Naxifta Case Study
Nancy, Sylvia, Flora and Tony
9.2 Group Assignment
After NAFTA takes effect, Mexican produce products such as tomatoes with lower price because their lower labor costs which threat to the United Stated producers. The United Stated tomatoes producers in Florida are worried about Mexican robbed their business because of their lower labor costs. Therefore, The United Stated producers asked for the government to set up a minimum floor price for tomatoes from Mexico. This can prevent Mexican producers to lowering their prices below the floor to gain share in the United States market (Hill & Hult, 2011, p283).
I think this is consistent with NAFTA principals. The purposes of NAFTA are to eliminate barriers to trade, create conditions …show more content…
Export of tomatoes, expand exports can be made free trade concessions, is conducive to the export of Mexican products and services. And the expansion of exports can increase production technology, so that Mexico 's tomato cultivation technology to follow up the trend of the times. Further, the export of tomatoes in Mexico is conducive to the further introduction of foreign capital and increase the employment rate. Because the United States each year requires a lot of production, which can promote the local economic development in Mexico, expanded production of tomato supply chain, providing a lot of post positions to the Mexican people. There is also an important point in Mexico, favorable to reduce trade discrimination, such as the United States before the local Mexican exports of tomato products to engage in discrimination, such as setting unreasonable anti-dumping regulations. If Mexico continues to export tomatoes, will greatly enhance the national image. Furthermore, the standard of living of the Mexican people has been …show more content…
First, US retailers can buy fresh and large quantities of tomatoes at a lower price, which helps them better sell their products. Second, because Florida is sometimes affected by weather in winter, tomatoes can not be mass-produced. If the export of tomatoes to Mexico is forbidden, the price of tomatoes will increase substantially during that time, resulting in higher prices for local retailers, leading to higher prices for tomato products throughout the market. This is very unfavorable, so open the import of Mexican tomatoes on the US national economy also has some help (Hill & Hult, 2011, p284).
Although the North American Free Trade Agreement brings a lot of benefits for both countries, it still has some negative effects for these two countries. Firstly, because of the low pay labor and the looser environmental law, more American companies tent to invest in Mexico (North American Free Trade Agreement, 2006). It will result in the lack of job opportunities in America, and the fierce competition in the job market. Besides, in order to deal with this problem, the minimum wage standard should be decreased for increasing the employment rate. It is not good for improving the living standard of