Essay About Foreign Trade And Members Canada

Nafta
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Is NAFTA good or bad for
Canada?
Shehraam Nawaz Janjua
Economics Assignment
Mr. spinelli
18 6 6
What would this island be without foreign trade but a place of confinement to the
inhabitants, who (without it) could be but a kind of Hermits, as being separated from the
rest of the world; it is foreign trade that renders us rich, honorable and great, that gives
us a name and esteem in the world.
Charles Molloy
De Jure Maritimo et Navale, 1676
Even before Charles wrote this in 17th century there was a sense of foreign trade and
its benefits amongst the people. Trade is the reason for the rise of many civilizations such
as the Muslims because the backbone of there economy was the international trade. A
new theory was suggested by a Scottish philosopher Adam Smith in the 18th century that
the economy would grow much quickly if there was no trade barriers, thus this concept
came to be known as Free Trade.
In todays world free trade is flourishing and many economies of the world have made
treaties with each other and declared them selves as one market, these are also called
trading blocs. The major one of these treaties is the NAFTA (North American free trade
agreement), it has three members Canada, Mexico and USA.
Background of NAFTA
Mexicans wanted to make a free trade agreement with USA as Canada did with
CFTA (Can-US free trade agreement), this brought fourth the issue to Canada that either
they would continue the bilateral trade with USA or open there markets further and
include Mexico and turn this agreement into trilateral. So in 1992 the agreement was
made and after a year it was put into affect. NAFTA became the world largest trading
bloc, area of 21,588,638 and a population of 430 million people who produces $12
trillions worth of goods and services yearly (1).
When NAFTA was put into affect, it promised many major impacts on each of they
countrys economy but as the time progressed there had been many questions raised by
the individuals of the three countries, like trade deficits, labor issue, lower wage rate and
the environmental issues. So through this essay paper well see that how is one country
like Canada is effected by NAFTA, to determine that if it is good or bad we have to see
its advantages and disadvantages to Canada.
Advantages to Canada
Canadas goals in the negotiation of NAFTA were very simple. They wanted to improve
their access for their goods and services to Mexico and the United States. Canada wanted
to guarantee their position as a prime location for investors seeking to serve all of North
America. The NAFTA deal has realized these objectives set by Canada and will supply
Canada with a new and sharper edge to their international competitiveness, giving
Canada access to new 85 million possible customers . “The agreement has set a path for
Canada widening their trade horizons, while also giving them a bigger stage on which to
demonstrate their economic expertise and leadership” (2).
Agriculture products play a significant role in Canadas exports to other countries.
Canadas excellent and fertile farming land has produced many great results. A very
superior livestock and excellent crops have contributed to a productive and prosperous
trade of their agricultural products and services around the world. “Canadas total exports
surpasses $13 billion a year”(3). Under NAFTA all the barriers over the agricultural
goods would be lifted thus the farmers would face a lower cost and would gain higher
profits. Incase of livestock Canada also have the edge over other countries because like
Mexico lacks an adequate fresh water supply, their livestock operations arent very big.
Therefore