The Pros And Cons Of NAFTA

The marketing environment is constantly changing, posing new solutions and creating new problems every day for consumers and marketers alike. The North American Free Trade Agreement is no exception to this trend. NAFTA was an agreement signed on January 1st, 1994 by Canada, Mexico and the US to create a trilateral rules-based trade block in North America. All tariffs between the three countries were eliminated with the final one to go on January 1st, 2008. With 450 million people producing $17 trillion worth of goods and services, the trade bloc is the largest in the world. (1) The agreement has been unprecedented in its uniform rules to cover such a vast area and volume of trade. Despite some controversy, there are numerous advantages to the NAFTA agreement being in place. Elimination of the tariff made it easier for consumers to purchase goods between the three countries and therefore increased trade between the countries. (2) Wages increased across all three countries; although changes in wages to a specific
Mexican workers have benefited less than expected from the free trade. Instead of creating quality lives with decent pay, Mexican labor has been cheap and provides a poor quality of life for workers. Also, NAFTA lifted tariffs, but not regulations. Due to the political and regulatory environment, even without tariffs, there are still plenty of government-imposed barriers to trade. (2) Some believe that NAFTA is more of an investment agreement than anything else in that, “Its core provisions grant foreign investors a remarkable set of new rights and privileges that promote relocation abroad of factories and jobs and the privatization and deregulation of essential services, such as water, energy and health care.” (3) NAFTA affected many different aspects between the three countries’ macro-environmental marketing