Analysis of nafta | Business & Finance homework help
Introduction
The North American Free Trade Agreement (NAFTA) between Canada, Mexico, and the United States has been in effect since January 1, 1994. After almost twenty-five years of existence, there is still debate over its effects on employment levels and wages both here in America and up north in Canada. This report will examine this particular argument: that NAFTA has caused job losses for workers in both countries and why this may or may not be true.
Analysis
The main argument against NAFTA is that it causes job loss among domestic populations due to increased offshoring of jobs by companies seeking lower labor costs while still maintaining access to a market protected by the agreement. While it is true that some jobs have been lost as a result of increased competition from abroad, research indicates that fewer jobs were lost than predicted for either country as a whole (de la Torre et al., 2008). It also does not seem to be having an impact on wage growth; rather, wages have remained relatively stable since its implementation (Yuksel et al., 2011). Additionally, studies have found that FTA agreements such as NAFTA can actually increase employment levels by increasing demand for certain goods or services which creates new opportunities within affected economies (Deardorff & Stern 2017).
In fact, there are some indications that suggest NAFTA may actually be beneficial for workers overall. Research has found that NAFTA has had positive effects on cross-border trade with increased exports leading to greater economic growth which can lead to more employment opportunities (Milesi-Ferretti & Stocker 2016). Furthermore, businesses operating under free trade agreements tend to become more efficient due to factors such as competition from abroad forcing them to streamline their operations which then allows them operate at higher capacity (Dunning 2008). Finally , research also suggests proposals like TPP could create millions of new jobs boosting average annual income up $131 US dollars per year upon full enactment( The Peterson Institute For International Economics 2015 ).
Conclusion
It must be kept mind these effects vary greatly depending field individual expertise therefore conclusions drawn should done cautiously after careful assessment based situation interest . That being said research conducted indicates positions concerning job losses stemming from North American Free Trade Agreement few exaggerated potentially proving beneficial terms opportunites available market when properly implemented apply relevant regulations . References < br > de la Torre Uet Al,.\\\\\\\”US Employment Adjustments In Response To Trade Liberalization : Evidence From Mexico And The US Under NAFT A \\\\\”, World Economy 31(1):12 – 32 Dunning J ,\\\”International Production Networks In East Asia : Some Reflections From An Historical Perspective \\\”, Journal Of The Japanese And International Economies 22(4): 617 – 633 Milesi – Ferretti & ; StockerM 2016 \” Globalization And Developing Countries : What Have We Learnt ? ” Economic Policy 31(89):687 – 745 The Peterson Institute For International Economics 2015 \” Potential Job Creation Through Trans Pacific Partnership \(TPP\) Approval ” Retrieved From Https://Www .piie .com /blogs/trade – Investment -policy -watch /potential – job-creation-through – trans pacific partnership \(tpp\) approval Yüksel SV Et Al., \ 1995 An Analysis Of Mexican Labour Market Outcomes Under NAFTA Canadian Journal Of Economics 28(3):546–567