Trade or Not to Trade Essay Example | Topics and Well Written Essays - 750 words

Trade or Not to Trade - Essay Example The major impact can be felt in sectors such as agriculture, automobiles, consumer goods, textiles and fashion accessories, and electronic goods. If one country imports agricultural products at certain costs that may be higher than its original costs, it probably gains by exporting electronic goods by producing the same at lower costs and selling at higher prices. It can save resources, money and time in producing agricultural goods and instead devote more towards production of electronic goods. However, proportionate benefits for all NAFTA countries in terms of labor, environment, and resources cannot be guaranteed through this agreement. These issues were regulated through formation of the NAAEC and NAALC. Initially, for the first 10 years GDP grew steadily and exports by NAFTA countries also increased tremendously. Mexico’s imports rose from 6.8% to 11.6% and earned huge profits by increasing their net trade surplus. Mexico’s per capita income decreased and resulted in loss of millions of jobs in agricultural sector. Mexican exports remained stagnant due to slowdown in US. NAFTA helped in elimination of various other pacts and further improved free trade. For example, the two classes of auto manufacturers, those with Auto pact status and those without were merged into one class after NAFTA came into existence. NAFTA brought about significant impact on cross border trade and increase in exports of raw materials and/or OEMs rather than commodities. Both export and import increased and therefore the productivity; during this process, job losses also increased in Canada in the manufacturing sector. However, job losses in one sector were compensated by creation of jobs in other sectors; this means, enhanced innovation and creativity and greater potential for harnessing unexplored areas resulted from the constraints brought by these trade agreements. Uniformity was not followed in terms of regulations followed by