final nafta

8/8/2019 Final Nafta

1/19

M A D E B Y : - VA I B H AV K U M A R 2 9

N I K H I L L A M B A 3 0K A R A N M A G O 3 1

A S H I S H M A N G A L 3 2


2/19


3/19

Introduction

y The Nort h American Fr ee Trad e Agreem ent (NAF T A ) is atrilat eral trad e bloc in Nort h America cr eat ed by t he gov ernm ents of the Unit ed Stat es, Canada, and M exico.

y The agr eem ents w ere sign ed in D ecemb er 1993 by t he lead ers of t he three countri es Brian Mulron e y of Canada, Carlos Salinas d e Gortariof Mexico, and Bill Clinton of t he Unit ed Stat es but did not com e intoeff ect until January 1, 1994.


4/19

Data

y Secretariats - M exico City, Ottawa and Was h ington D.C.

y Official languag es - Englis h , Fr ench and Spanis h

y Memb ers h ip - Canada, M exico, Unit ed Stat es

y Establis hm ent Formation January 1, 1994

y Area Total 21,783,850 km (1st)

y Population - 2008 estimat e 445,335,091 (3rd)

y GDP 2007 estimat e Total $15,857 billion (1st)


5/19

y In t erms of combin ed purc hasing pow er parity GDP of itsmemb ers, t he trad e bloc is t he larg est in t he world and s econdlarg est by nominal GDP comparison.

y The impl em entation of NAF T A on January 1, 1994, broug h tthe imm ediat e elimination of tariffs on mor e than on e half of U.S. imports from M exico and mor e than on e th ird of U.S.exports to M exico.


6/19


7/19

Rules of origin andregional content

y Origin goods and s ervic es must originat e in Nort h America to g etaccess to low er tariffs.

y R egional cont ent t he percentag e of valu e that must b e from Nort h Am erica for t he product to b e consid ered Nort h American in t erms of country origin.


8/19

GOALS OF NAFTA

y

To eliminat e barri ers of trad e and inv estm ent b etw een t he US,Canada and M exico.

y Liberalization of r estrictions on s ervic es and for eign inv estm ent.

y Enforc em ent of int ellectual prop erty rig hts, and a disput e settl em ent proc ess.


9/19

V AIBHA V KUMAR

29


10/19

Effects of nafta

On agriculture-

y Non tariff obstacl es pertaining to trad e in agricultur e betw een Mexico

and Unit ed Stat es of Am erica w ere dissolv ed

y Mexico's agricultural exports incr eased 9.4 p er cent annually b etw een1994 and 2001, w h ile imports incr eased by only 6.9 p er cent a y earduring t he sam e period.


11/19

On investment-y Impl ementation of NAF T A, influ enced inv estm ents in a

positiv e mann er.

y Sinc e the y ear 1994, stock of FDI or for eign dir ect inv estm entin Canada has b een appro ximat ely, USD 279 billion(y early).

y In t he y ear 2005, t he ov erall for eign dir ect inv estm ent inCanada was USD415 billion.


12/19

On Trade-

y Ov erall, NAF T A has not caus ed trad e div ersion, asid e from af e w industri es suc h as t extiles and appar el, in w h ich rul es of origin n egotiat ed in t he agr eement w ere sp ecifically d esign ed

to mak e U.S. firms pr ef er Mexican manufactur ers .


13/19

y NAFT A em erged a strong platform for M exico to boost exportsand suppl em ent its economy, w h ich was wobbling on a larg e trad e deficit.

y NAFT A he lped in M exico's export r ecov ery throug h duty-fr ee trad e wit h the US.

y Ov er the past d ecad e, Mexico's export to t he US has ris enfour-fold.

y And to t he surpris e of many, M exico turn ed its trad e balanc e wit h the US in its favour in t he post-NAF T A period.


14/19

KARAN MAGO31


15/19

The Impact of NAFTA on SubsistenceProducers

y Nort h American firms ar e now mor e efficient and productiv e. The y hav e restructur ed to tak e advantag e of economi es of scal e inproduction.

y Access to cr edit r educ e

y Job loss in t he U.S.A

y Incr eased environm ental d egradation

y Sell the harv est in buy er mark et

y R egional busin ess inv estm ent in t he Unit ed Stat es ros e 117 percent betw een 1993 and 2007, as compar ed to a 45 p ercent ris e in t he fourt een y ears prior.


16/19

Benefits and Limitations

y Benefits:y Benefits the import ers by r educ ed or duty fr ee goods.

No MPF(M erchandiz e Proc essing F ee) from Canada for

NAFT A goodsCan mak e the export er mor e comp etitiv e the n ot he rnon-participating countri es

y

200% incr eas e in trad e among t he 3 countri es.

y Increas e mark et acc ess wit hin each country.


17/19

Limitations:y It has n egativ e impacts on farm ers in M exico w ho saw

food pric es fall bas ed on c he ap imports from U.S.agribusin ess

y It has n egativ e impacts on U.S. work ers inmanufacturing and ass embly industri es w ho lost jobs.

y Critics also argu e that NAF T A has contribut ed to t he rising l e v els of in eq uality in bot h the U.S. and M exico.

y Som e economists b elie v e that NAF T A has not b een

enoug h (or work ed fast enoug h) to produc e aneconomic conv ergenc e, nor to substantially r educ e pov erty rat es


18/19

Recent news

y NAFTA trade numbers 19.3% higher for September over 2010

y Surface transportation consists largely of freight movements by truck, rail and pipeline. In September, 86.9 percent of U.S.trade by value with Canada and Mexico moved on land.


19/19

THANK YOU

final nafta

Documents