123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Business >> View Article

The Evolution And Impact Of The Nafta

By Author: AlanRussell
Total Articles: 53

The NAFTA has been in existence for a two decades, but its origins reach back further. The tri-partite treaty represents the culmination of a series of prior talks and landmark agreements that occurred on the North American continent – centering on three primary phases – and its impact on trade has been measurable.

While the agreement has had its detractors from the beginning, it is nonetheless apparent that the numbers demonstrate that it has increased the volume of trade transacted between its signatories. This is particularly true in the realm of manufacturing.

An important precursor to the NAFTA was the US-Canada Auto Pact of 1965, which was an answer to strong nationalist pressures in Canada to become self-sufficient in automobile production, the most dominant aspect of manufacturing trade among the two neighbors.

Canada and the US cooperated aggressively to create a broadly based sectoral free-trade accord, in spite of the fact that such a limitation to one industry was in violation of the General Agreement on Tariffs and Trade (GATT) system, which only permits trade agreements that include substantially all of the trade among members. The resulting Pact produced rather balanced and swift growth in the largest manufacturing sector of trade, and was of particular benefit to Canada.

Yet amidst strong opposition in the 1980s, then Canadian Prime Minister Brian Mulroney proposed a far-reaching comprehensive trade agreement to build on the success of the agreement of 1965. US President Reagan encouraged and promoted the move, and negotiations between the countries were concluded in August 1987. The agreement was comprehensive in eliminating tariff and non-tariff barriers to trade, and making provision for more cross-border investment. Only a few sensitive sectors were excluded by both countries. In the next decade, the results once again proved successful with Canadian exports to the US almost doubling from 25% of GDP to nearly 50%.

Capitalizing on the early success of the 1987 agreement, representatives from both countries wasted no time seeking to craft yet another, even more comprehensive, agreement that would expand on this base – this time including Mexico, a developing economy yet to be fully industrialized. In fact, it was Mexican President, Carlos Salinas, who initiated discussions with President George H. W. Bush concerning a North American Free Trade Agreement (NAFTA) in hopes building further upon Mexico’s economic reforms of the 1980s to include a regional and international scope. The presidents of Mexico, the US, and Canada eventually signed the NAFTA in December 1992. It came into force on January 1, 1994.

The impact of the NAFTA on manufacturing is apparent in recent numbers. Manufacturing trade was up in 2013 accounting for 77% of total US exports, and 63% of total US imports. Manufactured exports among NAFTA nations grew by 52% from 2009 to 2013, considerably faster than the 34% export growth with the rest of the world – and NAFTA manufactured exports were more than five times more than the total exports to China. This growth is most obvious in relation to US-Mexico trade with US manufactured exports to Mexico increasing by 69% in 2013, yet only 41% for exports to Canada. The next phase in North American free trade may see Mexico emerge as the biggest winner of all.



K. Alan Russell, President and C.E.O. of the Tecma Group of Companies. Alan was co-founder of Tecma, along with a senior mentor in 1986. During his long and distinguished career, Alan has served as President and Co-Owner of the Reddington Group, President of Reddington Securities, President of Cielo Dorado Development, and for 10 years, as a pilot with Continental Airlines. His experiences as a pilot within Latin America and sustained commitment to commerce between Mexico and the Unites States has made Tecma a national leader of bi-national enterprises. Manufacturing Companies in Mexico, Mexico Manufacture, Mexico Industries

Total Views: 49Word Count: 636See All articles From Author

Business Articles

1. Why To Choose Startups For Career Growth
Author: Nita Desai

2. Opportunities For The Global Optical Film Market To Reach $21.8 Billion By 2023
Author: Lucintel

3. Ugc Recognized, Aicte Approved College
Author: adrianabrainbuxa

4. Valley Stream New & Used Honda Dealership
Author: Honda of Valley Stream is here to help you find th

5. Life After You Graduate
Author: celinabrainbuxa

6. Tips To Order Garden Roses Online
Author: Joseph miller

7. The Latest Developments In Supplier Management
Author: James Maron

8. Use Fr Coveralls To Prevent Fire Burns
Author: tara safe

9. Floral Decoration Ideas Using Baby’s Breath
Author: Raman K Miller

10. How To Choose Perfect Garlands To Suit Your Wedding Theme
Author: albert miller

11. Top Engineering Colleges On Placement Record
Author: thomasbrainbuxa

12. Market Research Report - India Personal Care Appliance Market Outlook, 2023
Author: Aarkstore Enterprise

13. 6 Ultimate Ways To Promote Your Services Using Customized T-shirts
Author: T-Shirt Printing Services, T-Shirt printing

14. Best Practices In Home Care
Author: tanvibrainbuxa

15. Benefits Of Tyre Recycling
Author: Guna seelan

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: