1. Warm Up Why do you think it is good to trade with other countries?
What are some of the difficulties countries might face as they trade with one another?

2. What is the WTO?

3. Objective I am learning about NAFTA.
This means that I will be able to identify patterns of trade between places based on resources.

4. Vocab
Tariff- Taxes on items traded

5. Brief History- Expansion of Trade
In the 1940s, in the post-war period, was a boom for trade and rising globalization. It urged several previously stagnant countries into trading with other countries.
In the past, trading was a way for most countries to gain access to resources not available to them. Though, several resource-rich countries have more complex economic agenda when it comes to trade.
Those countries take advantage by imposing very high tariffs on trade in goods. No one can complain because of the absence of trade standards and a governing authority for trade.

6. Trade Supervision
By 1944 and the years to come, many initiatives to create a governing body for global trade have been done.

7. World Trade Organization
WTO came into force on January 1, 1995, with the 75 existing GATT members and other European communities acting as the founding countries. The organization now has 153 members, representing more than 95% of total world trade.

8. What is NAFTA?

10. NAFTA
NAFTA, the North American Free Trade Agreement, was signed by the United States, Canada, and Mexico.
NAFTA was signed in 1993 and went into effect on January 1, 1994

11. What is NAFTA?
NAFTA was written to create a Free Trade Area in North America
“Free Trade” means that counties may freely trade goods with each other without having to pay a tariff (tax) on those goods,.
In other words, “Free Trade” means no trade barriers

12. Why NAFTA? The purpose of the agreement is to:
Allow free movement of goods and services among the countries
Promote competition in the free trade areas
Protect the property rights of people and businesses in each country
Be able to resolve problems that arise among the countries
Encourage cooperation among countries

13. NAFTA: Trade Growth
Most economists agree that the agreement has been good for the countries involved.

14. NAFTA Pros
Free trade increases sales and profits for Mexico, Canada, and the U.S.A., thus strengthening their economies
Lack of tariffs has allowed Mexico to sell its goods in the USA and Canada at lower prices. This makes Mexico products more competitive in these markets and increases Mexico's profits as it tries to develop its economy.
Free trade is an opportunity for the U.S. to provide financial help to Mexico by making jobs available in factories located there.

15. What is the best title for this cartoon?
“NAFTA Members Prepare for Picnic!”
“NAFTA Members Graciously Share Business Ventures!”
“NAFTA Members Cover Up Conspiracy!”
“”NAFTA Members VIE for Business!”

16. What might be some criticisms of NAFTA?

17. NAFTA Cons
Free trade has caused more U.S. jobs losses than gains, especially for higher wage jobs
Factories, called Maquiladoras, are built on the Mexican border and workers are hired there to make goods at a much lower wage than workers would be paid in the U.S.A

18. Maquiladoras Wages Minimum Wage
Mexico- $3.40 per day vs U.S. $7.25 per hour
Example: Hourly compensation costs for production workers in manufacturing Mexico- $1.21 vs U.S

19. A Closer Look at Maquiladoras
These factories make many types of Products:

20. Country of Origin- Tijuana Maquiladoras Only

21. Companies with Maquiladoras in Mexico
3 Day Blinds
20th Century Plastics
Acer Peripherals
Bali Company, Inc.
Bayer Corp./Medsep
BMW
Canon Business Machines
Casio Manufacturing
Chrysler
Daewoo
Eastman Kodak/Verbatim
Eberhard-Faber
Eli Lilly Corporation
Ericsson
Fisher Price
Ford
Foster Grant Corporation
General Electric Company
JVC GM
Hasbro
Hewlett Packard
Hitachi Home Electronics
Honda
Honeywell, Inc.
Hughes Aircraft
Hyundai Precision America
IBM
Matsushita
Mattel
Maxell Corporation
Mercedes Benz
Mitsubishi Electronics Corp.
Motorola
Nissan
Philips
Pioneer Speakers
Samsonite Corporation
Samsung
Sanyo North America
Sony Electronics
Tiffany
Toshiba VW
Xerox
Zenith

22. Maquiladoras: Good or Bad
United State
They can move their factories to Mexico and ship the goods to the US with no tariffs
They would not have to pay the workers in Mexico as much as much as in the U.S
They would be able to sell their products for cheaper, but still make a good profit.
Many American factory workers lose their jobs because the owners move the factories to Mexico. American factory workers cannot move to Mexico to keep their job.
Goods made in Mexico would cost a lot less because labor is cheaper there.
Mexico
They would not like foreign owned factories because they would create competition and hurt Mexican owned businesses
Maquiladoras would provide jobs for Mexicans, but the profit made by Maquiladoras would go back into the US economy, not into Mexico’s
It would provide a job in a country where there are not enough jobs
However, the wages are very low and the working conditions are not good
Building factories creates pollution. An environmentalist would want to make sure that Mexico had laws to protect the environment.

23. Exit Ticket
In your own opinion, do you think NAFTA is good or bad? Compose a piece that explains what your opinion is and support with details from your notes.