NORTH AMER. FREE TRADE AGREEMENT.   Term Paper ID:26944 Click to get this paper

Essay Subject: Analyzes NAFTA & argues against treaty's extension (Free Trade Areas of Amer.) because of negative effects on U.S. & Mexican economies, environments & public welfare.... More...

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Paper Abstract: Analyzes NAFTA & argues against treaty's extension (Free Trade Areas of Amer.) because of negative effects on U.S. & Mexican economies, environments & public welfare. Paper Introduction: The North American Free Trade Agreement (NAFTA) eliminated, or will eliminate (by 2009), all trade barriers between Canada, Mexico, and United States. Not long after NAFTA took effect on January 1, 1994, the Clinton Administration made the extension of that agreement (the proposed Free Trade Area of the Americas, or FTAA) its top trade priority. Specifically, President Clinton wants to expand NAFTA to include all of Central and South America, thus creating a free trade zone that would extend from Alaska’s Point Barrow in the north down to Argentina’s Tierra del Fuego in the south. But such a move is potentially disastrous, as demonstrated by America’s five-year experience with NAFTA. This paper will argue against the extension because NAFTA has already had a negative impact on the economy, environment, and welfare of both the U.S. and Mexico, and those consequences will only Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. The mechanisms in NAFTA mirror those found in theWorld Trade Organization (WTO), and WTO decisions have already wreakedhavoc on environmental laws. 22-25. After six yearsof experimentation, we can confidently say that the experiment failed. Imagine if businesspeople already operating there had unfetteredaccess to the huge U.S. Based on those trade numbers, the U.S. Francis, D.R. manufacturing workers. Exporting Jobs During the debate over NAFTA, critics charged that Mexico's low wageswould result in a "giant sucking sound" of American jobs headed to Mexico.And that was before Mexico devalued its currency. American companies have tried to exploit parts of NAFTA that aredesigned to protect investors. But that will be far down the road. Ethyl, which makes the additive, alleged that the ban amounted to anexpropriation under NAFTA and took it before a panel. 22). According to the Sierra Club, approximately 44 tons ofhazardous is dumped or spewed into the air, water, and land every day bymaquiladoras. Overall, the U.S. Los Angeles Times, pp.D1, D6-D7. Would Brazil's natural world stand achance? No one doubted that Boise Cascade coulddo as it pleased if it moved to Mexico, side accords notwithstanding. BoiseCascade moved some of its operations to Guerrero, Mexico, then threatenedto move the rest of its Idaho operations to Mexico unless Congress let thecompany dramatically increase its logging on national forest land.Congress acceded to Boise Cascade's wishes, tacitly admitting that NAFTA'sside accords were abject failures. with a $5 billion surplus with Mexico in the trade of goods during the first sixyears of NAFTA. Wages in parts of Central and South America are even lowerthan in Mexico. prides itself on its republican form of government,where voters have been making decisions for 2 years. The string in trade's tail. So did supporters ofNAFTA. The auto industry has witnessed the greatest effect, asMexico exported 621, cars to the U.S. market. The North American Free Trade Agreement (NAFTA) eliminated, or willeliminate (by 2 9), all trade barriers between Canada, Mexico, and UnitedStates. Parts for manufacturing those cars account for $2 billion ofthe U.S. The workers at theHan Young truck chassis plant discovered that fact when they attempted tounionize. tradedeficit has increased to $118 billion over the last six years, while therest of Mexico's trading partners run a $19 billion trade surplus(Francis, October 18, 1999, p. The discovery that thecarcinogenic additive had been leaking into ground water in severallocations, prompted Davis' action. Also consider the fact that Mexico is in much better shape thanmany of his neighbors. Yet we give thatall away in an instant with trade agreements. Countries must be allowed to favor goodsthat are made in less polluting ways or prepared by a less damaging method(Turtle wars, October 3, 1998, p. Fashion forward. NAFTA: Off with the rose-coloredglasses. As it turned out, no benefits have been forthcoming. No doubt manyinstances of unsafe workplaces go unnoticed in Mexico, even though it isjust to the south. O'Connor, A. would have advantages overother countries trying to trade there. trade deficit with Mexicoshould decline, they said, because the U.S. and bodes ill for the rest of the hemisphere should NAFTA beextended. Instead, the U.S. Similarly, an American company sued Mexico, claimingexpropriation, when that government would not permit it to build a wastetreatment facility where it wanted (The sting in trade's tail, April 18,1999, pp. As Central and South Americadevelop, some countries, such as Chile, will reach the advanced stagesooner than other Latin American nations. (1999, June 24). The ones making thedecisions, whether it is working panels from WTO or NAFTA, are not electednor are they accountable to anyone. Those jobs, generally high-paying,had been the ticket to upward mobility for those lacking education orlanguage skills. They also often lack basicservices such as rubbish removal (43 percent have no refuse service), whichposes a huge threat to the health and welfare of people living on bothsides of the U.S.