NAFTANorth AmericaFree Trade Agreement

Tariff/Duty:

• A tax on imports and exports

Free Trade Zone

• Definition: A zone without tariffs or restrictions• President Bush wanted a free-trade zone from

Canada to South America• President Clinton pushed from a free-trade

agreement between the US, Canada and Mexico• Canada is the United State’s #1 trading partner

while Mexico is #3.

What Does NAFTA Do?• Removes most tariffs between US, Canada and

Mexico.

• Trade barriers were phased out 5, 10 or 15 years after NAFTA went into effect.

• NAFTA went into effect January 1, 1994

• As of 2010- in terms of combined GDP of the three members- NAFTA is the largest trade bloc in the world

NAFTA Debate- AGAINST

1. Movement of American corporations to Mexico in search of lower-paid workers which will lead to higher profits for the corporations. The effect would be many Americans would lose their jobs.

2. Maquiladoras are American owned plants in Mexico that hire lower paid Mexican workers to assemble parts from the US into finished goods.

NAFTA Debate- AGAINST

3. Farmers felt an influx of cheaper Mexican agricultural products would harm their sales.

4. Many felt the environment would be harmed

because of the lax enforcement of pollution controls on industries by the Mexican government.

NAFTA Debate- FOR

1. U.S. jobs would be created, as increased exports to Mexico would demand greater productivity.

2. This would lead to higher wages for American workers.