North American Free Trade Agreement (NAFTA)

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Pros and Cons of Foreign Investment Case #2
The North American Free Trade Agreement (NAFTA) was enacted in 1992 between the United States (US), Canada, and Mexico and began its enforcement January 1, 1994 (Villarreal & Fergusson, 2014). The agreement was enacted to reduce the barrier of trade between the three countries by eliminating tariffs with the goal of increasing prosperity within the countries. NAFTA was opposed by many who saw the agreement as detrimental to US jobs, while proponents argued the agreement would in fact increase jobs in the US. In its twenty years of enforcement, many pros and cons of the agreement have been experienced.
Positives of Foreign Investment Effects One of the arguments presented by the AFL-CIO regarding …show more content…

Organizations exporting to countries such as Mexico where the Peso is far weaker than the US dollar, experience less costs as exorbitant tariffs charged to organizations of non-NAFTA countries are eliminated by the trade agreement resulting in larger profits for exported goods and services. Though the Peso is weaker than the US dollar, the exchange rate is stable with only minor changes providing additional advantages and further reducing risks to US organizations in engaging in trade with Mexican …show more content…

The side agreements were required to protect investors and workers by promoting cooperation on labor and environment matters and provisions to resolve an organization’s failure to uphold and enforce local labor and environmental laws (Villarreal & Fergusson, 2014). NAFTA therefore raised the risks to foreign investment where it was intended to reduce such risk necessitating further agreements to ensure needed protections were in

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