-Mexico border (A greener, or browner, Mexico?, August 7,1999, p. Mexico challengedthat law and won. lost an estimated 378, manufacturing jobs to Mexico, which were replaced by service jobs paying 38percent less. Maybe then, when the partiescould negotiate as equals (or roughly equivalent), free and fair trade willbe possible. Los Angeles Times, p. In the U.S., American companies exploit the lax environmental laws ofMexico to win concessions from state and federal governments. B1). Yet no improvements occurred,and a 1998 report detailed contaminated air, a plant strewn with electricalcords running through puddles, and hoists that often failed, droppingchassis and injuring workers (Ellingwood, 1998, A18). environmental protections, and to democracyin general. but unjust for much of Latin America. Mexico passedenvironmental laws similar to those in the U.S. Nonetheless, Canada relented. 22-23). Ellingwood, K. U.S.-Mexico talks urged on safetyat Tijuana plant. 9). Specifically,President Clinton wants to expand NAFTA to include all of Central and SouthAmerica, thus creating a free trade zone that would extend from Alaska'sPoint Barrow in the north down to Argentina's Tierra del Fuego in thesouth. and Mexico.A study of NAFTA's impact on Southern California, conducted by a professorat the University of California at Santa Cruz, found that affluent areas-such as Beverly Hills, Santa Monica, and West Los Angeles-benefited fromfree trade, while poorer areas such as East Los Angeles and Comptonsuffered greatly. Most ofthe factories have sprung up near the U.S.-Mexico border, a region alreadyoverburdened by population growth. Many of the towns are running out of water-18 percent do not havedrinking water and 3 percent lack sewage). Moreover, even those instances that come to thepublic's attention escape remedy. If NAFTA is extended, the rich will only get richer and the poor willonly get poorer. If workplace safety is not an issue, businesses will be able tospend less. Weintraub, S. Moreover, the additive had long been banned in America, Ethyl's homecountry. Soon that figure could be 1 percent, considering the relativesowing costs (35 cents versus $1.2 ) in each locale (Lee, 1998, pp. Instead of tryingto extend NAFTA, we need to be discussing how better to manage theagreement's many failings. Similarly, the U.S. The drafters ofNAFTA included the expropriation provision to protect investors whoseproperties were illegally taken by a government (in other words, they didnot trust Mexico). It can better afford to import food than countriessuch as Ecuador, which just defaulted on its Brady Bonds. How can U.S. NAFTA includes no guarantees on this front, and thus is not onlya bad deal for the U.S. 7 -71). Los Angeles, for example, has experienced a boom in fashionmanufacturing during the 199 s, yet its employment has held steady atapproximately 122, . workers compete against such wages? A clean-up fund, created as part of NAFTA, has only raised apittance of the $2 billion needed to fix the problems, which are growingevery day. Maquiladoras are required by Mexican law to send theirtoxic waste back to the country where the raw materials originated.Enforcement of that law, however, is weak, and the cost of repatriation isexpensive. (1998, April 26). In 1992, only 12 percent of American garmentmanufacturers did business in Mexico. Piecemeal expansion could be considered. Most of the people who lived in thesedowntrodden regions of Southern California were members of minority groups. (1998, April 18). Not only was their effort crushed, many workers lost their jobs,some temporarily but others were permanently discharged (Ellingwood, 1998,A18). (1999, August 7). Anyone could enter the area, includingchildren, and the chemicals are seeping into nearby water, posing serious,long-term health risks to local residents. Can we allow American corporations to shirk their moralresponsibilities to workers? For example, one site near Tijuana contains corroding drums ofchemicals abandoned in a field. From acommercial standpoint, they have to be treated the same, regardless ofwhether other creatures were harmed in their capture. This loss of sovereignty hasdelivered quite a blow to U.S. How can we stop them? Soon it will be a race to the bottom, and even Mexico willfall behind. law and international covenantsregarding working conditions will have to compete against those who do not. Conclusion Rather than a logical step forward, NAFTA was an experiment, andshould be viewed as such. NAFTArules. Meanwhile, textile workers in the Carolinas andalong the Texas-Mexico border have paid a heavy price, even though theymake a meager living by American standards (Lee, 1998, pp. The damage to the environment couldbe even greater, and the harm will extend beyond affected country. Pulling the Teeth Out of American Environmental Law Think trade agreements have no effect on you? Workers in other parts of the economy did even worse: In December1997, Mexico raised its minimum wage 14 percent in Mexico City, to 3 .2pesos per day (other parts of the country have lower minimum wages tied tolower living costs). This paper will argue againstthe extension because NAFTA has already had a negative impact on theeconomy, environment, and welfare of both the U.S. In addition, maquiladoras generate only a small percentage ofMexico's toxic waste (A greener, or browner, Mexico?, August 7, 1999, p.26). 