Analysis Of Modern Multilateral Trade Deals: N.A.F.T.A And The Trans-Pacific Trade Deal

The purpose of this report is to find out the various trade deals Canada have with different nations of the world. We are working in a major Canadian company which deals with multinational markets and as we are appointed in a special project division of business development office and we are given a task to make a report on researching the various trade deals in the world in which Canada is a part of and find out the benefits and drawback of these trade deals and their stability in the ever changing multinational markets. We also have to find out the possible outcomes of the new N. A. F. T. A. deal on all three nations. In the end, we have to select two industries and assess how N. A. F. T. A. will impact these industries and what will be the result on these industries if N. A. F. T. A. ends. This research will be used by our company’s management to understand the major multinational, regional and global trade deals that are in place. The four multinational trade deals that we choose for our research are:

a) N. A. F. T. A.

b) The Trans-Pacific trade deal.

N. A. F. T. A.

The North American free trade deal was made in 1980 between the United States, Canada and Mexico.

History

The original suggestion for N. A. F. T. A. was made by U. S. president Ronald Regan. In 1984 congress passed the trade and tariff act which gave the president direct authority to deliberate free trade deal. The Canadian prime minister agreed with U. S. president to commence deliberations for the Canadian- us free trade deal. The deal was signed by both on 1988 and it came into effect in 1989. After president Regan, president H. W. bush began deliberations with Mexican president Salinas for a liberalized trade deal between both nations. Canada requested a trilateral deal which led to N. A. F. T. A.

Purpose

The purpose of N. A. F. T. A. was to cut down the trading expense, expand the business investment and make North America fiercer in multinational market. The purpose of N. A. F. T. A. is described in article 102 of the deal which states that:

• The nations which signed the deal will be given the status of ‘most favored nations’.
• The trade barriers will be removed and make an easy way for the cross-border movement of goods and services.
• To promote conditions for a fair competition.
• To increase investment opportunities among the three nations.
• To provide safeguard and execution of intellectual property rights.
• To create a mechanism to settle trade disputes.
• To establish a system for further trilateral, regional and multilateral cooperation to enlarge the benefits of trade deals.

Stability & success

In terms of success, N. A. F. T. A. proved successful in all its seven goals which made it world’s largest free trade area in terms of G. D. P. it elevated the competitiveness of all three nations in multinational market. It even helped in recovering the economic growth of china and many other emerging nations. N. A. F. T. A. was a stable trade deal until the formation of trump government in the United States. According to president trump, N. A. F. T. A. was a big mistake and he made some allegations that this deal reduced jobs in us and also suppressed us wages etc. and due to this he demanded to APPENDIX Drenegotiate the deal and recently the deal between Canada and united states has been renegotiated and signed and it is called N. A. F. T. A.

Trans-pacific deal

The Trans- Pacific trade deal: It is a free trade deal between 11 nations that borders the Pacific Ocean.

History

The trans-pacific deal came into effect in 2005 between a small groups of nations situated neat Pacific Ocean. The first nations to sign this deal were Brunei, Chile, New Zealand, and Singapore. Then in 2008, United States president George w. bush declared that the country will join the deal along with a group other nations which were Australia, Vietnam, and Peru. As the talk proceeded, the group grew which include Canada, Japan, Malaysia, and Mexico. In 2017, us president Donald trump withdrew the united states from the deal and on 8 march 2018 the other 11 nations signed a revised deal without united states.

Purpose

The trans-pacific trade deal contains thirty chapters that include tax on goods and services, intellectual property rights, e-commerce rules, labor and environmental standard, dispute settle mechanism, transparency, restrictions on monopolies and state owned enterprises and smooth regulations which make the small businesses to trade across nation’s borders. The motive behind making this deal between these nations is to create a fully united economic area and fixed rules for multinational investment.

Stability & success of trans-pacifc deal

The trans-pacific deal could greatly increase exports and economic growth. It should generate more employment and prosperity for all 11 nations. It will increase exports by $305 billion per year by 2025. it will also benefit many industries such as machinery, auto, plastic and agriculture. The deal adds $223 billion per year to incomes of workers. All the nations accepted to reduce wildlife trafficking which will help elephants, rhinoceroses and marine species. It also restricts illegal and unsustainable logging of forests and fishing and the nations that don’t follow the rules will face trade penalties.

What Is the Trans-Pacific Partnership (TPP)?

After 14 months of political pressure by United States to renegotiate the N. A. F. T. A. deal, On September, 30 2018 there was a revised deal signed by the three nations now named as USMCA-United STATES MEXICO CANADA DEAL. This deal will go into effect in 2020. the possible outcomes of this deal is mentioned by the Canadian Prime Minister Justin trudeau-“It’s an deal that, when enacted, will be good for Canadian workers, good for Canadian business, and good for Canadian families. It’s an deal that removes uncertainty for our manufacturers and investors, and improves labor rights for all North Americans. And it’s n deal that will be profoundly beneficial for our economy, for Canadian families, and for the middle class. ” And according to the U. S. president-“It is a great deal for all three nations, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduces Trade Barriers to the U. S. and will bring all three Great Nations together in competition with the rest of the world. The USMCA is a historic transaction!”