regional integration

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We will chose NAFTA for this assignment:

The United States, Canada and Mexico started NAFTA and formed free trade agreement in Jan 1994. The express purpose of it was to liberalize trade in goods and services, remove barriers to investment, strengthen the protection of intellectual property rights; and establish a framework for further trilateral cooperation. The agreement is based on principals of non-discriminatory treatment and transparency. It consists of 24 chapters and about1000 pages covering various sectors of economy. The provisions are to eliminate all trade barriers by 2008. There has been significant achievement with elimination of more than 99% trade barriers. The over all impact when comparing with the stated objectives has been extremely positive. The trade has been doubled from $302 billion in1993 to $652 billion in 2003 between the countries. U.S. Exports to Canada & Mexico increased from $142 billion to $267 billion in NAFTA's first decade, significantly higher than average increase of trade with other countries, which stands at 41%. It has proven to be a boon for all the three economies in this decade. American Economy grew by 38%, Canadian Economy by 41%, Mexican Economy by 33%.

The real impact of the agreement has been the increase in productivity to the tune of 55% in Mexico. . This has clear implication on improving the region's competitiveness in the global economy. This has also helped in reducing unemployment level in Mexico from 3.4% to 3.3%.

The main benefit has been NAFTA-related trade and investment liberalization that has allowed U.S. firms to find new markets in Canada and Mexico. It has also helped in maximizing efficiencies gained in terms of global competitiveness, and increased sales to other world markets as well.

In the automobile sector the U.S Exports of new passenger vehicles and light trucks totaled less than $95 million. They jumped by 500 percent to reach 584 million in 1994, the first year of the agreement. By the end of 2003, U.S. exports to Mexico totaled $3.2billion, a 3400 percent increase in shipments as compared to 1993.

Exports of agricultural equipment by U.S. increased 93 percent to Mexico while exports to the rest of the world grew at 37%. Similarly, trade between countries in chemicals including plastics, solvents, thinners etc. has increased substantially.

NAFTA had a ...