9. References A greener, or browner, Mexico? D6-D7). Under NAFTA, Mexican exports of food to the U.S. By contrast, the areas already hit by the transformation of theAmerican economy suffered even more. 7 -71. Each choice impacts the environment in some way, from soildeterioration to lower food production to urban migration swelling alreadyovercrowded cities. goods deficit with Mexico has totaled$9 billion in six years. The infrastructure of Mexico's bordercities is threatening to crumble under the weight of the most recentgrowth. Numerous complaintsabout working conditions garnered considerable coverage, prompting 11visits by Mexican inspectors from 1993 to 1998. By 1998, nearly two-thirds had movedsome or all of their operations south of the border-and that was beforeNAFTA phased out textile trade barriers, a process that began on January 1,1999. attracted media attention). Now extend that impact to the rest of Latin America if the FTAA iscreated. B7). Clearly, the provision did not intend to apply tosituations such as this. The Economist, pp. LosAngeles Times, pp. They watched helplessly as NAFTA drained more blue-collar jobs away fromtheir already depressed neighborhoods. B1, B6. But such a move is potentially disastrous, as demonstrated byAmerica's five-year experience with NAFTA. 25). Moreover, illegal dumping alsocould increase in the near future, as the tax break for maquiladorasexpires in 2 1, which will likely prompt companies to set up ordinaryfactories that are not required to repatriate toxic waste (Turtle wars,October 3, 1998, p. (Without the mediaattention, no doubt the complaints would have been ignored, as workersafety is a low priority in Mexico.) The inspectors ordered numerouschanges, and even fined the plant $9,4 . and Canada and created anenvironment ministry. That inequality will only be exacerbated under an extended NAFTA, temptingsome companies and penalizing us all. trade deficit with Mexico (Francis, October 18, 1999, p. (1998, June 28). Despite NAFTA's guarantees thatworkers would have the right to organize, Mexico's long-held antipathy tounions continues unabated, even amid intense scrutiny. Workers' 15-year nightmare. They cannot, as thegarment industry can attest. Benson, R.W. This approach couldlead to disaster. (1999, October 18). That amounted to less than $4 per day (and the pesohas fallen further since that time). are up morethan 5 percent, while FDA inspections have plummeted to an all-time low.This led to an outbreak of hepatitis in 1997, linked to strawberriesimported from Mexico. The Economist, pp. Environmental Disaster of the Americas Proponents of NAFTA touted its environmental side accords, which weredesigned to increase cooperation among the three countries. Workers in less advanced economies would have little or noprotection, inviting irresponsible corporations to exploit employees atwill. Workers hadlittle say in the matter because Mexico lacks democratic institutions.Thus, by 1996, the hourly average for Mexican workers in manufacturing was$1.5 , compared to $17.74 for U.S. The lack of true democracy in many countries will result inmany Mexico-style devaluations. Promises, Promises Supporters of the FTAA promise greater benefits. The damaging effects of NAFTA willonly be magnified by the FTAA. And why did the workers want to unionize? For example, California has the strictest environmental laws in theU.S., made even stricter when Governor Gray Davis ordered the phaseout ofthe harmful gasoline additive MTBE by 2 2. and Mexico, and thoseconsequences will only be compounded by the FTAA. In 1997, Canada banned the fuel additiveMMT. Apply the same scenario to the rest of the Americas and the impactcould be devastating. A shrimp is a shrimp, or tuna is tuna. Leaders may find no better way to attractbusinesses than to lower costs, regardless of the pain wrought on theirpopulace. Several Asian nations challenged the lawat the WTO and won (Turtle wars, October 3, 1998, pp. As agricultural barriers have fallen,subsistence maize farmers have had to make a choice in Mexico. For that matter, could any of these countries, many of which lackeven the limited infrastructure of Mexico, absorb the kind of growthexperienced by Mexican border towns? However, as NAFTA has demonstrated, thoseside agreements are often hollow promises rather than enforceableregulations. The introduction of many more economies into the freetrade regime, most of which are much less developed than Mexico, will onlybring more devastation to working-class neighborhoods, not just in SouthernCalifornia but all over the U.S. Hunger couldbecome an even greater problem, only increasing the woes of many strugglingcountries. D6-D7). The Economist, pp.26-27. Faced with a potential $251million liability if they lost, Canada repealed the ban and paid Ethyl $13million. America, for example, banned tuna fromfishing boats that did not utilize dolphin-safe nets. and the still developing economy