4.

0 ADVANTAGES AND DISADVANTAGES OF AFTA

There are many advantages and disadvantages of AFTA . When two or more countries
reach an agreement to reduce barriers to import and export markets, this is referred to
as free trade. These treaties typically feature a mutual reduction in charges, taxes, and
tariffs so that each country's economy can benefit from the many trading opportunities.

The first advantage of AFTA is, Economic growth opportunities are created by free
trade. North American free trade agreements helped the US economy grow by an
average of 0.5 percent per year faster than it would have otherwise. When countries are
able to freely move goods across borders, each nation gains access to the
manufacturing, commercial, and industrial strengths of every other economy in the
agreement. That means there are fewer cost burdens to worry about with each
transaction, prices remain lower, and market competition can be healthy.

The second advantage is, It reduces the amount of tax that consumers and businesses
pay. The inclusion of tax and investment protection in free trade agreements allows for
more efficient protection of local business owners' interests. When these safeguards are
removed, the result is that more competition from global agencies can occur at the level
of consumption, which tends to favour the consumer. This advantage reduces market
stagnation, but it comes at the expense of excluding smaller businesses from the
equation. Lower assessments and fewer entry barriers can also result in lower pricing
for customers.

Other than that, AFTA also increased access to skilled workers is made possible by free
trade. Automakers sent jobs to Mexico as a result of NAFTA, then decided to import the
vehicles back to the United States due to the favourable tariff policies. Although this
issue resulted in the loss of some jobs for American workers, it also provided
businesses with the opportunity to find workers with the necessary skills from almost
anywhere in the world. By looking to foreign markets for assistance, manufacturing
costs are kept low, allowing for competitive pricing.
This advantage also implies that this approach can benefit multiple economies around
the world. It is one of the reasons why India now has one of the world's fastest-growing
Middle Class sectors.

DISADVANTAGES OF AFTA

The first disadvantage of AFTA is worker protections are not always in place in the
developing world. Developing countries and emerging markets rarely have the same
laws in place to protect employee wages and working conditions. Some countries even
allow the employment of children for factory jobs or heavy labour needs that place them
in dangerous, substandard conditions. Some Jordan garment workers may work
20-hour days, not receive a paycheck for months, and then face jail time or physical
abuse from supervisors if they complain.

The reason for this disadvantage is the demand for competitiveness in free trade. The
goal is to eliminate all restrictions so that consumers can keep track of their spending.
That means that compromises are possible, such as promoting poor working conditions
that workers must endure if they want to continue earning a living for their families.

The second disadvantage is environmental protections are minimal in free trade.The

environment is rarely protected by free trade agreements. The goal for businesses in
developed countries is to exploit natural resources in other parts of the world where
restrictions or regulations are less stringent. The emphasis then shifts to the easy to
purchase methods of producing goods or providing services. Strip mining, clearcut
logging, and other problematic behaviours can contribute to global emissions, even if
they do not appear on their domestic scoreboard.

The developing world frequently trades short-term gains for long-term issues. Money
from natural resource trading can be used to fund government operations or to
encourage corruption, benefiting the wealthy while the working poor struggles to
survive. The money from this initial investment will eventually disappear unless new
industries appear.

The last disadvantage of AFTA is there can be opportunities for immigration

outsourcing. When NAFTA was first established, it made it easier for people in North
America to travel to or immigrate to all three countries. Your living situation could be
accelerated if you possessed a specific skill set thCompanies do not always outsource
jobs, but people can outsource themselves as population movement restrictions loosen
in a free market.at was in high demand. To some extent, the current version of the
USMCA allows for this as well.