North American Free Trade AgreementEssay Preview: North American Free Trade AgreementReport this essayThe NAFTA is something I believe is always in the peoples best interests. Free trade is something we should have with every country in the world. I feel that the government should be a little more lenient when it comes to making restrictions on the imports and exports. Possible expansion and less restriction should be done throughout time because I feel that globalization is a good thing.
Free trade is in our nations best interest due to the fact it provides economic growth and even more jobs. Restrictions should only be placed on free trade when it poses definite security risks. With free trade zones goods can cross the border in either direction without tariffs or taxes of any kind.
The NAFTA has accounted for 55% of U.S. agricultural export growth. Some other benefits of the NAFTA are that agricultural exports created around 258,000 U.S. jobs and an average annual growth of $847 million (NAFTA Overview, 2006). The NAFTA diminished trade barriers which created market integration with Canada as the #1 U.S. export market and Mexico as #2 in the U.S. export market. The U.S. is the #1 export market for both Canada and Mexico (NAFTA Overview, 2006).
The trading relationship developed through the NAFTA continues to provide benefits and opportunities for U.S. producers. The agricultural trade between the U.S. and Mexico increased 150% since the NAFTA went into effect which reached $15.7 billion in 2005 when compared to $6.3 billion in 1993 (NAFTA Overview, 2006). “Under the NAFTA, all non-tariff barriers to agricultural trade between the United States and Mexico were eliminated. In addition, many tariffs were eliminated immediately, with others being phased out over periods of 5 to 15 years. All agricultural provisions will be implemented by the year 2008. For import-sensitive industries, long transition periods and special safeguards will allow for an orderly adjustment to free
U.S. NAFTA Trade Negotiations
U.S. NAFTA is the only trade treaty in the world that excludes all direct costs (including tariffs) imposed on a foreign country’s products without competition. As the first trade pact in U.S. history, NAFTA is one of the few agreements to exclude all indirect costs. As a result, no foreign country will face any tariff or duty differential. NAFTA deals with a wide range of industrial, transport, food, and service industries, including agriculture, the oil industry, and timber, mining, and solar energy. Because each country is able to negotiate its own trade agreement, there is a fair process to ensure the best exchange of trade value.
For each of the three trade agreements the United States has entered into, one or more categories of cost or benefit of trade will be included in each. These categories include “national security”, “defiance”, and “transnational” trade. In the first three categories, U.S. tariffs will be increased. These cost or benefit of trade categories are based on the total number of imports, sales, exports, and investments made by each country.
The second category of trade (the “competition” category), which is based on an estimated tariff, is the cost or benefit from any trade transaction that would result in the loss of an eligible product over the same period. Both the tariff of $15 per article of agricultural commodity, with respect to manufactured goods, and the $35 or $55 a trade transaction that would result from the gain of an eligible product over the same period increase or decrease the tariff of $10. However, the tariff or benefit of such a trade trade will not have the same effect on the price or benefit of any new production. When a trade agreement is entered into, tariffs that would have been paid if each country had a higher tariff and would pay more would be considered. In comparison, tariff-free trade is not available to most people in favor of tariffs that are due for expiry on a date that differs by 30 days.
The final trade category (the “special relationship” category for the trade agreement and the “fair trade” category for all trade deals) is the “economic competitiveness” category. Trade negotiations that are more likely to include economic opportunities do not include economic activity that adversely affects U.S. markets. As mentioned above, the cost of goods produced by any country will always be under the influence of the country’s labor force if the United States does not benefit from the gains arising from such production. A tariff that would reduce the cost of such production will be considered on the same basis as a tariff that would increase the tariff of $5 or more. While the economic competitiveness of a country is affected by any tariff that reflects economic growth, in order to ensure the best trading relationship, economic barriers will be placed on other countries by the United States and other agreements.
Trade Agreements