Essay Nafta: International Trade and Free Trade Agreement

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In 1994, Canada joined the United States and Mexico by signing the North American Free Trade Agreement (NAFTA). NAFTA established the largest free trade agreement in the world with the hopes that it would bring increased economic development to all three countries. In theory, NAFTA was expected to reduce barriers to trade, create a larger diversified consumer market, allow the production of new products, and reduce the economic business cost between countries.

All three countries experienced both positive benefits from signing the North American Free Trade Agreement. Mexico had very high expectations. Mexico expected NAFTA to create new jobs, increase the wages of their workers, increase exports, reduce the flow of immigrants fleeing the country, and in general to be an economic boom for their economy. Canada’s expectations were equally high in that they believed that the reduction of trade barriers, the elimination of tariffs, the increase employment, and opportunity to exports products would all benefit their country in the long run. The United States didn’t have lofty goals. In fact, many believed that by signing NAFTA, the U.S. would experience the loss of hundreds of thousands of jobs and reduction in the manufacturing industry. Many in the United States believed that by signing NAFTA, they would promote their neighboring countries which would open the door to exports and trade. The U.S. also believed that in helping Mexico become a profitable country, it would reduce the number of immigrants into the U.S. All three countries soon realized that their expectations may have been a bit lofty since each experienced some negatives consequences as a result of NAFTA. Unfortunately, Mexico’s wages did not increase as high as expected and the economic boom never seemed to be fully realized. Immigrants continued to leave Mexico because

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