North American Free Trade Agreement NAFTA North American Free Trade Agreement Implemented – January 1, 1994 Purpose – remove trade barriers and encourage investment between the United States, Canada, and Mexico

Tariffs Tariff – A tax countries put on imported goods to make sure their goods can compete Canadian and United States agricultural import tariffs are zero, except for Canadian poultry and United States sugar As of January 1, 2003, Mexican import tariffs are zero except for corn, dry beans, non-fat dried milk, orange juice and sugar, all of which are subject to tariff-rate quotas

NAFTA Advantages Agricultural trade between the United States and Mexico increased 149% since 1993, reaching $15.8 billion in 2004 Agricultural trade between the United States and Canada increased 112% since 1993 In 1993, United States goods faced an average tariff at the Mexican border of 10% Five times the 2.07% rate the United States imposed on Mexican goods.  With NAFTA, Mexico’s average tariff has fallen to about 2%

NAFTA Advantages United States imports and exports have grown. Without NAFTA, the Unites States may have lost expanded export opportunities United States agricultural exports to Mexico have more than doubled

NAFTA Disadvantages NAFTA allowed United States manufacturers to move jobs to lower-cost Mexico where labor is less expensive. Manufacturers that remained had to decrease wages to compete. Mexico's farmers were put out of business by United States subsidized farm products. NAFTA provisions for Mexican labor and environmental protection were not strong enough, allowing for exploitation. Employers in industries that could move to Mexico used that as a threat during union organizing drives, thus suppressing wage growth.

NAFTA Disadvantages Maquiladora Program United States companies employ Mexican workers near the border to cheaply assemble products for "export" to the United States. Workers are exploited. Mexico’s agricultural businesses have increased its use of fertilizers and other chemicals, costing $36 billion per year in pollution.