Regional Analysis: North American Free Trade Agreement

1492 Words3 Pages

Regional Analysis: North American Free Trade Agreement

In today's globalized economies, virtually every country in the world belongs to some form of regional integrated trade organization whether by direct membership, bilateral or multilateral agreement. Regional integration is a process by which sovereign states in a particular region enter into an agreement to promote economic growth through the reduction of barriers to trade restrictions and safeguard common interests such as the environment. The removal of trade barriers results in a free trade zone thus creating a single market. Sovereign nations have many differences, some may be more economically sound and others may have a greater labor force or better technology. In the end, all regional nations must find a method to work together for the common good of all parties. The development of the North American Free Trade Agreement (NAFTA) was to solidify the nations occupying the North American continent, Canada, the United States (U.S.) and Mexico. Many proponents question the success of NAFTA for these nations. This essay will examine the advantages and disadvantages of regional integration and the regional economic development of these nations as members of NAFTA.

NAFTA is trade agreement implemented January 1, 1994 between the U.S., Canada and Mexico which removes restrictions on trade between the three countries to encourage free competition, improve investment opportunities and increase market access "for small and medium-sized enterprises (SMEs)" (Tomasetti, H., 2004). Some of the advantages NAFTA has afforded its members are the eradication of tariffs, product price reductions and increased profit margins. NAFTA has eliminated tariffs on all goods traded betw...

... middle of paper ...

...oor results of NAFTA in Mexico leaves one asking who truly benefits from NAFTA and are the countries in the Northern Hemisphere prepared for regional integration under a multilateral or unilateral agreement.

References

Hill, C.W.L (2005). International Business: Competing in the Global Marketplace (5th ed.). McGraw-Hill/Irwin. New York, NY

Moreno-Brid, J. C. (2007). Economic development and industrial performance in mexico post-nafta. Retrieved January 25, 2008 from http://www.eclac.cl/celade/noticias/paginas/3/28353/JCMoreno.pdf

Senate Committee of Foreign Relations (2004). NAFTA: Ten years after. Retrieved January 24, 2008 from http://www.america.gov/st/washfile-english/2004/April/20040420162429AEneerG0.7202722.html

Tomasetti, H. (2004). The benefits of nafta for smes. Retrieved January 23, 2008 from http://www.ita.doc.gov/td/tic/fta/nafta/roo.htm

More about Regional Analysis: North American Free Trade Agreement

Open Document