The Impacts of NAFTA in the Us, Mexico and Canada, Essay Example

As NAFTA celebrates its 20^th anniversary, the trade agreement can boast of a number of economic achievements that it has made over its existence and operations. Since the beginning of NAFTA’s implementations, trade relations between Mexico, Canada and the United states have significantly broadened. This increased trade relations brought about by NAFTA has translated to great economic growths i.e. over 80 percent for both Mexico and Canada and over a third of the U.S trade.

The amalgamation of trade between these three countries has also resulted to many job opportunities. The US for instance has experienced over 24 percent increase in employment rates. Consequently, the US inflation rates has been adjusted since the inception of NAFTA trade agreement. Mexico has also witnessed a great economic growth since the NAFTA trade agreement was put in place. Mexico’s GDP is also seen to increase at a rate of approximately 2.7 percent, most experts however say that this rate is an under performance and it is below expectations. In addition, the inception of this trade agreement has led to increased employment rates in Mexico and ready market for its goods in the US and Canada. Similarly, Canadians and Mexicans found easy trade market in the US and made a purchase of $428 billion. Canada is believed to have gained the largest in this economic trade agreement with an annual growth of 3.6 percent. Employee rate levels have also been seen to grow significantly with the overall rate of employment rising to over 16 million.

In regards to investment, trade, labor markets, and the business environment, these three countries have experienced overall improvement and their economies grown significantly. The trade’s relation between these countries created by NAFTA has encouraged investors across the countries to invest more. Investment is also encouraged by the existence of ready market for the goods and services. The labor market has also benefited a great deal from this trade agreement. There is an increased employment rate in the three countries a sign of growth in the market. The readily available labor market also fosters production of more goods to be traded across the borders of these NAFTA countries. Of the three countries, Canada is believed to have benefited the most with annual growth rate of 3.6 percent and then followed by the U.S having an annual growth rate of 3.3 percent, and finally Mexico that had 2.7 percent.

Despite the numerous advantages and benefits that came with NAFTA, many critics express their dissatisfaction on the trade agreement and cite a number of problems that came about because of its emergence. One of the problems brought about by NAFTA is that it created an opportunity for US manufacturers to relocate to Mexico where things are of low cost. The remaining manufacturers were then forced to lower their wages to suite well in the competition. In addition, many of Mexican farmers were disadvantaged after the US introduced subsidized farm products. This made the farmers loose market for their products. On the same line, many jobs were lost in the US since most firms were relocating to Mexico where they could find cheap production costs.

The segments of these economies that probably faced were the labor industry. Despite the increase in employment opportunities, the cost of labor reduced significantly due to the low cost of production and the easy availability of labor across the three economies. With the trade agreement bringing benefits, certain challenges are deemed to come. For instance, the Mexican economy may depreciate highly due to lack of market for the farmers’ products. In addition, the low cost of labor may hurt many workers due to inflations in the current economy.