Economic Prosperity of Countries: the Result of Work NAFTA
NAFTA is a free trade agreement policy between Canada, the United States and Mexico which allows the three countries to lift tariffs off the goods produced in the countries. NAFTA stands for North American Free Trade Agreement and came into effect on January 1, 1994, after it was signed by Canadian Prime Minister Brain Mulroney, Mexican President Carlos Salinas, and American President George Bush.
NAFTA resulted in goods coming into the country being sold at a lower price because there were no tariffs on imported items. For Canadian and American diets this was important because they could get foods that grow better in Mexico’s climate, imported into Canada and America for cheaper all year round, thus being cheaper for consumers. Having Canada, Mexico and the United States come together to sign this agreement puts all three countries in a great position because each country is able to ‘specialize’ in producing certain goods which they can send off to the other countries in exchange of the other countries sending over goods that they are better at producing. Along with the positives, NAFTA also affected the first world countries negatively, causing 350 000 jobs to be lost due to outsourcing. This job loss and outsourcing were the result of Mexican labour is cheaper than labour in Canada and the United States. Mexico, on the other hand, had an increase in employment rates, especially in their auto industry which shot up nearly five times prior to NAFTA taking effect. Before NAFTA there were about 120 000 people employed in the automotive industry and after the implementation of NAFTA, the number rose to 550 000. One of NAFTA’s negative effects on Mexico was that the policy contributed to 2 million small scale farmers in Mexico going out of work due to high demands since they were forced to feed three countries on a large scale now. The farmers ultimately were not able to keep up with the high demands. This results in an increase in illegal immigrants crossing the border into the United States for more job opportunities. Many people are opposed to NAFTA because they see this policy has transferred jobs from Canada or the United States to Mexico where the workers are exploited and not compensated adequately for their labour. Canada benefited from the policy by seeing a boost in their agricultural industry. Despite the division amongst the people about the pros and cons of NAFTA being implemented, NAFTA’s benefits out weight the negatives which are why the treaty is still in place.
The North American Free Trade Agreement was created to benefit all three countries involved in the policy. The purpose of NAFTA is to eliminate trading barriers such as all tariffs or taxes on traded goods between Canada, Mexico, and the United States. This partnership is supposed to help boost the economy of each country that signed the policy. “NAFTA also contained provisions aimed at securing intellectual property rights”. Canada, Mexico, and the United States “would adhere to rules protecting intellectual property and would adopt strict measures against industrial theft”. The unintended outcomes were the loss of jobs in all three countries, but their decrease was all due to separate reasons. For Canada, they saw an increase in certain industries because that is what Canada is known and valued for, while it saw a decrease in other areas due to cheaper production and labour costs in Mexico. Mexico saw a rise in labour but a decrease in small farmers because they were unable to keep up with the high demands which were being met by the mass production farming and companies. This caused an increase in illegal Mexican immigrants to the United States in hopes of finding a job. The United States, similar to Canada lost jobs to Mexico because labour and production costs were cheaper. This affected whole towns especially if the town was a ‘factory town’ where the majority of the residents of the town were employed and relied on secure income from one larger company or business. NAFTA allowed for cheaper goods to be imported between the three countries, this changed to the game for seasonal food because now Canada and the United States did not need to eat foods only while they were in season. Fruits and vegetables were being imported from Mexico all year round because Mexico’s climate allowed for their growth. This contributed positively for people and their diets.
All three countries had to adjust to an increase in demand for the goods their country produced. Traded goods are able to be sold at lower prices for the countries that are involved in NAFTA but for the rest of the world’s countries, NAFTA resulted in the opposite effect. The prices of goods were lowered due to the demolishment of the importing costs. Cheaper foods and other goods of course resulted in an increase in demand as well as an increase in consumption. The United States and Canada in particular have seen an increase in consumption of a variety of foods. A few examples of foods that were being consumed at a larger rate were bell peppers and other various vegetables along with fruits. The consumption of leading corporations such as Pepsi and Coca Cola had decreased after Michelle Obama’s influence when she began to push to restrict corporations from marketing products high in sugar, fat, or salt to children”. Overall, the diversity of foods, resources, and goods has increased in all three countries as a product of NAFTA being signed.
As a result of the NAFTA treaty, food security looked different for Canada and the United States than it did for Mexico. Food security is seen differently amongst the first world countries compared to Mexico a third world country. “When Mexicans talk about food security, they mean the security of knowing there will be enough to eat. When U.S. citizens talk about food security, they talk about a safe food supply”. When citizens from Canada or the United States talk about food security, they are referring to always having access to nutritious and healthy foods. NAFTA forced all the countries involved to accept meat, vegetables, and fruits that met the standards of the country they were being exported from, not the countries the goods were being imported into despite the goods not meeting the other countries' standards. The country receiving the products had to accept the goods. Americans have fought for high food safety standards which “includes everything from meat inspections to food processing standards”. It was a concern for citizens of Canada and the United States to get food that likely didn’t meet their standards.
NAFTA has brought together three countries to financially benefit each other and create a treaty that is supposed to strengthen the trust between Mexico, Canada, and the United States. Despite this treaty being signed decades ago, it is still in action today because it creates a mutualistic relationship for each country. Each country is affected both negatively and positively by being a part of NAFTA. NAFTA has allowed each country to thrive economically making them stronger on a global stage.
Works Cited
- Bondarenko, Peter. 2020. North American Free Trade Agreement. November 12. https://www.britannica.com/event/North-American-Free-Trade-Agreement.
- Charzky, Andrew, James McBride, and Mohammed Aly Sergie. 2020. NAFTA and the USMCA: Weighing the Impact of North American Trade. July 1. https://www.cfr.org/backgrounder/naftas-economic-impact#:~:text=NAFTA was a landmark trade,to job losses and outsourcing.
- Government of Canada. 2021. A new Canada-United States-Mexico Agreement. January 1. https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cusma-aceum/index.aspx?lang=eng.
- Jenkins, Lisa Martine. 2018. How NAFTA Destroyed the Mexican Diet. September 19. https://www.eater.com/2018/9/19/17878946/nafta-mexico-america-trade-agreement-farming-diet.
- Khan, Nazmus Sadat. 2020.
