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Bush Sept. 5, 2001Why Enter a Free Trade Agreement?: Why Enter a Free Trade Agreement?Levels of Economic Integration: Levels of Economic Integration *If the policies are not just harmonized by separate governments, but have a unified government with binding commitments on all members, then you reach political integration and have “full economic integration”.What is NAFTA?: What is NAFTA? Effective as of January 1, 1994 A trade agreement between CANADA, MEXICO, and the UNITED STATES which provides for the elimination of tariffs on North American goods shipped among the three countries. Background of NAFTA: Background of NAFTA An Introduction Zedillo Clinton Salinas Marcos Slide8: UNITED STATES: Would solidify an expanding trade relationship, which would spur job creation at home and help to continue the revolutionary shift throughout Latin America away from state controlled markets toward freer markets. MEXICO: Lower inflation and foreign debt; create more well-paying jobs for Mexicans, thus producing less incentive for Mexicans to work illegally in the U.S.; Mexico would become a richer market for American exporters. Would exert presidential authority, improve inter-American relations and advance the cause of global trade liberalization. Expectations and GoalsReaction After Implementation: Reaction After Implementation How the Countries Were Affected Immediately How They Are Affected NowTop U.S.: Top U.S. 1. Aircraft 2. Electronic Computing Equipment 3. Motor Vehicle Parts 4. Motor Vehicles 5. Semiconductors 6. Aircraft/Space/Missile Parts 7. Chemicals 8. Plastics 9. Airplane Engines/Parts 10. Refined Petroleum Products 1. Motor Vehicles 2. Oil/Natural Gas 3. Motor Vehicle Parts 4. Semiconductors 5. Electronic Parts andNAFTA Pros: NAFTA Pros Goods/Services at lower cost Most underdeveloped countries gain the most (i.e. standards of trade increased) Tariffs reduced Jobs created Mexico’s economy is growing againNAFTA Cons: NAFTA Cons Fuel for peso crisis Benefits Mexico more than the U.S. U.S. deficit with trading partners Loss of low-wage American jobs to Mexico Environmental problems Traffic congestion and delays along the bordersThe Mexican Peso Crisis: The Mexican Peso Crisis Was NAFTA to Blame? Wages in United States and MexicoWhat about America’s Farmers?: What about America’s Farmers? BENEFITS: More export opportunities. Since NAFTA was approved in 1993, U.S. agricultural exports to Mexico have nearly doubled. DISADVANTAGES: Face regulations that increase the costs of production while foreign competitors gain from cheap production and labor.Impact on:Employment: Impact on: Employment Was U.S. workers’ loss Mexican workers’ gain? Maquiladora - Primarily foreign-owned assembly plants Jobs lost to Mexico vs. Jobs supported by exports to Mexico and Canada Impact on:Immigration: Impact on: Immigration In the 1990s, U.S. population grew 13.2%, with 60% growth of Mexican immigrants. Among Latinos nationwide, 26% are between the ages of 25-40. Remittances from Mexicans working in the U.S.: $6.65 billion (for 2001 through 3rd quarter) Increase in Mexican migrants led to increase in Border Patrol staffImpact on:Environment: Impact on: Environment NAFTA Environmental Agreements: North American Agreement on Environmental Cooperation (NAAEC) - commission to enforce environmental law. Border Environment Cooperation Commission and the North American Development Bank - commission to address pollution problems along the U.S.-Mexican border Trucking Industry: Trucking Industry The areas of concern include: vehicle safety, driver training, environmental issues and possible illegal drug trafficking. A recent investigation determined that the average 18-wheeler in Mexico is 40% overloaded, carrying a gross vehicle weight of more than 120,000 pounds. If U.S. truckers operated at a similar overcapacity, interstate highways would have a life span of 14 years, as opposed to their 40-year design life.Missouri’s Role: Missouri’s Role Slide20: Canada and Mexico are Missouri’s first- and second-largest export markets, respectively, accounting for 50.5% of Missouri’s total exports 1999. Between 1994 and 1999, Missouri exports to NAFTA partners increased 63.4%. Missouri’s Role (continued)Slide21: Mid-Continent International Trade Corridor 1. A trade pattern 2. A system of connecting highways and rail routes 3. An opportunity to strengthen economic development in a region Missouri and Employment: Missouri and EmploymentThe Missouri-Mexico Partnership: The Missouri-Mexico Partnership The Missouri Department of Economic Development moved its hub to Monterrey Branch office in Guadalajara For the past 12 years, the Missouri Department of Agriculture’s headquarters has been in GuadalajaraNAFTA’s Future: NAFTA’s Future Where is it going and what effects will it have? U.S.-Central American Free Trade Agreement Free Trade Area of the Americas (FTAA) Conclusion: Conclusion 2220 Holmes, Third FloorKansas City, MO 64108(816) 235-5840(816) 235-1762 FAXwww.alianzas.us: 2220 Holmes, Third Floor Kansas City, MO 64108 (816) 235-5840 (816) 235-1762 FAX www.alianzas.us You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.