Question

Using your economic knowledge and the information in the article, compose a 350- to 450-word memo to your state’s commerce department evaluating the effects of NAFTA on the economies of the United States, Mexico, and Canada. Keep in mind that evaluation means to weigh both positives and negatives and then decide which side is stronger. Be sure to use topic sentences, conclusions, introductions, and transitions as well as proper grammar. Your memo should include citations from the article.

Answer 1

The benefits of trade agreements are not felt evenly by all industries in an economy. however, trade is important, it is also very important to make sure that we are trading everything that we have at a fair price.  It is important to decrease the amount of trade barriers and restrictions when trading with another Country. The NAFTA or the North American Free Trade Agreement was created to eliminate the number of tariffs and restrictions such as agriculture, textiles, and automobiles between three different countries, the United States, Canada, and Mexico. The NAFTA also provided property protection, established dispute resolution mechanisms, and made side agreements that implement labor and environmental safeguards. According to the article, "NAFTA and the USMCA: Weighing the Impact of North American Trade," "The North American Free Trade Agreement (NAFTA) was a three-country accord negotiated by the governments of Canada, Mexico, and the United States that entered into force in January 1994. NAFTA eliminated most tariffs on products traded between the three countries, with a major focus on liberalizing trade in agriculture, textiles, and automobile manufacturing. The deal also sought to protect intellectual property, establish dispute resolution mechanisms, and, through side agreements, implement labor and environmental safeguards." The amount of auto manufacturers, electronics, machinery, and appliances have increased in price between the three countries the United States, Canada, and Mexico since the NAFTA agreement. The NAFTA has increased the amount of production lines across all three of the countries with a decrease in the amount of production costs. According to the article "NAFTA and the USMCA: Weighing the impact of North American Trade," "For the United States and Canada, Mexico was seen both as a promising market for exports and as a lower-cost investment location that could enhance the competitiveness of U.S. and Canadian companies."

Answer 2

The North American Free Trade Agreement (NAFTA) was vital in enhancing free trade and the improvement in production among the United States, Canada and Mexico.

• The North American Free Trade Agreement (NAFTA) was put in place in 1994 in order to encourage free trade among the United States, Canada and Mexico. The North American Free Trade Agreement (NAFTA) was vital in the elimination of tariffs among the countries.

Some of the positive effects of NAFTA include:

• It led to an increase in trade.
• Better consumer prices.
• Increase in economic output.
• Increase in foreign investment
• Increase in the gross domestic product of the countries involved.

The negative effects of NAFTA include:

• Reduction in wages of the workers in the United States.
• Increase in competition affected small businesses.
• The government of the United States subsidized farm products into Mexico which led to the collapse of several local farms.

In conclusion, despite the negative effects of the North American Free Trade Agreement (NAFTA), the positive effects outweigh the negative effects.

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