Explore BrainMass

Explore BrainMass

    North American Free Trade Agreement (NAFTA)

    The North American Free Trade Agreement (NAFTA) is a freetrade agreement signed by Canada, Mexico and the United states, creating a trilateral trading block in North America. The agreement came into force on January 1, 1994. The agreement was negotiated by President George H. W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas. However, it was finalized by President Bill Clinton and Prime Minister Jean Chretian. The agreement was then ratified by each nation's legislative or parliamentary branch.

    The implementation of NAFTA brought the immediate reduction of tariffs on Mexico's exports to the U.S. and U.S. exports to Mexico. It also replaced the Canada-US Free Trade Agreement (CUFTA) which had been in affect since 1989. At the time, trade between Canada and the U.S. was significantly duty-free. 

    Since NAFTA, Mexican exports to the U.S. have grown over 36%, with electrical machinery, petroleum products, vehicles, nuclear reactors, and boilers comprising 70% of these exports. Canadian exports to the U.S. have grown 32.7%, with petroleum related products (25%), vehicles (20%) and nuclear reactors, boilers and machinery (7%) comprising the significany portions of exports. The U.S. trade imbalance has increased from -$51B in 2000 to -$80B in 2008.1

    As well, NAFTA increased U.S. agricultural exports to Mexico, most notably corn and meat; although these changes happened almost a decade after NAFTA was signed.2  The United States has a comparative advantage over Mexico in agriculture because of better production methods and, as a consequence, NAFTA may have hurt Mexico's poor, rural, farming communities. However, agriculture composes a small portion of overall trade under NAFTA.

    The 2008 U.S. Presidential election highlighted four main controversies that exist as a result of NAFTA in the United States: the outsourcing of U.S. jobs to Mexico, the loss of foreign direct investment (FDI) in the U.S., the loss of middle-class incomes for the average worker, and illegal migration from Mexico.2  While it is difficult to prove the validity of these claims, it can be proved that trade has significantly increased since NAFTA, that the US trade imbalance has significantly increased, and illegal migration of Mexican workers has increased.2



    1. Hartman, S. W. (2010) NAFTA, the Controversy. The International Trade Journal. December. p 5-34.
    2. Free Trade Agreement Helped US Farmers. Retrieved from: http://newswise.com/articles/view/541349/

    © BrainMass Inc. brainmass.com May 25, 2024, 11:33 am ad1c9bdddf

    BrainMass Solutions Available for Instant Download

    Company Introduction, Market Segmentation, & Product Positioning

    Continuing to build a marketing plan, this will focus on product and service. Discuss the type of product the company will offer and identify its primary characteristics. Discuss the service component of the product and how it will be used to enhance the product. Explain how the product could be expanded to a product line, a

    NAFTA and Telefonica: answers to case study questions

    Read about NAFTA on the attached article Note the concerns voiced by the opponents of NAFTA before it was signed and the actual impact of the agreement on industry and jobs in the US, Canada, and Mexico. Currently, there is talk of expanding NAFTA to include other countries. Would you recommend expanding the number of countries

    NAFTA: should it be repealed?

    Please help answer the following problem. Include references in the solution. Discuss whether NAFTA should be repealed. Why or why not?

    The Role of NAFTA in the Success of Walmart

    Read the case study "Walmart Goes South" and respond to the following questions: How much of Walmart's success is due to NAFTA, and how much is due to Walmart's inherent competitive strategy? Discuss some of the some of the positive effects of Walmart's success in Mexico and some of the negative effects. Faced with g

    Achieving Comparative Advantage

    1. What is comparative advantage? 2. What can countries do to create comparative advantages and thereby better compete in a global market? 3. What can individuals do to create comparative advantages to better compete in a global market?

    Trade between Canada and the US

    Hi, I need some help with the following question, I am not too sure how to approach it. I just need some ideas so that I can draft my own answer. Canadian products have a large market share in the United States? Is it because of the currency exchange? Does Canada produce certain products better than the US which the US can t

    Government and economic interventions, pros and cons

    Identify the main economic motives for government trade intervention. What are the drawbacks of each method of intervention There are political motives. That is politicians like to keep jobs in their districts even though it may not be the most advantageous economically...

