The North American Free Trade Agreement (NAFTA) went into effect in 1994. The agreement eliminated tariffs and import quotas between the United States, Mexico, and Canada. The agreement has generated a GDP of more than $20 trillion for all three members. It also enables grocery and gas prices to be lower in the United States. It created 5 million jobs in the United States. Trade and economic growth have increased in all three countries. NAFTA has also made Canada, Mexico, and the United States competitive compared to China and the European Union (EU) in the global market.
Although NAFTA has various benefits, many Americans have opposed it. The deal has taken away manufacturing jobs from American citizens and workers. In a 2011 report from the Economic Policy Institute that there were around 682,900 jobs lost from the implementation of NAFTA. For the people who continued in manufacturing jobs, wages were lowered to accommodate the creation of jobs along the border. Sadly, Mexican workers are also exploited for their work when it was brought into agreement. Additionally, it had environmental costs in Canada and Mexico.
The trade agreement also increased the number of illegal immigrants residing in the United States. Mexican farmers lost their work as the U.S subsidized farm products to Mexico and the price was much lower than the locally grown food. As a result, they were forced to cross the border to find work to support their families. In 2014, there were about 5.8 million illegal immigrants living in America.
Last year, Trump called for a new deal to be ratified by Congress. The United States-Mexico-Canada Agreement (USMCA) aims to lower the trade deficit between the U.S. and Mexico. The deal makes changes to manufacturing cars and trucks, the dairy market and will give more protection to Mexican workers. Although Trump disagreed with NAFTA, the USMCA seems to be the same as NAFTA with a few changes. It is planned to go into effect in 2020.
Still, the question remains if NAFTA/USMCA has more benefits than losses. Considering global warming, is the exploitation of land for factories and oil production worth it? If the trade agreement ended would it lead to less illegal immigration? On a moral spectrum, these trade agreements have more losses while on the economic spectrum it has tremendous benefits for all three countries.
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I think this is an interesting take on NAFTA. Overall I believe it is beneficial for both countries. We can get cheaper goods while providing work for Mexico. Although we are losing jobs we are also forcing our workforce to shift from unskilled laborers to more skilled of specialized things. I think this is overall positive because they will find work more suitable for the age of technology.
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