The Pros And Cons Of NAFTA

NAFTA is a trilateral free trade agreement among the United States, Mexico and Canada; which came into force in January 1994. In 1992, and on the eve of the deal, John Martin, CEO of a USA-based textile company, has to come to a really tough decision: move production to Mexico or wait for an imminent bankruptcy. Martin, as the vast majority of the US population did not understand how this agreement could beneficiate the country at all.
Opponents of NAFTA would argue that the treaty should not be adopted because of the negative impact it would have on employment in the United States, particularly in industries such as textiles, a labor intensive industry in which the price of labor is crucial. Free trade with Mexico, a much cheaper labor country, would mean that US production could no longer be competitive and many plants would have to close.
I will only suggest the first option in the case of serious economic hardship as it would imply a loss of management control. Your outsourcing company will not be driven by the same standards and mission that drives your company. They will be driven to make a profit from the services that they are providing to you and other businesses like yours. If you rent your own plants even though you will need to handle settling costs and personally deal with selection and recruitment, you will have more tools for quality control and branding. If the company is in serious danger of bankruptcy then he could also bear in mind the possibility of moving to China. But this option would bring more problems as transportations costs, tariffs, dealing with a total different continent, etc. Moreover, Mexico is seen as having more credibility as a labor market and is viewed as not having the violations of human rights and below-par labor practices. The difference in wages between Mexico and Asia seems low to make such a costly