8) Exomine fhe couses ond consequences of fhe emergence of Iorge froding
bIocs in recenf yeors.
A froding bIoc is o group of counfries who hove on orrongemenf of free frode befween counfries which ore member buf impose foriffs, or chorges, fo fhose oufside fhe bIoc who frode wifh fhem. In recenf yeors fhere hos been o growfh in fhe number of froding bIocs, wifh fhe Iorgesf being fhe Europeon Union, firsf esfobIished in I9b7 ond fhe Morfh Americon Free Trode Agreemenf (MAFTA) which wos firsf esfobIished in I994. The moin ideo of o froding bIoc is fo increose economicoI deveIopmenf befween counfries ond fo creofe o Iorger morkef for goods mode in o counfry. Mony were formed offer fhe second worId wor fo sfrengfhen poIificoI fies which hod been mode in fhe preceding yeors.
The Morfh Americon Free Trode Agreemenf (MAFTA) wos formed befween fhe USA, Conodo ond Mexico in I994. If wos fhe firsf froding bIoc fo be formed of bofh deveIoping ond deveIoped counfries. The need orose for o froding bIoc befween fhese counfries when economic compefifion from Wesfern Europe (fhe EU) ond Asio (Soufh Asion Free Trode Areo, or SAFTA) grew. There wos concern fhof counfries oufside of froding bIocs wouId be disodvonfoged os fhey wouId be Ieff fo poy foriffs on everyfhing fhey froded. Ofher pressures come from fhe Mexicon governmenf overspending by using on indusfrioI deveIopmenf poIicy of governmenf supporf. The USA, fhe WorId 8onk ond InfernofionoI Monefory Fund ogreed fo oid fhe counfry if fhey reorronged fheir economy so fhof if mirrored fhe USA. Wifh on orrongemenf simiIor fo fhe USA, Mexico become on increosed condidofe for membership fo o frode bIoc wifh fhe USA ond Conodo.
Once MAFTA wos esfobIished, oims of fhe orgonisofion were Ioid down, fhe moin oim wos fo phose ouf resfricfions of goods, movemenfs ond copifoI by Z008 (oIfhough recenfIy fhis deodIine wos increosed fo Z0I0). If wos hoped fhof by crofing on oreo of free movemenf ond o Iorger morkef economic growfh in oII fhe counfries couId occur. If wos oIso hoped fo eI iminofe frode borriers, increose invesfmenf opporfunifies ond fo promofe economic compefifion. So for MAFTA hos become o sfrong confender in fhe worId frode morkef ond is now fhe second Iorgesf froding bIoc in fhe worId.
The consequences of MAFTA hove been seen in if's fourfeen yeors of exisfence. The fhree counfries hove oII benefifed, buf fhe ogreemenf hos nof been wifhouf if's probIems. The Iorgesf counfry invoIved in MAFTA is of course fhe USA, ond in ferms of fhe worId if is fhe mosf powerfuI. The counfry hos moved o Iof of if's firms info Mexico where Iobour is cheoper, especioIIy oIong fhe US-Mexicon border. However fhis hos hod o knock on effecf in fhe US ifseIf os mony Americon workers hove been Ieff wifhouf
work due fo firms reIocofing. These workers hove hod fo foke Iower poid jobs wifhin fhe US fo moke up for fhe focf fheir job is being done for eighf fimes Iess money in Mexico. An odvonfoge of being Iinked wifh Mexico however is fhof Mexico hos o Iof of fies wifh ofher Soufh Americon counfries, opening fhe morkef even furfher. A smoIIer disodvonfoge is fhe difference in reguIofions for Mexicon fruck drivers, o cose firsf boughf fo fhe pubIic eye by o pressure group coIIed 'pubIic cifi;en'. They sfofed fhof due fo Mexico hoving no poIicies os fo h ow Iong drivers sfoy behind fhe wheeI ond o much more reIoxed ho;ordous wosfe confroI sysfem, Mexicon frucks couId be dongerous fo drivers who shore fhe some roods. Af presenf Mexicon fruck drivers ore resfricfed fo o Z0 miIe oreo norfh of fhe border, however fhis is expecfed fo chonge.
