MADE BY :-

VAIBHAV KUMAR 29
NIKHIL LAMBA 30
KARAN MAGO 31
ASHISH MANGAL 32
NIKHIL LAMBA
30
Introduction

 The North American Free Trade Agreement (NAFTA ) is a

trilateral trade bloc in North America created by the governments of
the United States, Canada, and Mexico.
 The agreements were signed in December 1993 by the leaders of the
three countries — Brian Mulroney of Canada, Carlos Salinas de Gortari
of Mexico, and Bill Clinton of the United States but did not come into
effect until January 1, 1994.
Data

 Secretariats - Mexico City, Ottawa and

Washington D.C.

 Official languages - English, French and Spanish

 Membership - Canada, Mexico, United States

 Establishment – Formation January 1, 1994

 Area – Total 21,783,850 km² (1st)

 Population - 2008 estimate 445,335,091 (3rd)

 GDP 2007 estimate – Total $15,857 billion (1st)

 In terms of combined purchasing power parity GDP of its
members, the trade bloc is the largest in the world and second
largest by nominal GDP comparison.

 The implementation of NAFTA on January 1, 1994, brought

the immediate elimination of tariffs on more than one half of
U.S. imports from Mexico and more than one third of U.S.
exports to Mexico.
ASHISH MANGAL
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Rules of origin and
regional content

 Origin – goods and services must originate in North America to get

access to lower tariffs.

 Regional content – the percentage of value that must be from North

America for the product to be considered North American in terms of
country origin.
GOALS OF NAFTA

 To eliminate barriers of trade and investment between the US,

Canada and Mexico.

 Liberalization of restrictions on services and foreign investment.

 Enforcement of intellectual property rights, and a dispute

settlement process.
VAIBHAV KUMAR
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Effects of nafta

On agriculture-

 Non tariff obstacles pertaining to trade in agriculture between Mexico

and United States of America were dissolved

 Mexico's agricultural exports increased 9.4 per cent annually between

1994 and 2001, while imports increased by only 6.9 per cent a year
during the same period.
On investment-
 Implementation of NAFTA, influenced investments in a
positive manner.

 Since the year 1994, stock of FDI or foreign direct investment

in Canada has been approximately, USD 279 billion(yearly).

 In the year 2005, the overall foreign direct investment in

Canada was USD415 billion.
On Trade-

 Overall, NAFTA has not caused trade diversion, aside from a

few industries such as textiles and apparel, in which rules of
origin negotiated in the agreement were specifically designed
to make U.S. firms prefer Mexican manufacturers.
 NAFTA emerged a strong platform for Mexico to boost exports
and supplement its economy, which was wobbling on a large
trade deficit.

 NAFTA helped in Mexico's export recovery through duty-free

trade with the US.

 Over the past decade, Mexico's export to the US has risen

four-fold.

 And to the surprise of many, Mexico turned its trade balance

with the US in its favour in the post-NAFTA period.
KARAN MAGO
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The Impact of NAFTA on Subsistence Producers

 North American firms are now more efficient and productive. They have
restructured to take advantage of economies of scale in production.

 Access to credit reduce

 Job loss in the U.S.A

 Increased environmental degradation

 Sell the harvest in buyer market

 Regional business investment in the United States rose 117 percent between
1993 and 2007, as compared to a 45 percent rise in the fourteen years prior.
 Benefits and Limitations
Benefits:
Benefit’s the importers by reduced or duty free goods.
•No MPF(Merchandize Processing Fee) from Canada
for NAFTA goods
•Can make the exporter more competitive then other
non-participating countries

•200% increase in trade among the 3 countries.

•Increase market access within each country.

Limitations:
It has negative impacts on farmers in Mexico who saw food
prices fall based on cheap imports from U.S. agribusiness

It has negative impacts on U.S. workers in manufacturing

and assembly industries who lost jobs.

Critics also argue that NAFTA has contributed to the rising

levels of inequality in both the U.S. and Mexico.

Some economists believe that NAFTA has not been enough

(or worked fast enough) to produce an economic
convergence, nor to substantially reduce poverty rates
Recent news

 NAFTA trade numbers 19.3% higher for September over 2010

 Surface transportation consists largely of freight movements

by truck, rail and pipeline. In September, 86.9 percent of U.S.
trade by value with Canada and Mexico moved on land.
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