FREE TRADE NAFTA

Free Trade NAFTA

Free Trade NAFTA

Introduction

NAFTA (North American Free Trade Agreement) was an agreement signed between the American, Canadian and Mexican government in order to promote free trade within them. The foundations of NAFTA can be found in US Congress's passing of Trade and Tariff Act. United States at that was the leading propelling force in promotion multilateral trade. United States has supported the economic integration among different economies including Europe. The major driving force was to provide platform for political cooperation among the countries and put a stop to the spread of communism. NAFTA agreement was implemented on 1st January 1994. NAFTA's objective was to promote the free trade by reducing the trade barriers and restrictions regarding economic integration of other economies. NAFT ensured economic interdependence of the economies within the block of North America. Institutions like Commission for Labour Cooperation and Commission for environmental cooperation are NAFTA related institutions. The function of these institutions is to provide the information about the labour markets and environmental condition in North American Countries (Bergsten, 1996).

No sensible argument exists to continue policy that leads to free trade agreements. FTA's are damaging America's ability as a country to compete. If we do not reverse this path of selling our resources and borrowing from foreign sources to finance our lifestyle of imports, we will eventually receive a call on our debt and will find our cheap goods cost much more than we had ever imagined.

Discussion and Analysis

These institutions were formed in order to reduce the uncertainty in the business climate by standardizing the regulations. They also ensured that the regulations are enforced by the authorities in the respected countries. More institutions were developed in the countries where official and staff members are becoming involved in maintaining trilateral institutions in order to build relationship of trust. Their objective was to provide mutual interest and avoid the conflict of interest when it comes to policymaking (Burfisher, 2001).

One of the biggest dampers to poor countries right now is western agricultural subsidies that prevent third world farmers from producing crops for export along with third world import tariffs that force domestic resources to go toward inefficient industries. If free trade is to work, then nations like the European Union and the US need to remove subsidies and import quotas, thus allowing a financial flow into Africa. Just one year would be greater than all foreign aid, private and public, that has ever flowed into the continent. Other issues that have been a sticking point for free trade, is the abuse and advantage that developed or capital rich nations are taking on developing ones, along with corruption and poor political policy making. The African Union summit in 2010 highlighted this point, whereby Chinese firms and companies have shown absolutely no regard for health and wellbeing of workers in their companies in Africa. These developed countries are taking advantage of the poorer ones and such disregard provides strong evidence and cases against allowing free trade in poorer ...