Hawaii Pacific University

NAFTA - Retrospect and Prospect

by

Marion Weiler

TABLE OF CONTENTS

I. INTRODUCTION 3

Purpose and Importance of the study 3
Statement of the problem 3
Limitations 3

II. THEORETICAL OR PRACTICAL FOUNDATION 4

Introduction 4
Theoretical or practical basis 4

III. RESOLUTION PROCESS 6

Introduction 6
Data 7
Location of the data 7

IV. ANALYSIS 7

Introduction 7
Retrospect 8
Prospect 9

V. CONCLUSION AND RECOMMENDATION 10

VI. REFERENCES 12

I. INTRODUCTION

Purpose and Importance of the study

World exports grew more during the past decade than world production, indicating increased international interdependence. The growth in trade was made possible by improvements in transportation and communication networks, but also by the steady reduction of trade barriers. International trade can be fruitful in different ways. The most obvious reason for international trade is availability of resources. Nations have an acquired advantage of being able to produce certain products at lower costs because of certain skills, education, technologies, and infrastructure. Therefore, trading countries can gain from international trade.

Statement of the problem

International trade creates both, winners and losers. Some industries gain access to lucrative markets, but others fail to survive increased competition in their home markets. Consumers and producers may be able to buy goods and raw material more cheaply, but in contrast, producers often feel the effects of trade barriers and agreements more acutely. Following study will analyze the fruitfulness of the trade agreement NAFTA.

Limitations

This Case Study only describes basics about the trade agreement NAFTA. The limited size of the paper doesn′t allow describing neither all the details of the agreement nor all the impacts of it for the three member countries.

II. Theoretical or Practical Foundation

Introduction 

On January 1, 1994, the North American Free Trade Agreement (NAFTA) came into effect among Canada, Mexico, and the United States. The agreement provides a detailed framework for the conduct of trade among the three countries. But its objectives are much more expansive than trade alone: The agreement is designed to remove barriers to investment among the three countries, permit the free flow of services, and enable expeditious settlement of trade disputes. NAFTA is an economic agreement that should influence where and how goods are produced and how services are provided in North America. NAFTA should have a positive effect on income and employment in each of the three member countries and these effects should be greatest in Mexico, the least developed of the three.

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