of Mexico. The environmental effects of NAFTA in Mexico extend beyondmanufacturing to farming. Mexico has only onefacility dedicated to toxic waste, and it can handle just 12 percent of thenation's waste. Multiply that situation by the dozens ofcountries that would be a part of the FTAA. 26). MostAmericans probably did not realize the U.S. Trade organizations reject environmental justifications for laws thattreat commerce differently. Mexico's financialcrisis in 1995 prompted the government to devalue the peso, with disastrousresults for the average Mexican. Worker Rights As if devaluation was not enough, Mexico is doing everything it can tomake the country hospitable for employers. Section 717 of NAFTA bars more rigorousinspections of Mexican food, but even basic inspections often are notconducted. Ultimately, trade agreements that function in this manner are anti-democratic. Yet, proponents want to expand NAFTA, to bring even more divergenteconomies into a single trade zone. Constitution? Rich Get Richer NAFTA has made the rich even wealthier, in both the U.S. Some havemodernized, some have changed crops, and some have looked for differentwork. Moreover, such side accords, even if enforceable, can bethwarted by companies manipulating other provisions of the trade agreement,as happened with the expropriation provision of NAFTA. That exodus will only accelerate if NAFTA is extended to the rest ofthe Americas. (1998, January 11). Christian Science Monitor, p. Better wages were a factor,of course, but mostly they unionized because of unsafe working conditions.The plant, which makes truck chassis for Hyundai, is located near Tijuana(its proximity to the U.S. Davis finds himselfunable to live up to sworn obligation to protect the citizens of his state(Benson, June 24, 1999, p. That will only encourage more challenges to environmental laws, bothin Canada and the U.S. This will create an unequal playing field, in whichresponsible corporations that abide by U.S. Supporters of the FTAA have tried to enticeopponents by offering side agreements governing, among other things, laborstandards and the environment. Not long after NAFTA took effect on January 1, 1994, the ClintonAdministration made the extension of that agreement (the proposed FreeTrade Area of the Americas, or FTAA) its top trade priority. (1998, August 12). automakers only exported 477, cars total to the rest ofthe world. LosAngeles Times, pp. (1998, October 3). People who lived in affluent areas, most of whom werewhite, had the education, expertise, and money required to capitalize ontrade opportunities thus benefit from NAFTA (O'Connor, 1998, p. A company only interested in the bottom line will find many moreopportunities to improve its profit numbers if NAFTA is extended, but atwhat cost? Think again. All these jobs are moving amidst otherwise happy times in the fashionindustry. for fiscal year 1999 (ending June3 )-while U.S. M2, M6. As a result, most of Mexico's toxic waste is dumped illegally, oftenin waterways. Since 1994, the number of maquiladoras (factories that import rawmaterials to make goods that they export) in Mexico has doubled. B7. But companies such as Goodyear, General Motors, andFirestone departed, and the blue-collar opportunities were replaced byminimum wage jobs that offered no hope for escape (O'Connor, 1998, B1). That threat is compounded by toxic waste. Forget it! banned shrimp caught in nets that donot allow sea turtles to escape. Nonetheless, that has not prevented theenvironmental disaster at Mexico's borders, which has dire consequences forthe U.S. Nonetheless, such panels regularlyissue rulings that can have pervasive effects. A success story in the making. A18. The Brazilian rain forest has already been greatlydepleted. For today, we need tofix the gaping holes in NAFTA, the agreement that we already have, beforeentering into any new deals. Lee, D. The currency devaluation benefitedbusinesses by helping them compete, at the expense of workers, who watchedtheir buying power nearly evaporate in a matter of days. Los Angeles Times, p. A more direct threat to Americans comes from NAFTA's lack of standardsregarding the importation of food. The U.S. 9). M2). If countries cannot make rules to preserve and protectthe planet's diminishing natural resources, there will no chance ofsustaining many species or of cleaning up messes already made.Environmentalists argue-correctly-that trade agreements need to makeexceptions for the environment. Never before had a trade agreement beenconsummated between such divergent economies-the advanced systems of Canadaand the U.S. Proponents claimed that NAFTA would provide the U.S. Moreover, the percentage raise didnot keep up with inflation, so those workers earning the minimum wageactually lost buying power. Workers in more advancedeconomies, such as Chile, Argentina, and Brazil, would be protected bytheir laws. Mexico City's archbishop called the increase"criminal" because it amounted to a pay cut (Weintraub, 1998, p. surrenders part of itssovereignty with each trade agreement. Turtle wars. Instead, the overall U.S. But that order had to be put on holdafter Mexico objected that California was illegal restraining free trade,and NAFTA took precedent over federal and state law. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.