Download - NAFTA and Mercosur
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NAFTA and MercosurWinners and Losers
Arthur SchembriDario Cacopardo
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NAFTANorth American Free Trade Agreement
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Comprehensive agreement dealing with international trade and Investment in North
America
Established since 1994 Members: Canada, Mexico and the US Total Population of 421million Biggest free trade area: $20 trillion in total
GDP Total NAFTA trade: $1.12 trillion
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To eventually eliminate all trade barriers and make trading easier and cheaper
Encourage investment opportunities and job creation
Protect intellectual property rights of people from each participating country
Encourage international fair competition
Cooperation in areas of the Environment and Labour rights
Objectives
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Still very much a controversial deal...
Substantial increases in market access and trilateral trade between NAFTA countries since 1994: 400% increase
Possibly explains the boom in economy
Large Increase in the Maquiladora manufacturing plants on the Mexican border: 85% increase in first five years
Effects
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Who were the winners from this Agreement?
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Corporations and Investors
Consumers looking for cheaper alternatives
Mexico – who saw its standards and economic conditions rise, whilst also being more competitive.
Canada sees high exports and large FDI
Job seekers – employment soared thanks to more exports and growth
Winners
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US manufacturing industry declined
Mexican border towns couldn’t support worker influx
United States Trade Balance: Currently a deficit of$47billion (Feb 2016)
Mexican Farmers: Agriculture goods from US suddenly became cheaper
×Losers
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MercosurSouthern Common Market
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Founded in 1991 with the treaty of Asuncion A Common market of the south. A sub-
regional bloc within South America. One of the world’s leading economic blocs and its fifth-largest economy.
Access to almost 300 million people A combined GDP of nearly $3.5 trillion One of Latin America’s largest regional
integration projects
An economic and political agreement in South America to promote the free movement of goods,
services and people among member states.
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Members
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To promote free-trade and the fluid movement of goods, people and currency ◦ (Unlike NAFTA they promote freedom of
movement of labour)
Has ambitions to become a common market along the lines of the European Union.
Objectives
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In 2002, Mercosur members agreed to form a “free residence area”
A number of free-trade agreements (FTAs) with third parties, including Chile, Colombia, and Peru, as well as Israel and the Palestinian Authority
Negotiations for an FTA with the European Union began in 1995, were suspended in 2004. Although talks resumed in 2010, a deal has yet to be signed
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The Common Market Council
The Common Market Group
The Trade Commission
Two others, ParlaSur and the Structural Convergence Fund, were developed later.
Decision making within Mercosur
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Trade-Group exports: $400,505,145,800◦ APEC: $ 9,090,917,000◦ E.U: $ 5,816,730,000
Trade-Group imports: $359, 475,145,800◦ APEC: $9,035,047,000◦ E.U: $5,577,136,000
Services exports:$60,030,000,000◦ E. U: $2,191,220,000◦ APEC: $1,929,900,000
Services imports: $126,970,000,000◦ APEC: $1,962,240,000◦ E.U: $1,830,080,000
Trade within Mercosur in 2014
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An associate member up to this date
It doesn’t want to jeopardise its trade relations with the United States
However it wants to encourage more trade amongst southern American countries
Chile’s Membership
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Trading Partners
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Who were the winners from this Agreement?
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Members of Mercosur, given that it is a free-trade area.
According to Argentine economist Orlando Ferreres, Brazil is the only country that has benefitted from Mercosur.
Winners
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The bloc's smaller members, Paraguay and Uruguay, complain of restricted access to markets in Argentina and Brazil
A common external tariff of 35%
The ideological fight between the countries holds the negotiations back, which pretty much explains why Mercosur seems to have advanced like two years in 25
Ferreres believes that Mercosur should follow the path of Chile
×Losers
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http://www.theglobeandmail.com/opinion/free-trade-transformed-canadas-economy/article16124601/
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/24/AR2008032401562.html http://dollarsandsense.org/archives/2003/0103dollar.html http://www.investopedia.com/articles/economics/08/north-american-free-trade-agreement.asp http://www.cfr.org/trade/naftas-economic-impact/p15790 https://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement#Jobs http://www.slideshare.net/vijayrocks123/nafta-ppt http://www.investopedia.com/financial-edge/1212/pros-and-cons-of-nafta.aspx https://en.wikipedia.org/wiki/NAFTA%27s_effect_on_United_States_employment http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/nafta-alena/facts.asp
x?lang=eng
https://www.stratfor.com/weekly/nafta-and-future-canada-mexico-and-united-states https://en.wikipedia.org/wiki/Mercosur http://www.as-coa.org/articles/explainer-what-mercosur-0 http://thebrazilbusiness.com/article/mercosul-customs-advantages MERCOSUR - Advantages and Disadvantages from the Brazilian Perspective 1 Luis Felipe Maldaner*(
Hankuk University of Foreign Studies: http://www.ajlas.org/v2006/paper/2010vol23no102.pdf http://
en.mercopress.com/2012/08/07/mercosur-has-only-benefited-brazil-in-the-last-ten-years-with-a-surplus-of-36.8bn
References