Has NAFTA been a good thing or a bad thing and should the U.S. pursue?

Question

and should the U.S. pursue

more free trade zones ( CAFTA, Anglosphere, etc.)?

Answer 1

It is great for consumers, for that competitive market offers great prices.  But bad for the American economy.  This allows corporations to outsource jobs to mexico and canada for that matter in order to aquire cheap labor.  This causes unemployment in the United States, and decreases its production.  Also the ability to import cheap goods further deteriorates the economy causing a higher unfavorable balance of trade.  This lowers the GDP of the US greatly.

Answer 2

it's bad. when you actually read it, only Mexico benefits from it

Answer 3

If your rich and have job security it's great.  If you are middle to upper middle class it can hurt and be downright painful sometimes.  If you are poor and always have been you will never know the difference.  

It guarantees a steady flow of Canadian natural resources at regulated (in Americas favour) prices, tariffs and taxes.  It almost guarantees cheap Mexican domestic labour forever.  Any future agreements will only create more international competition thus putting more downward pressure on North American domestic economies.

Now there seems to be a direct bypass to international trade in the form of outsourcing.  This is like a kick in the you-know-what and it puts a lot of people out of work.

I am the Fringe (a victim of the first FTA) and there is nothing free about these trade agreements and the costs are measured in the loss of good paying jobs.

They should be called Free Greed Agreements because that is what's it's all about.

Answer 4

It has been horrible for the US, wonderful for Mexico. I would hope that no more of these free trade zones would be pursued.  The minimum wage has NOT been increased!  That bill passed the first leg of the way to only get stuck in the other because of all the pork that had been added to it!

Answer 5

I find it interesting that when you examine the arguments for and against free trade arguments, both sides argue in different terms.

Those who are for free trade agreements argue in economic terms (efficiency gains, lower transaction costs, trade expansion, etc..) while those against free trade agreements argue in national and cultural terms (dilution of culture, sovereignty, migration...).

The problem is that there will always be benefits and drawbacks to any of these agreements. The real question is whether or not the benefits outweigh the drawbacks? and whether the absence of a free trade agreement is more beneficial than having one?

All of the arguments against NAFTA that the other posters have provided are all valid, but ignore the benefits. Trade has increased 129% between Canada, Mexico and the US since NAFTA was signed with very little trade diversion. This is not an insignificant benefit.

NAFTA has also created North American solidarity. Increasingly relations in North America are being framed in a trilateral nature.

The US administration must also see free trade agreements as beneficial.  The US has bilateral agreements with the following countries and blocs:

Australia/U.S.-Australia Free Trade Agreement (signed and ratified 2004; implemented 2005)

Bahrain/US-Bahrain Free Trade Agreement (signed 2004; ratified 2005; implemented 2006)

Chile/US-Chile Free Trade Agreement (signed and ratified 2003; implemented 2004)

Israel/US-Israel Free Trade Agreement (signed, ratified and implemented 1985. The Palestinian Authority is also participating.)

Jordan/US-Jordan Free Trade Agreement (signed 2000, ratified and implemented 2001)

Morocco/US-Morocco Free Trade Agreement (signed and ratified 2004, implemented 2006)

Oman/US-Oman Free Trade Agreement (signed and ratified 2006)

Singapore/US-Singapore Free Trade Agreement (signed and ratified 2003, implemented 2004)

This is most likely because of slowing negotiations at the WTO. As these negotiations creep to a halt, the US is securing its trade interests bilaterally arranging a hub-spoke system with the US in the middle. This will not only provide benefits economically by securing US interests, but also geo-strategically. Having the US in the center of this arrangement augments their power even further and allows them to wield even greater influence. It is all about the neo-liberal economic bargain whereby states are allowed to participate in economic exchange with the US so long as they have a market economy, democratic government, strong rule of law and so on. It is a type of remote control from afar where institutions are created with "embedded liberal ideals" which serve the interests of the US in terms of economic benefits and international security.

Therefore, it is in the interest of the US to pursue free trade agreements because of the economic and geo-strategic benefits.

While it is true that jobs migrate to Mexico or overseas as a result, this is for a reason. Because peopel living in advanced democratic states should not be employed in the manufacturing sector when those overseas can manufacture the same goods for a fraction of the cost. North America has moved from the grain to brain economy and it is only inevitable that these jobs will go overseas. This is not all negative as these production capacities will be reallocated towards making goods that Americans have a competitive advantage making, or to the service sector of which 4/5 jobs in NA are now in. Also, these goods will now be available at a lesser cost, as they are manufactured for less which means that the average working American's paycheque will go further.

***edit***

Kenaldinho,

You can not argue that NAFTA has increased illegal immigration considering that it does not open up the border to the  free movement of labour. NAFTA is about the free movements of goods and services. You also can not claim causation simply because two events occured in the same time period. Just because the number of illegal immigrants increased after the signing of NAFTA this does not mean that NAFTA caused the increase. If anything (and especially considering that everyone is worried about their jobs going to Mexico) NAFTA should slow the flow of illegal immigrants from Mexico as low wage jobs migrate there from Canada and the US.

Answer 6

These free trade agreements are troubling.  We start outsourcing industries that are vital to our survival, and before you know it other countries start using that as leverage against us.  Let's say that we need to be in some trade group in order to remain competitive.  The other nations in that group could take an issue, such as gun control, label it as some sort of human rights issue, and then make us change our policy on that issue in order to join the group.  Many cultures may be destroyed in favor of one world culture.

Answer 7

brodier 182 has provided an in-depth analysis of what free trade is.  

Yes trade has increased, but before NAFTA was signed there were only 4 million illegal immigrants in the United States.  Now there are 12 million.  

Not all jobs are fleeing the country; in fact, h-1 visas are being handed out in record form because people in the United States are not qualified to perform those high end jobs.

NAFTA has brought more illegal immigration to the United States.  If you look in non-hispanic states, like Indiana, Alabama, and Michigan.  The Hispanic population has grown over 200%.  They are not just cleaning or cutting landscape.  They are working for Purdue Chicken, Marble and Tile Compnaies, and even in economic development companies.

Now is this a benefit or a cost??  Well the latter is debatable.

Mexico has not benefited from NAFTA because their currency still viewed with the same eyes as before.  Also free trade has a big misconception, the goods which enter the U.S. are tailored to American taste and they are in many instances made in America.  Corona has its bottling plants in Chicago.  

Free Trade was also supposed to bring the three cultures together, but it has not.  Americans and Mexicans have had more disputes than resolutions after 1992.  The War in Iraq and the Immigration debate are two clear form of the latter.  

The question is not whether free trade is good or not for the United States, but whether the benefits of the latter are real to the foot citizen.  

Minimum wage went up and so did quality of life, but that has a lot more to do with the dot.com boom than with NAFTA.

There needs to be a comprehesinve review of NAFTA....and only then can we assert what did we gain or what did we lose

Answer 8

It has had a negative effect in my opinion. If any free trade agreement should be reached with a country that is not of a comparable economic level with the United States measures should be in place to make it fair (labor regulations, safety standards, environmental protections). I am not a proponent of free trade, but, with globalization in the 21st century, this is how world trade is going. Every measure should be in place to make free trade agreement fair to both sides, because free trade does have its benefits.

Answer 9

It is good for mexico, bad for the USA