Pest Analysis on Nafta

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Utilising a PEST framework, explore the ways in which your chosen regional organisation shapes the environment for business in that region.

NAFTA

Contents_____________________________________
Page
Executive summary....................................................................................... pg Introduction..................................................................................................... pg 1.0 Aims and Objectives…………………………………………………………. pg PEST analysis............................................................................................... pg 2.0 Political ……………....................................................................... pg 2.1 Economical ……………................................................................. pg 2.2 Social ……….................................................................................. pg 2.3 Technological ………………………………………………….……… pg 3.0 Conclusion............................................................................................... pg References..................................................................................................... pg Bibliography…………………………………………………………………………….. pg

Executive Summary
NAFTA first put forward by Mexico to the U.S. and Canada was established in 1994 creating the world’s largest free trade area, connecting 444 million people and producing $17 trillion in produce and services. The report to follow provides an analysis of the North America Free Trade agreement signed by the governments of Canada, Mexico and the United States, forming a trilateral trade bloc in North America in 1994. As of January 1998 all tariffs on goods made in these three countries with the exception of a few items, became duty free between the three countries. NAFTA promoted the free flow of goods, investment and services within the North American bloc, NAFTA is the most daring political economy experiment ever to have occurred in the western world. Mexico is the thirteenth largest economy in the world and is one of the major exporters in raw materials and manufacturing worldwide. The country’s economic activity is largely fused with the U.S. The agreement of NAFTA was to encourage trade among the three countries in light of improving the economies in all three countries. Trade between the nations grew by 10% per year. The huge increase in trade along the borders has allowed opportunities for new and existing businesses hence the reason as to why so many businesses have relocated to Mexico taking advantage of the free trading among up and coming economies. NAFTA has not only benefitted the economies of North America but has also caused issues to arise and cause disruption to parts of the economies for example agriculture in Mexico; the displacement of farmers who have been forced to give up their livelihoods as there is no future left for them in the region as it has been passed on to its neighbouring country America. Economy has boosted over the years and the multicultural society has become widespread across North America as migration has soared as many people have crossed the borders in search for jobs and a better way of life. Canada’s employment rates have also increased in recent years. NAFTA has made it possible for many U.S. manufacturers to move jobs to lower cost Mexico. NAFTA has had the most impact on Canada with its gross domestic products measuring at 3.6%, growing faster than the United States at 3.3% and Mexico at 2.7%. NAFTA trade now accounts for 30% of all U.S. trade. Introduction

The NAFTA secretariat is an organisation compromising of a Canadian, Mexican and a United States section. The North America Free Trade Agreement is an agreement for free trade between the three countries. It became effective in 1994 for 10 years and continues today. Since the establishment of the NAFTA legislation other organisations have also been involved with NAFTA to enhance trading amongst nations...
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