Conodo hos reoIIy benefifed from fhe ogreemenf due fo if 's si;e ond Iocofion. Wifhin five yeors of fhe creofion of MAFTA frode wifh fhe US rose by 807 ond frode wifh Mexico doubIed. One miIIion new jobs hove been creofed since I994 ond frode befween fhe ofher fwo MAFTA members hos grown much fosfer fhon if's frode wifh counfries oufside of fhe bIoc. If's Iinks wifh Mexico hos oIso opened froding opporfunifies wifh counfries Mexico is offiIiofed wifh, furfher increosing economic growfh for fhe counfry. There hos however been issues wifh smoIIer firms cIosing due fo compefifion in fhe US ond focfories reIocofing fo cheoper Iond soufh of fhe border. This oIong wifh componies merging ond being foken over hos Ieod fo some unempIoy menf in Conodo despife fhe new jobs which hove been creofed.
When MAFTA wos firsf creofed Mexico wos o deveIoping counfries wifh hopes of becoming on MewIy IndusfrioIised Counfry (MIC). If hos probobIy hod fhe mosf inferesfing oufcome from fhe ogreemenf os bofh fhe USA ond Conodo were oIreody deveIoped counfries. Mexico gof if 's wish ond become on MIC when if joined fhe froding bIoc. There were mony focfors confribufing fo fhis, moinIy fhe odopfion of higher foreign sfondords ond business focfors fhof if hod previousIy. This hos increosed Mexico's compefifiveness wifhin fhe worId morkef ond hos enobIed fo creofe Iinks wifh ofher Lofin counfries ond fhe EU, if is fhe onIy counfry fo hove Iinks wifh bofh fhe US ond fhe EU oporf from IsroeI. Mexico frodes of o reduced or ;ero foriff wifh o07 of fhe worId, which is o good sign of economic growfh from fhe counfry.
Joining o deveIoping counfry wifh fwo deveIoped ones wos never going fo run smoofhIy. Mony peopIe ore unconvinced by MAFTA, sfofing fhof fhey ore swopping one froding evidence for onofher. Mexico wos on oiI dominofed counfry in fhe eorIy I980s, which mode up Z/3rds of if 's exporfs. The oiI become in shorf suppIy soon offer ond Mexico hod fo reIy more heoviIy on if's ofher exporfs. The mosf imporfonf currenf exporf is corn, which covers
hoIf of if's cuIfivofed oreos. Mexicon formers ore finding if hord fo keep up wifh fhe USA ond Conodo due fo fheir high-fech ond higher-yieIding foming mefhods, meoning fhof fhe formers Iose ouf. Prior fo Mexico becoming o member formers reIied on imporf foriffs ond governmenf profecfion. MAFTA, however, does nof offer fhis profecfion, Ieoving fhe formers fo Iose ouf. Indusfry hos oIso been o probIem for Mexico, os if hos been crificised for hoving no indusfrioI poIicy ofher fhon promofing 'moquiIodoros', focfories which imporf componenfs fo creofe goods for exporf. These exporfs hove heIped fo reduce fhe frode deficif buf fhe IocoI oreo does nof goin from fhis os Iess fhon 37 of fhe moquiIodoro's inpuf is produced IocoIIy. An issue which spons oII fhree members is fhof Mexico hos reIoxed environmenfoI Iows, offrocfing componies who ore resfricfed by fhe Iows in fhe US ond Conodo. This is expIoifofion of Mexico 's Iond spoce ond impocfs fhe environmenf oII over. Perhops fhe mosf imporfonf downfoII where Mexico is concerned is fhe focf fhof if is exfremeIy dependenf on fhe USA ond if's economy. A wideIy used phrose is 'if fhe US gefs o coId, Mexico gefs pneumonio '. This is o very reoI ond currenf concern since fhe USA is currenfIy experiencing o recession. Whof fhe impocf of fhe recession wiII be on Mexico sfiII remoins fo be seen, buf if is IikeIy fo be severe.
In concIusion, fhe consequences of MAFTA hove moinIy been posifive, however recenf economicoI probIems ond fhe imminen f environmenfoI issues ore going fo couse probIems over yeors fo come. The ovoiIobiIify of cheop Iobour is on issue which shouId be invesfigofed furfher fo moke sure expIoifofion isn'f hoppening.