Regional Integration for and Against Articles
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Regional Integration For and Against Articles
Regional integration can be defined as “the process by which two or more nation-states agree to co-operate and work closely together to achieve peace, stability and wealth (Carleton, 2012)”.
According to the Executive office of the President of the United States NAFTA developed the largest free trade operation, which connects 450 million people generating $17 trillion in services and goods.
Advantages NAFTA
NAFTA is an acronym for the North American Free Trade Agreement. NAFTA is an international trade treaty combining three countries that dwell in North America (United States, Canada, and Mexico) that started in 1994.
The main advantage of NAFTA is that it removes tariffs which decrease inflation by reducing the expense of imports. Another advantage of NAFTA is that it develops agreements on international rights for venture capitalist which also reduces the cost of trade, which stimulates growth, and investment for small businesses. Third, NAFTA provides the ability for firms in member countries to bid on government contracts. Fourth, NAFTA also protects intellectual properties. The NAFTA partnership strengthens the supply chain to and from plants in Mexico, which pushes growers and producers to meet the needs of an increasingly sophisticated world and market (Amadeo, 2012).
Disadvantage NAFTA
Regardless of the advantages NAFTA provides, many businesses are challenged when it comes to exporting goods to Mexico and Canada.
NAFTA has many disadvantages including the exploitation of Maquiladora workers, however the most crucial disadvantage is that NAFTA made it possible for U.S. manufacturers to move jobs to Mexico because labor is cheaper which made the remaining manufacturers lower wages to compete. Another disadvantage was that farmers in Mexico were put out of business by U.S. subsidized farm products. U.S. jobs were lost due to the businesses moving to Mexico, since Mexico has cheaper labor many business moved part of their production from the United States which was much higher. Mexicos farmers were put out of business because due to the treaty, Mexico lost 1.3 million farm jobs. The environment in Mexico declined because of competitive pressure by NAFTA, and Mexico farmers were forced to use more chemicals and fertilizers, costing Mexico $36 billion a year in pollution (Amadeo, 2012).
Conclusion
There are many advantages and even more disadvantages to NAFTA; however Since NAFTA was created, U.S. foreign direct investment (FDI) in Mexico and Canada has tripled to $357 billion in 2009. The Mexican and Canadian FDI also grew to $237 billion.
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