Essay Regional Analysis North American Free Trade Agreement

Regional Analysis: North American Free Trade Agreement In todays globalized economies, virtually every country in the world belongs to some form of regional integrated trade organization whether by direct membership, bilateral or multilateral agreement. Regional integration is a process by which sovereign states in a particular region enter into an agreement to promote economic growth through the reduction of barriers to trade restrictions and safeguard common interests such as the environment. The removal of trade barriers results in a free trade zone thus creating a single market. Sovereign nations have many differences, some may be more economically sound and others may have a greater labor force or better technology. In the end,†¦show more content†¦For example, a wool area carpet from Mexico sells at $60 and a wool carpet from Thailand sells at $50, both countries must pay a tariff of $15. Removing the tariff rate on Mexican goods will encourage consumers to purchase the Mexican goods versus the Thailand goods. Another advantage of regional integration is the increase in sales. According to reports from the U.S. Department of Commerce, trade between the NAFTA countries has increased 200% and members of NAFTA have purchased a greater number of U.S. products and exports than was purchased in Europe. In addition, since the implementation of NAFTA the number of SMEs has tripled due to the increased demand for products within the region. An increase in supply demand means an increase in sales thus requiring an increase in production or manufacturing and an increase in wages for workers. For the NAFTA region, U.S. manufacturing rose 44%, wages more than doubled and employment increased by nearly 20 million from 1993 to 2000 (Tomasetti). Over the last decade, trade has more than doubled among the three NAFTA countries growing from $306 billion in 1993 to $621 billion in 2002 according to calculations from the International Monetary Fund (Senate Committee of Foreign Relations, 2004).Show MoreR elatedThe North American Free Trade Agreement1711 Words   |  7 PagesThis paper will discuss four components of the North American Free Trade Agreement: Background, events, pros and cons. Upon the research, you will discover four online articles to provide more detail and examples. This research will indicate how it was developed and the reasoning on why it would benefit the nation. Also, it will provide events that occur after the agreement was signed by congress and the recession the countries experience during the early 2000s. 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