Question

What is NAFTA? Which countries are involved and why was it established? What evidence is there of positive economic outcomes since NAFTA was established?

Some believe NAFTA has been a “failure”, including President Trump, and has had negative outcomes, particularly for the US. What negative outcomes for the US have been raised?

After difficult discussions, the NAFTA agreement has been renegotiated with Canada and Mexico. Read several articles below regarding the renegotiated USMCA deal.

3. How do you think the US will benefit from the new agreement (USMCA) versus the original NAFTA agreement? Give examples of improvements.

4. Are there any potential issues with the new USMCA deal for the US? Explain. The new deal must be approved by the US Congress? Do you think it will pass? Yes or No? Why do you say that?

Answer 1

First of all NAFTA is North American Free Trade Agreement.

Basically the NAFTA is an agreement signed by US, Mexico and Canada to establish a trilateral trade bloc in North America.

When we talk about positive outcomes of NAFTA we must know that it greatly increased the trade relations between US, Canada and Mexico since it came into force. Secondly, it increased economic output to a great extent. Thirdly it reduced and eliminated tariffs.

The shortcomings of NAFTA may be measured as it increased income inequality in US. Besides it also created unemployment in a greater scale. Third it reduced the fringe benefits of workers. Fourthly it reduced their power of trade unions. Fifthly, it has suppressed real wages for production .

3.) The US will benefit from USMCA as it brought about many changes in contrast to to NAFTA.

It laid down that the automobile companies must produce at least 75 percent of car's component in Canada, Mexico or US.

It provides far more better to parents and trademarks.

It opened up the dairy farm in US

It U.S. drug companies can sell products in Canada for 10 years before facing competition.

It laid down that that Mexican trucks musay down safety standards before Crossing borders.

4.) The Potential issue which was faced was there was some tariff imposed on aluminum and steel which were being imported from Canada and Mexico. The reason why the tariffs were imposed was mainly to enhance security.

The deal should pass as it has better scopes of improved economy as it will enhance the trade relations as well as it will increase output to a great extent.