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Published by Liuba Postoronca

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Published by: Liuba Postoronca on Sep 21, 2011
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Results : North Americans Are Better Off After 15 Years of NAFTA
The North American Free Trade Agreement (NAFTA) revolutionized trade andinvestment in North America, helping to unlock our region’s economic potential.Since it came into effect 15 years ago, North Americans have enjoyed an overallextended period of strong economic growth and rising prosperity.NAFTA has helped to stimulate economic growth and create higher-paying jobsacross North America. It has also paved the way for greater market competitionand enhanced choice and purchasing power for North American consumers,families, farmers, and businesses.Furthermore, NAFTA has provided North American businesses with better access to materials, technologies, investment capital, and talent available acrossNorth America. This has helped make our businesses more competitive, bothwithin North America and around the world. With rapidly growing economies inAsia and South America challenging North America’s competitiveness, NAFTAremains key to sustained growth and prosperity in the region.NAFTA has proven that trade liberalization plays an important role in promotingtransparency, economic growth, and legal certainty. In the face of increasedglobal competition, Canada, the United States, and Mexico will work tostrengthen the competitiveness of the North American region by continuing topursue trade within the NAFTA region. The three countries will also continue toexpand trade with other regions. Additionally, Canada, Mexico, and the UnitedStates share common challenges within North America that directly affect qualityof life. At the 2009 North American Leaders’ Summit, our three countries agreedto “reiterate our commitment to reinvigorate our trading relationship and toensure that the benefits of our economic relationship are widely shared andsustainable.
Since NAFTA came into effect, merchandise trade among the NAFTApartners has more than tripled, reaching US$946.1 billion in 2008. Over thatperiod, Canada-U.S. trade has nearly tripled, while trade between Mexico andthe U.S. has more than quadrupled. [C$ figure = $1.0 trillion]
Today, the NAFTA partners exchange about US$2.6 billion in merchandiseon a daily basis with each other. That’s about US$108 million per hour. [C$figures = $2.8 billion and $115 million]
Since NAFTA came into effect, the North American economy has morethan doubled in size. The combined gross domestic product (GDP) for Canada, the United States, and Mexico surpassed US$17 trillion in 2008, upfrom US$7.6 trillion in 1993. [C$ figures = $18.2 trillion and $9.8 trillion]
In 2008, Canada and the United States’ inward foreign direct investmentstocks from NAFTA partner countries reached US$469.8 billion. Meanwhile,Mexico has become one of the largest recipients of foreign direct investmentamong emerging markets, and received US$156 billion from its NAFTApartners between 1993 and 2008.
North American employment levels have climbed nearly 23% since 1993,representing a net gain of 39.7 million jobs.
The NAFTA region is home to 444.1 million peple, 33.3 million of whom live in Canada, 304.1 million in the United States, and106.7 million in Mexico.
Trilateral merchanside trade has nearly tripled since NAFTA cameinto force in 1994. It topped $1 trillion in 2008.
One in five jobs in Canada is linked to international trade. Assuch, the North American continental partnership is without adoubt an important competitive advantage for Canada.
The largest and most diversified economy in the world, theUnited States, is a world leader in computers, medicalequipment, and aerospace, and in services including financialservices and telecommunications, and in agriculture.
Within just a few years, Mexico's exports have diversified fromprimarily oil to include an array of manufactured products,making Mexico one of the larges exporters in the world.
What Are the Advantages of NAFTA?:
NAFTAcreated the world’s largest free trade area, linking 444 million peopleand producing $17 trillion in goods and services annually. Estimates are thatNAFTA increases U.S.GDPby as much as .5% a year. That's because it eliminatestariffsand creates agreements on internationalrights for business investors. This reduces the cost of trade, which spursinvestment and growthespecially for small businesses. Eliminating tariffsalso reducesinflationby decreasing the costs of imports. (Source:USTR,Quantification of NAFTA Benefits)
Increased Trade:
 Trade between the NAFTA signatories tripled, from $297 billion in 1993 to $1trillion in 2007 (latest data available). Exports from the U.S. to CanadaandMexicogrew from $142 billion to $452 billion.Exports from Canada andMexico to the U.S. increased from $151 billion to $568 billion.One reasontrade grew because NAFTA provided the ability for firms in member countriesto bid on government contracts. It also protected intellectual properties.
Boosted U.S. Farm Exports:
NAFTA increased farm exports because it eliminated high Mexican tariffs.Mexico is the top export destination for beef, rice, soybean meal, cornsweeteners, apples and beans. It is the second largest for corn, soybeansand oils. As a result of NAFTA, the percent of U.S. agricultural exports toCanada and Mexico has grown from 22% in 1993 to 30% in 2007. (Source:USTR,NAFTA Facts, March 2008)
Created Trade Surplus in Services:
More than 40% of U.S. GDP is services, such as financial services and healthcare. These aren't easily transported, so being able to export them to nearbycountries is important. NAFTA boosted U.S. service exports to Canada andMexico from $25 billion in 1993 to $106.8 billion in 2007 (latest dataavailable). Service exports were $40 billion.NAFTA eliminated trade barriers in nearly all service sectors, which are oftenhighly regulated. NAFTA requires governments to publish all regulations,lowering hidden costs of doing business.
Reduced Oil and Grocery Prices:
 The U.S. imported $157.8 billion in oil from Mexico and Canada (shaleoil).This also reduces U.S. reliance on oil imports from the Middle EastandVenezuela. It is especially important now that the U.S. no longer importsoil from . Why? Mexico is a friendly country, whereas Venezuela's presidentoften criticizes the U.S. Both Venezuela and Iran have started selling oil incurrencies other than the dollar, contributing to the decline in thedollar'svalue.Since NAFTA eliminates tariffs, oil prices are lower. The same is true for foodimports, which totaled $28.9 billion in 2008.
Stepped Up Foreign Direct Investment:
Since NAFTA was enacted, U.S. foreign direct investment (FDI) in Canada andMexico more than tripled to $348.7 billion (as of 2007, latest data available).Canadian and Mexican FDI in the U.S. grew to $219.2 billion.NAFTA reduces investors' risk by guaranteeing they will have the same legalrights as local investors. Through NAFTA, investors can make legal claimsagainst the government if it nationalizes their industry or takes theirproperty by eminent domain. (Source: USTR,NAFTA Section Index)
(Updated December 21, 2009)
Disadvantages of NAFTA:

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