnership that will improve both countries. At this point it only makes sense… read more
Essay 3 pages (999 words) Sources: 3 Style: MLA Topic: Drugs / Alcohol / Tobacco
NAFTA Described as a 'Living, Breathing, Evolving Thesis
NAFTA
"Described as a 'living, breathing, evolving' document by its proponents,
NAFTA holds the promise of accruing major benefits for the business communities in Canada, the U.S. And Mexico"
John… read more
Thesis 10 pages (2864 words) Sources: 6 Style: MLA Topic: Economics / Finance / Banking
Sat, Oct 5, 2024
If you don't see the paper you need, we will write it for you!
We can write a new, 100% unique paper!