INTERNATIONAL BUSINESS LAW: INDIVIDUAL ASSIGNMENT

INTRODUCTION

International business law is the practice of law in the global business community. It includes
a focus on the economics and the law, international commercial transactions, licensing, tariffs
and taxes and many more. International business law varies by jurisdiction. T builds on top of
basic business law concepts by expanding them to an international arena. However this
assignment will be focused on demonstrating the desire to meet uniform standards in
international business and how international business law is helping to achieve uniform
standards.

DISCUSSION

There are different events taking place in the globe that demonstrate the desire to meet
uniform standards n doing business. An example of such is NAFTA, which the North
American Free Trade Agreement. The NAFTA is a treaty between Canada, Mexico and the
United States that has been in effect since January 1st 1994. The agreement was designed to
increase trade among the three nations by reducing or eliminating restrictions on commerce
such as tariffs and import quotas. It is one of the most powerful and wide reaching treaties in
the world, governing the entire spectrum of trade and commerce on the North American
continent. Although it was designed to benefit its member nations economically, it has been
the subject of controversy since its inception. The goal of NAFTA was to integrate Mexico
with highly developed economies of the United States and Canada. Also the main purpose of
this agreement is to reduce trading cost, increase business investment and help North
America be more competitive in the global marketplace according to [ CITATION Kim19 \l
2057 ].

There are disadvantages that come with this trade agreement, therefore NAFTA is criticized
for destroying half a million American jobs and lowering US trade deficit. According to
[ CITATION Kim19 \l 2057 ] it cost jobs when manufacturing moved to Mexico to take advantage
of lower labour cost. The four stated that suffered the most were California, New York,
Michigan and Texas. Before NAFTA, these states had a high concentration of factories for
motor vehicles, textiles, computers etc. Those were the industry’s most likely to move to
Mexico. Lower wages in Mexico reduced US wages and benefits. Working in the remaining
US factories cold not bargain for higher wages and companies could now threaten to move to
Mexico if labour unions negotiated too hard.

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[ CITATION Kim19 \l 2057 ] Further explained that some accused NAFTA of exploiting
Mexico’s workers, destroying its farms and polluting it environment. Rural Mexican farmers
could not compete with low-cost American subsidized corn and other grains. The Mexican
farmers were forced to use more fertilizers and farm marginal land to survive and that created
more pollution and deforestation.

Due to the cons that came with the NAFTA, the three countries renegotiated NAFTA on
September 30th 2018. The new deal is called the United States-Mexico- Canada Agreement, it
must be ratified by each country’s legislature before going into effect. The Trump
administration wanted to lower the trade deficit between the US and Mexico. The new deal
changes NAFTA in six areas but the most important is that auto companies must manufacture
at least 75% of its car components in the USMCA’s trade zone.

Although NAFTA has a lot for criticism, this agreement has created the world’s largest free
trade area of 450 million people. It’s an economic powerhouse of $24.9 trillion in gross
domestic product. It links the economies of the United States, Canada and Mexico. In 2018
the US GDP was $20.5 trillion, Canada was $1.8 trillion and Mexico’s was $2.6 trillion.
NAFTA’s trade area has a higher GDP than the $22 trillion produced by the 28 countries in
the European Union as stated by [ CITATION Kim19 \l 2057 ].

The NAFTA helped increase trade between the 3 countries as such between 1993 and 2018
the trade between the three countries quadrupled from $297 billion to $1.23 trillion. That
boosted economic growth, profits and jobs for all three countries and it also lowered prices
for consumers as stated by [ CITATION Kim19 \l 2057 ]. NAFTA boosted trade by eliminating all
tariffs between the three countries. It also created agreements on international rights for
business investors and that reduced the cost of commerce also it spurs investment and growth
especially for small businesses.

According to[ CITATION Chr19 \l 2057 ] NAFTA has created a vibrant employment marketplace
that allows each country to use the strength of the agreement to bolster the existing talent and
set the stage for future job growth. As Mexico’s economy grows due to an increase in
manufacturing and assembly positions, the county requires skilled labours, high-tech
equipment and training that the US and Canada can supply. This sharing of knowledge
increase employment opportunities across the continent.

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 CONCLUSION

In conclusion NAFTA is one of the best treaties in the world as it has greatly benefited all it
three members being the US, Mexico and Canada. The goal of this treaty was to improve
trade amongst the countries which will benefit all the countries economies and shown in the
discussion, this agreement has helped increase the GDP of each country. However another
goal this agreement was the integration Mexico with highly developed economies of the US
and Canada as to help it grow its economy. However it is important to have uniform
standards that help regulate global business transactions so as to help level the playing field
for all business participants hence all participant an benefit.

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 REFERENCES PAGE

Amadeo, Kimberly. “the balance.” 25 June 2019. http:/www.thebalance.com/facts-about-nafta-

statistics-and-accomplishments-3306280. phone. 30 August 2019.

MacKechine, Chris. “Chron.” n.d. http://smallbuisness.chron.com/north-american-trade-agreement-

benefits-3836.html#. phone. 31 August 2019.

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