The Pros And Cons Of NAFTA

One of the most debated topics in the past election during Trump's presidency is North American Free Trade Agreement, also known as NAFTA. Donald Trump talked a lot about NAFTA over the course of his presidential run with plans to renegotiate or withdraw from the agreement. What was deemed originally a great trade agreement has since gotten a lot of backlash for many reasons that will be discussed later. Trade is an important part to any country, it brings in products that a country can’t grow or manufacture on its own soil. It saves time and money, which that then can be used in other avenues. These efforts allow the U.S. to be the world's third-largest exporter, behind China and the European Union, and the second largest importer, behind …show more content…
The whole purpose of the agreement was to allow free trade between the countries of Canada, the United States and Mexico. George H.W. Bush signed the agreement in 1992 despite its hard opposition followed by Bill Clinton doing what he could to make sure NAFTA passed through congress that next year (U-s-history.com). The legislature was passed by the House of Representatives with a vote of 234 to 200 (Amadeo, “What is...”). As we can see, this piece of legislature did not pass the House with a large sweep of the votes. Many in Congress disapproved of the agreement and tried to fight against it (Smith). NAFTA made North America the largest free market in the world with the three economies of the countries equaling a combined $6 trillion and directly affecting more than 365 million people. (Inc.com) The purpose of the agreement is to eliminate tariffs and other trade barriers so that the countries could trade freely with each other as well as increase business investments and help North America become more competitive in the global marketplace. Before NAFTA, there were tariffs of 30 percent or higher on exported goods to Mexico and Mexican tariffs on U.S. goods totaling 250 percent more than U.S on Mexican products. The three countries agreed to hold a standard to the highest level possible with national standards no longer being a barrier to trade. (Inc.com). With all of these opportunities, tariff …show more content…
Many were unhappy for multiple reasons. First, and probably the most important, U.S. jobs were lost. Labor cost in Mexico is significantly cheaper than the cost in the United States and so, many companies moved their production to Mexico. Second, the wage growth in the U.S. within these industries affected by NAFTA had been restrained. This happened by companies threatening to move their operations to Mexico. This gave the workers very little authority on being able to bargain for their wages. The factories were able to use this scenario to suppress any wage growth (Amadeo, “6 Negative...”). Third, there has been a sharp decrease in the number of manufacturing jobs. When we look at the numbers, there has been a decrease of 30% in manufacturing jobs in the U.S., which totals a loss of 5.4 million manufacturing jobs (Floyd). Now the United States wasn't the only ones that accumulated some negative effects from NAFTA, Mexico was impacted in a negative way also. Mexico had a loss of $1.3 million farm jobs which was due to a variety of reasons. One reason being that when NAFTA removed trade tariffs, farmers in the U.S. exported their products to Mexico which Mexican farmers just couldn't compete with. Also due to the shrinking size of available land in Mexico, there was mass deforestation to expand rural farming capabilities. The deforestation itself equaled to about 630,000 hectares per year (Amadeo). NAFTA