Nafta and Its Effects on Robeson County

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NAFTA And Its Effects On Robeson County, North Carolina
by Russell D. Liggon

Economics 5150 Dr. Shi

NAFTA And Its Effects On Robeson County, North Carolina

Since being signed on January 1, 1994, NAFTA (North American Free Trade Agreement) has opened opportunities between the United States, Canada, and Mexico. NAFTA is considered by GDP standards the largest free trade area. In 2008, all tariffs between the countries involved were completely eliminated. From 1993 – 2009, trading cost has tripled from $297 billion to $1.6 trillion. According to an article History of NAFTA from http://useconomy.about.com, Article 102 of the NAFTA agreement states the reasons for its inception. 1. Eliminate barriers to trade and facilitate the cross-border movement of goods and services. 2. Promote conditions of fair competition. 3. Increase investment opportunities. 4. Create procedures for the resolution of trade disputes. 5. Provide protection and enforcement of intellectual property rights. 6. Establish a framework for further trilateral, regional and multilateral cooperation to expand NAFTA’s benefits. 7. Grant the signatories Most Favored Nation status. ¹The exports for the United States totaled $397 billion and their imports were $438 billion in 2009. The U.S. trade deficit with Canada and Mexico was $41 billion in 2009. In 2010, U.S. exports were $412 billion, and imports were $506 billion. The U.S. trade deficit with Canada and Mexico was $95 billion. Canada and Mexico became the second and third largest suppliers of imports of goods to the U.S. in 2010 with Canada having $276.5 billion and Mexico with $229.7 billion.

¹http://www.ustr.gov/trade-agreements/free-trade-agreements/north-american-free-trade-agreement-nafta

NAFTA And Its Effects On Robeson County, North Carolina
Between the years 1994 – 2010, approximately 682, 900 jobs were lost to Mexico totaling $97.2 billion. 80% of the jobs lost in the United States were manufacturing. States that were hardest hit were New York, California, Michigan, and Texas to name a few. Wage rates among companies within the affected industries that stayed in the U.S. decreased by almost 50% between the periods of 1993 to 1995. Threats of moving the company overseas and the disapproval of unions were factors used by employers to decrease wages. One of the hardest places that were seriously affected by NAFTA was Robeson County, North Carolina. Robeson County is the largest county (by area) located in the Coastal Plains in the Southeastern part of North Carolina. According to the 2000 U.S. Census, the population was 123,339. The population is comprised of 38% Native American, 32% European, 25% African American, 5% Hispanic/Latino, and less than 1% Asian. The poverty rate is 24% and the illiteracy rate is 38%. These factors are strong causes for poor economic and social status in Robeson County. According to the NC Employment Security data, 8,708 manufacturing jobs were lost in Robeson County since 1993. From 1998 – 2003, 9 plant closings were reported. Manufacturing jobs in 1993 accounted for 31% of all jobs in Robeson County. By 2003, manufacturing jobs declined to only 18% of all jobs in Robeson County. Refer to the graph below for manufacturing job decline from 1990 – 2003. Manufacturing jobs declined from 17,430 in 1993 to 6,832 in 2003. These jobs were lost because of the cheap labor in Mexico and other countries overseas.

NAFTA And Its Effects On Robeson County, North Carolina
The unemployment rate for Robeson County increased from 7.6% in 1990 to 9.1% in 2000. The breakdown by race for unemployment is as follows: Whites were 4.4% in 1990 and 6% in 2000; Blacks were 12.6% in 1990 and 16% in 2000; Native American was...
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