    Regulations and Laws in the United States

    Over recent decades one of the principal changes in the external environment that has had a direct effect on managers has been government regulations. A list of some of the laws enacted since 1970 that have had a profound effect on how organizations can operate is shown on Table 3 - 3. This landmark legislation such as Occupatio

    Discussion of Domestic and International Marketing

    Please discuss the following: - How is domestic marketing different from international marketing? Why should organizations be concerned with international marketing? - What conditions have led to the development of global markets? How can an increased interest in global markets by American organizations be explained? Why is

    The Benefits of NAFTA

    1. Do you think NAFTA has produced significant net benefits for the Canadian, Mexican and US economies? 2. Do you think the standard IMF policy prescription of tight monetary policy and reduced government spending are always appropriate for nations expereincing a curreny crisis?

    Monetary and Fiscal Policy for Wal-Mart

    Effects of Fiscal Policy Think about how fiscal policy can effect your firm. Please address the following questions: 1. Suppose the government imposes tax cuts for 95% of all households. How does this affect your firm? 2. Trade policy is also an important tool for the government in regulating exports and imports. Give a

    Dangers and advantages of globalization

    What are the relative dangers and advantages of globalization for developing countries? How can they seize the advantages of globalization and avoid the dangers? Please be specific and use examples and make sure your text its original. Thanks!

    Technique for reducing the international transactions

    Diversification is possibly the best technique for reducing the problems associated with international transactions. Provide one example each of international financial diversification and international operational diversification and explain how the action reduces risk

    International Business Law and Foreign Labor

    International Business Law 1. Choose a product and a country to which you wish to export that product. Identify the factors that would need to be addressed in order to ensure a successful venture. 2. Is it or is it not appropriate for colleges and universities to enact bans against the products of U.S. companies using for

    Managerial economics CLASS DISCUSSION TOPIC - NAFTA

    CLASS DISCUSSION TOPIC - NAFTA The North American Free Trade Agreement (NAFTA) is a trade agreement between the United States, Canada, and Mexico whose purpose is to eliminate tariffs between the countries and promote all aspects of international trade. There are many arguments for and against the treaty. One of the arguments

    International Marketing

    1. Using the factors that serve as the basis for success of an economic union (political, economic, social, and geographic), evaluate the potential success of the EU, NAFTA, and Mercosur. 2. Visit the Web sites of General Motors and Ford, both car manufacturers in the United States. Search their sites and compare their inter

    Free Trade Agreements and Areas

    1. What comments and/or questions do you have on free-trade agreements and free-trade areas? What examples do you have of how trade within free-trade areas, such as NAFTA, is not completely free? 2. What are the variable costs of your workplace/employer? Is your job a variable cost? Is your job threatened by technological

    walart goes south

    Read the case study "Walmart Goes South" at the end of Chapter 8 in your course textbook, and respond to the following questions: â-¦How much of Walmart's success is due to NAFTA, and how much is due to Walmart's inherent competitive strategy? . â-¦Discuss some of the some of the positive effects of Walmart's success in

    This solution is a detailed company profile on Chevron.

    Prepare a paper (700 to 1,050 words) incorporating answers to the questions below. It is important to address each of the questions presented. The Reference List is not included in the required paper length. Your paper must contain at least five references, which may include, internet sources, books, and professional journals

