NAFTA and Trans-Pacific Partnership: Impact on Member Countries

Running head: GLOBAL PERSPECTIVE
GLOBAL PERSPECTIVE
Student's Name
University Name
Author note

1
GLOBAL PERSPECTIVE
Introduction
The concept of NAFTA (North American Free Trade Agreement) revolves around the
purpose of encouraging the economy activity and trade among the North America’s three major
economic powers. The purpose of North American Free Trade Agreement is to eliminate most of
tariffs on trade among the countries like Mexico, Canada, and the United States. This came into
effect on the year 1994 on 1st January (Villareal & Fergusson, 2017). Various tariffs on textiles,
automobiles and agriculture were phased out during this period. The Trans-Pacific Partnership
(TPP) was a strategic pivot to Asia by the United States president barrack Obama. The Trades-
Pacific partnership was the world’s biggest free trade agreement with converged almost 40
percent of the global economy, before united states president Donald J. Trump withdrew in the
year 2017 (Villareal & Fergusson, 2017). The supporters of Trans-Pacific Partnership were of
the view that the an agreement would have expanded the trade of United states as well as its
investment approach, it would have spurred the economic growth and decreased consumer prices
while providing more jobs. It also would have advanced the US strategic interests in the Asia-
Pacific region. However, the detractors including US president Donald Trump were of the
opinion that such a deal would be more likely to accelerate the declivity if the US manufacturing
industry, decreased wage rate and there would be increase in the level of inequality (Hakobyan &
McLaren, 2016). The purpose of this essay is to understand the concept of NAFTA (North
American Free Trade Agreement) and the purpose of the international trade agreement and the
ways it impacted the member countries. The essay also provides the viewpoint of various
analysts about the NAFTA and other trade agreement.

2
GLOBAL PERSPECTIVE
Discussion
According to McKinney, (2016), it was campaigned on a promise to repeal NAFTA by
the president of the United States Donald Trump along with the other international trade
agreement which he considered to be unfair to the country. the NAFTA (North American Free
Trade Agreement) was replaced with the Mexico Trade Agreement which was a new trade deal
with the Mexico and it would maintain a tariff free access to the agricultural commodities on
either side of the border and it would eliminate all forms of non tariff barriers while encouraging
more agricultural trade between the United states and Mexico in the year 2018, August 27th
(Hakobyan & McLaren, 2016). In the year 2019, September 30th, the United States signed an
agreement with Canada in order to replace NAFTA (North American Free Trade Agreement)
which was termed USMCA- the United states-Mexico-Canada agreement. It was done in the
presence of the Canada trade offices and the representatives. It was a high standard trade
agreement which gives the workers, farmers, business and ranchers’ freer markers and a more
fair trade among the countries (McKinney, 2016). This will ensure a robust economic growth in
the United States. This will enable surer opportunities for half of the population and create better
paying jobs.
It was mentioned by Lahrech & Sylwester, (2013), Canada and Mexico is the second and
the third largest suppliers of imported goods. Around one-fourth of all the US imports including
machinery, gold, processed foods, fresh produce, livestock, and crude oil are originated from
Mexico and Canada. Additionally, there are around one-third of the exports of United States such
as parts of vehicles; minerals, oil, plastics, fuels and machinery are destined for Mexico and
Canada. The legislation was developed by President George H.W. Bush in the belief that it
would create many new jobs within the two years and 1 million within the next five years

3
GLOBAL PERSPECTIVE
(Lahrech & Sylwester, 2013). It was also believed that the exports play a major role in the
economic growth of United States. It was anticipated by the administrators that there would an
increase in the imports from the Mexico to United States under the lower tariffs.
There have been several debates which surrounds the impact of NAFTA (North
American Free Trade Agreement) on its signatory countries. In the mean while, countries such as
Canada, Mexico, and United States have seen economic growth, increased trade and higher wage
since the implementation of NAFTA (North American Free Trade Agreement). Various experts
disagree on the statement that this agreement has contributed to the gains of these countries
especially on the manufacturing jobs, price of consumer goods and immigration of United States.
However, as per the opinion of Barton, (2017), there are other significant developments that have
occurred on the continent in the past century.
In the beginning of the implementation of the NAFTA (North American Free Trade
Agreement), the critics were worried that the agreement would result in relocation of US jobs to
Mexico, inspite of the supplementary NAALC (Barton, 2017). There were negative impacts of
NAFTA on the US jobs. It negatively impacted on many US workers and labors in the way.
There were instances of companies shifting their manufacturing from unites states to other
countries like Mexico as there were low labor costs. However, it was believed that NAFTA was
not a direct reason for these moves (Alvarez-Medina & Carrillo, 2014). This was the concern of
the experts. The TPP (Tran’s pacific partnership) was an agreement between the small group of
Pacific Rim countries consisting of New Zealand, Singapore, Brunei and Chile. The TPP (Trans-
Pacific Partnership) framed it as a centerpiece of the strategic pivot of the United States to the
Asia-Pacific region. Several separate meetings and rounds of negotiation had taken place among