NAFTA Flashcards
1
Q
Why NAFTA
A
- Access to low cost Mexican labour
- New jobs in Mexico
- Access to more consumers
- Faster economic growth
2
Q
What are Maquiladoras?
A
- Almost all are foreign-owned assembly plants
- Can import machinery and materials from other countries tariff free and export finished products.
- Contributed 25% of total GDP in Mexico
- Almost all maquiladoras are foreign owned.
3
Q
Objectives of NAFTA
A
- Lower tariff walls and removal of non-tariff barriers for member countries
- Promote further trilateral cooperation
- Increase investment opportunities
- Promote conditions of fair competition
4
Q
Impact of NAFTA on Member Countries
A
- Loss of competitiveness (US import agriculture products from Mexico, export to Canada)
- Elimination of tariffs mean that textiles in US will move operations to Mexico
- Free movement of trucks and trains between the countries, greater ease of movement of goods
5
Q
Concerns of NAFTA
A
- Some segments of US economy will be harmed
- Wages and employment of unskilled workers in USA will fall
- Mexico’s inadequate environmental and worker protection laws will encourage U.S companies to relocate there
6
Q
Impact of NAFTA on Asian economies
A
- US might divert trade from Asia by importing goods from Mexico
- USA might divert FDI to Mexico instead of Asia
- Asian exporters will face stiff competition from Mexico and Canada
7
Q
Mercosur
A
South American trading bloc
-Customs union
