Pros and Cons of Nafta
NAFTA, the North American Free Trade Agreement, has been getting a lot of not so favorable, and sometimes, controversial headlines in recent years. Some critics blame it for the current labor shortages in the United States, due to the fact that most U.S. companies have been and continue to outsource and ship jobs overseas. However, its proponents have been hailing it as a great success in helping lowering national prices on certain manufactured goods and services and that it has caused to increase wages for certain jobs within the U.S.
The Agreement was signed by Bill Clinton, president of the United States, Brian Mulroney of Canada, and Carlos Salinas de Gortari of Mexico. It was hailed as the highest …show more content…
Free trade agreements can help to encourage coordination and cooperation among member states, according to southerncenter.org. Some may argue that NAFTA has, for example, increased Mexico's willingness to cooperate in the U.S.'s crackdown on illegal immigration and international smuggling; others would argue that these problems have not diminished enough to prove that the cooperation is helpful.
Disadvantages of NAFTA:
NAFTA has many disadvantages. NAFTA made it possible for many U.S. manufacturers to move jobs to lower-cost Mexico. The manufacturers that remained lowered wages to compete in those industries.
Many of Mexico's farmers were put out of business by U.S.-subsidized farm products. NAFTA provisions for Mexican labor and environmental protection were not strong enough to prevent those workers from being exploited.
U.S. Jobs Were Lost:
Since labor is cheaper in Mexico, many manufacturing industries moved part of their production from high-cost U.S. states. Between 1994 and 2002, the U.S. lost 1.7 million jobs, gaining only 794,00, for a net loss of 879,000 jobs. Nearly 80% of these jobs were in manufacturing. California, New York, Michigan and Texas were hit the hardest because they had high concentrations of the industries that moved plants to Mexico. These industries included motor vehicles, textiles, computers, and electrical appliances.
U.S. Wages Were Suppressed:
Not all companies in these industries moved to Mexico. The