NAFTA is a multilateral free trade agreement between the United States, Canada and Mexico. When it came into effect on 1994; it created world’s largest free trade zone. It was intended to increase the international relations between these countries by eliminating most tariff and non tariff barriers to investment and trade. As any other agreement NAFTA also came under scrutiny because of the bad effects it had on the United States when it came to employment. There were reports of wide recall of various products from the United States which was imported from Mexico and Canada.
One of the main effects NAFTA had was the wage. Due to NAFTA, the workers in the U.S. are pushed to compete with the workers from Mexico where they are paid just $3 per hour. This has resulted in many companies shifting their manufacturing facilities to Mexico to escape from paying $18-20 per hour in America (Kellen, 2015). NAFTA also facilitated to import these products produced in Mexico to the U.S. with no duty fee. There were also reports of nearly 300,000 family farms in the U.S. that ran out of business after the implementation of the NAFTA (Snyder, 2014). Farm incomes in the U.S. were reported to be down by 13 percent. Pre-NAFTA there was a surplus in trade with Mexico but after a decade after signing the agreement this has turned into a deficit of $91 billion (Kellen, 2015). The estimation is that nearly 9000 jobs are lost in the U.S for every $1 billion value goods that are imported to the country. Since 2001 nearly more than 56,000 production facilities have been closed down (Snyder, 2014). Since many jobs have gone overseas there is also high competition in local market and there is a pressure in reducing the wages as well.
NAFTA has not benefited the U.S. especially when it came to the employment. It resulted in driving out jobs out of the country in order to benefit from low wages and low working standards. This agreement will cost the country millions of job and will push the American workers to certify for the Trade adjustment assistance because of loosing their jobs. NAFTA has been proved to be bad to the American Workers.
Snyder, M. (2014, August 14). 20 reasons why NAFTA is destroying the economy. Retrieved from https://www.sott.net/article/283800-20-reasons-why-NAFTA-is-destroying-the-economy
Kellen, P. (2015, November 20). Why NAFTA is Bad for the U.S. Retrieved from http://economyincrisis.org/content/why-nafta-is-bad-for-the-u-s
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