Question

In: Operations Management

1. How has NAFTA impacted the U.S.? Overall, do you believe that it was a positive...

1. How has NAFTA impacted the U.S.? Overall, do you believe that it was a positive move for the U.S.? Why or why not?

Solutions

Expert Solution

NAFTA (North American Free Trade Agreement) impacted U.S both positively and negatively-

Positive impacts are-

1. It reduces and eliminate tariffs, it result into greater trade

2. It increased economic output (According to U.S. International Trade Commission NAFTA implementation would increase U.S. growth by as much as 0.5% a year.

3. Stronger growth created jobs

4. Foreign direct investment increased

5. Lowered the prices of many commodities

6. Helped in government spending

Negative impacts-

1. Job losses in U.S.

2. Job migration was there and it resulted into suppressed wages

3. Allowed other country’s transport

4. Some U.S. factories suppressed wages

5. Illegal migrants came to U.S.

6. U.S. unions lost leverages

NAFTA’s benefits may overweight its disadvantages. From an economic perspective it is success and a positive move for the U.S. It fundamentally reshaped U.S. economic relations with other countries which were the parts of this agreement.


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