What Was An Argument In Favor Of Nafta The North American Free Trade Agreement

NAFTA skeptics cite the loss of jobs in U.S. industry as a reason to criticize NAFTA and be wary of future trade agreements. According to the CFR, the U.S. auto industry lost some 350,000 jobs between 1994 and 2016. Many of these jobs were taken over by workers in Mexico, where the automotive sector added more than 400,000 jobs during the same period. But while Mexico was “beating us economically” in the trade sense, imports were not the only ones responsible for the real growth in merchandise trade from 1993 to 2016, of 264%. Real exports to Mexico more than tripled during this period and increased by 213%; Imports, however, exceeded 317%. Given the breadth and frequency of U.S. trade with NAFTA partners, changes to customs procedures on both sides of the border could have a significant impact on businesses active in bilateral trade103. , special customs regimes for express shipments or publicly available customs legislation.

On the other hand, critics of the agreement claim that it is responsible for job losses and wage moderation in the United States, driven by low-wage competition, from companies that have relocated their production to Mexico to reduce costs and a growing trade deficit. Dean Baker of the Centre for Economic and Political Research (CEPR) and Robert Scott of the Economic Policy Institute argue that the post-NAFTA increase in imports has resulted in a loss of up to six hundred thousand U.S. jobs over two decades, although they acknowledge that some of this import growth would likely have occurred without NAFTA. In addition to the two trilateral agreements, the United States and Mexico have concluded a complementary bilateral agreement with NAFTA on cooperation on environmental exclusion.37 In that agreement, the two governments committed to cooperate in the development of environmental infrastructure projects along the U.S.-Mexico border to address environmental degradation issues due to growing economic activity.

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