    Since the early 1900s Walgreens corporation was committed to being the forerunner in innovation and trendsetting. Walgreens established premiere campaigns that revolutionized the health and wellness industry. The organization took great pride in becoming a household brand that provided a higher level of total quality prescription drugs in addition to a plethora of diversified products that are cost effective for the consumer. From a personal perspective Walgreens is by far one of the best drug stores in the United States as compared to CVS pharmacy, Wall-mart, and Rite Aid (a drug store that closed several branches all throughout the U.S.). Charles R. Walgreen, Sr. is the man responsible for the successful chain of drugstores. As a result of an accident that prevented Walgreen Sr. from pursuing a career in sports, Walgreen Sr. had to create a back-up plan that led him to fulfill a purpose in pharmaceuticals which ultimately became a launching pad for him to transform the prescription drug industry. The organization envisioned becoming the nation's primary leader in prescription drugs. The organization made their vision a reality when they continued to invest in technological advancements that enabled the organization to launch several locations throughout the U.S. and Puerto Rico. Walgreens now operates in 47 states and Puerto Rico. "New firms may opt to incorporate themselves in Puerto Rico as "controlled foreign corporations" and receive the tax benefits provided by Section 901 of the U.S. Internal Revenue Code. Puerto Rico's government aims to make up for the 936 loss by providing new local incentives, cutting taxes and encouraging economic development in other industries (Rivera, 2011). The agreement between the U.S., Canada and Mexico for the North American Free Trade Agreement (NAFTA) also has implications for Puerto Rico because of competition for jobs and investment. Although wage levels are lower in Mexico, Section 30A gives companies in Puerto Rico an advantage in pharmaceuticals and hi-tech industries. In low-skill labor-intensive manufacturing, such as clothing and footwear, Mexico has the advantage. Puerto Rico currently employs 30,000 in the clothing industry (Rivera, 2011)." According to some economists Puerto Rico's economy is anything but prosperous. "Puerto Rico has very few natural resources of economic value and its economy relies mainly on Federal Aid from the United States Government, which depends on the industrialization programs and the tax incentives that U.S. offers. Economists believe that reinstating IRS Section 936 or making IRS Section 30A permanent for U.S. firms operating in Puerto Rico is not the best way to stimulate sustainable development on the island." (Rivera, 2011). "Walgreens has long been committed to customer convenience, and in doing so Walgreens offers items and services beyond those of a typical drugstore. These services include drive-thru pharmacies and one-hour photo services, and many stores are open 24 hours a day."(Mullis, n.d.). Human resources management (HRM) is on the brink of applied total quality management (TQM) of effective organizational practices. The organization prides itself on promoting a diversified organizational culture that leads to exceptional consumer satisfaction which exceeds consumer expectations; increased productivity thus resulting in further expansion opportunities; and increased financial performance. As a result of Walgreens overwhelming success that contributed to the organization opening several branches within the confines of the U.S. region, the organization was determined to take their innovative concept abroad in an effort to expand globally. The Walgreens brand could no longer be confined to serving only the United States; instead the organization was determined to enter an untapped market. The initiative to expand globally was as a result of enlarging the capacity of their organizational culture in addition to maintaining a strategic competitive advantage. Currently Walgreens only operates within the United States and Puerto Rico. Perhaps Walgreens will expand beyond the aforementioned locations and embark upon future opportunities. Although there are several competitors within the prescription drug industry, Walgreens thrives on providing the best customer service with an interpersonal touch to each and every consumer as compared to their competitors. From a personal perspective, employees generally have longevity with the organization in reciprocity Walgreens is known for their willingness to promote employees from within if he or she has proven themselves to be a loyal and trustworthy employee with leadership abilities and willingness to learn new tasks and responsibilities. Organizations have an obligation to maintain compliancy with state and federal employment law. "On March 12, 2001, the Equal Employment Opportunity Center filed a motion to intervene in a nationwide sex discrimination class action against Rent-A-Center, Inc. The class complaint claims that Rent-A-Center eliminated job classifications previously held by women; imposed a weight-lifting requirement unrelated to actual job requirements; harassed and unfairly disciplined female employees; assigned women cleaning and clerical duties; demoted and failed to promote females; and discharged or forced women to resign. The suit seeks $410 million in damages, including back pay and interest." (Stohner, Speights, and Martin, 2001).

    Since the early 1900s Walgreens corporation was committed to being the forerunner in innovation and trendsetting. Walgreens established premiere campaigns that revolutionized the health and wellness industry. The organization took great pride in becoming a household brand that provided a higher level of total quality prescript

    Environmental Forces, Cultural Diversity & Opportunity in Global Business

    1.What are some of the different environmental forces one is likely to encounter in a diverse workplace? What are some of the best responses for managing these forces? Explain your answers 2. How does cultural diversity affect international business operations? How might a transnational organization best incorporate the var

    Research for Regional integration, stage of economic development

    Can someone please help me find research for my assignment below. I am not asking anyone to complete the assignment, but to help me find research and give guidence on what I can do so that I can complete this assignment on my own. Select a region and choose a trading bloc (NAFTA, EU, ASEAN, etc.) within that region. It might