Presented By:Usama Shahzad & Samreen Shaikh

Road Map
Introduction History of NAFTA Goals of NAFTA Significance of NAFTA NAFTA structure & decision making procedure Benefits ,Emerging Problems and Compression Public opinion & Myths vs. Reality Conclusion

Introduction
Free trade agreement signed by the United States, Canada, and Mexico NAFTA Effect on January 1, 1994 One of the world's largest trading blocs Includes over 426 million people, and a total GDP earnings of $11.4 trillion The three countries conduct nearly $1.7 billion in tri-lateral trade every single day

Geographic Location

History of NAFTA
U.S.-Canada Free Trade Agreement
Signed Jan. 2, 1988 by President Reagan and Prime Minister Mulroney

Discussion for a North American Free Trade Agreement begin between President George Bush, Sr. and President Salinas of Mexico

Cont..
On Aug. 20, 1990 President Salinas expressed his enthusiasm to initiate trade negotiations On Sept. 25, 1990 President Bush replied with his intentions to begin trade with Mexico The letter also included the desire of the Canadian govt. to participate in the agreement as well

Cont
On Aug. 12, 1992 President Bush announced the completion of negotiations for the NAFTA On Oct. 7, 1992 Bush, Salinas, and Mulroney met in San Antonio, Texas to discuss how to implement the NAFTA The two presidents and the prime minister signed the NAFTA on Dec. 17, 1992 That way the NAFTA could take effect on the first of January in 1994

Goals
Development and expansion of world trade and foreign investment. Create an expanded, more secure market for the investment and trade of goods/services. Employment opportunities. Improve the working environment conditions. Help raise the overall standard of living Elimination of all the restricted tariff barriers Protection of intellectual properties Protection for Foreign Investment Trade in services is liberalized and equal treatment

Significance of NAFTA
Economic significance:
Trade in the past five years created almost 150,000 jobs that would not be there otherwise Trade increase dramatically, 227% between 1993 and 2008, according to the World Bank. Trilateral trade currently accounts for $15.3 trillion in goods and services annually. US-Canadian trade, also increased dramatically. Mexicos imports from Canada rose 704%; its exports to Canada rose by 482%. Mexicos imports from the US rose by 236%; its exports to the US rose by 440%. GSP growth, The US and Canadian economies each grew by 53%; the Mexican economy grew by 51%.

Social Significance:
Coexistence in hemispheres ensure that the gap between rich and poor nations does not widen.

NAFTA Structure and Decision-making Procedures

Cantered on two institutions: The Free Trade Commission (FTC) The Secretariat

The Free Trade Commission (FTC)

Principal body of NAFTA Composed of : US Trade Representative The Canadian Minister for International Trade The Mexican Secretary of Commerce and Industrial Development Oversees NAFTAs performance and evolution Responsible for dispute settlement

The Secretariat
Organized on a national basis Located in separate national offices in Mexico City, Ottawa and Washington The secretariat assists the FTC: Dispute panels Committees Administer labour Environmental issues

Side Agreements
The North American Agreement on Labor Cooperation (NAALC)
Occupational safety and health Employment and job training Labor laws and workers rights and productivity

The North American Agreement on Environmental Cooperation (NAAEC)

Requires each country to protect its environment and the environment of one another

NAFTA Advantages
Duty-free imported goods Increased market access

More choices for consumers at competitive prices

NAFTA Benefits

Investment opportunities

Employment Opportunities

Increased prosperity for all three countries.

Canadian Benefits from NAFTA

Overall economic growth rose 30.9% over the 10-year span Expected to keep increasing 3.8% per year Competitive advantage in key industries i.e. fisheries, chemical, energy, steel Replaced Japan in 2002 as the number one agricultural market for U.S. exports Exports have rose104% total to both the U.S. and Mexico.

Mexican Benefits from NAFTA

Economic growth grow 30% over the last decade Keep increasing by 4 - 4.5% per year Production has risen 55% since the start of NAFTA GDP per person has increased from $3,000 in 1994 to $6,100 in 2002 One of the largest recipients of foreign direct investment among emerging markets

Mexico exported $138 billion to the U.S

Proc Fruit & Vegs 6% Wine & Beer 15%

Fresh Vegs 25%

Snack Foods 8% Fresh Fruit 13%

Other 33%

Mexican exports $8.7 billion to Canada

U.S. Benefits from NAFTA

Economic growth of 38% over the last decade. Overall productivity rose 28%. Expected to keep growing 5.1% annually NAFTA Has Accounted For 55% of U.S. Export Growth,26% for Canada and 29% for Mexico

U.S. Trade with Canada and Mexico

($ Millions)

Year Canada 1993 2004 Mexico 1993 2004

U.S. U.S. Trade Exports Imports Balance 5,308.2 9,669.5 3,618.3 8,494.1 4,657.9 650.3

11,454.8 (1,785.3) 2,718.5 7,260.9 899.8 1,233.2

Trade of NAFTA

Emerging Problems
In Canada, cultural domination by the United States Canadian media firms In United States, Deindustrialization In Mexico, cheap subsidized American corn imports
Worker Displacement Loss of Job Industry Loss

Comparisons
YEAR Unemploy ment Rate 2008 2005 2000 Major Exports 2008 CANADA 6.1 6.8 6.8 US 5.8 5.1 4.0 MEXICO 3.5 3.5 2.6

US, UK and Canada, US, Canada China Mexico and and China Germany US, China China, and Mexico Canada and Mexico US, China and Japan

Major Imports

2008

Cont..
Year
Population Growth Rate Life Expectancy Women Men Education Expenditure (% of GDP) 2005-2010 2005-2010 2005-2008 82.9 78.3 4.9 81.4 76.9 5.7 78.7 73.8 4.8 2005-2008

CANADA
1.0

US
1.0

MEXICO
1.0

Public Opinion
United States,Canada & Mexico (Mixed Result) 64 percent of the Mexican public favored NAFTA 47 percent of Americans thought that NAFTA has been good 39 percent thought it had been bad for the country

Cont. Myths vs. Reality

Myth #1 NAFTA has not achieved its core goals in trade and investment Reality Trade among NAFTA countries has more than tripled, reaching US$949.1 billion. FDI from NAFTA partner countries reached US$469.8 billion,2008 NAFTA partners, employment has grown by almost 40 million jobs since 1993 The NAALC, highlights cooperation on labor matters in three key areas: industrial relations, occupational health and safety, and employment standards

#2 NAFTA has resulted in job losses #3 NAFTA hurts workers by eroding labor standards and lowering wages

Cont..
Myth #4 NAFTA undermines national sovereignty and independence Reality A trilateral agreement respects the unique cultural and legal framework of each of the three countries and allows them to maintain their sovereignty and independence. NAAEC, work cooperatively to better understand and improve the protection of their environment.

#5 NAFTA does nothing to help the environment

Conclusion
NAFTA Superhighway that would link the United States, Canada, and Mexico with a super-corridor.

Help promote a common trade agenda with shared values and generate economic growth. Increase in FDI, Market access for goods, Eliminate trade barriers etc
Treaty should be carried forward concerning about taking steps for the problems originated due to NAFTA, otherwise bad conditions in future for three countries.

References
www.naftanow.org www.nationsonline.org http://topics.wisegeek.com www.wisegeek.com http://www.internationaldemocracywatch.org/ind ex.php/north-american-free-trade-agreement Articles