Answer to Question #242135 in English for Peter

Question

What, in your opinion, would be the best way or idea to avoid the negative impact of NAFTA on the United States, Mexico, and Canada? Briefly explain the situation.

Answer 1

North American Free Trade Agreement (NAFTA) was a landmark trade deal between Canada, Mexico, and the United States that took effect in 1994. It contributed to an explosion of trade between the three countries and the integration of their economies. NAFTA reduced or eliminated tariffs on imports and exports between the three participating countries, creating a huge free-trade zone. Some of the negative impacts of NAFTA included;

• Maquiladora Workers Were Exploited - NAFTA expanded the maquiladora program by removing tariffs. This program allows United States-owned companies to employ Mexican workers near the border. They cheaply assemble products for export back into the United States. The program grew to employ 30% of Mexico's labor force. These worksites were known for abusing worker rights, with reports of workdays lasting 12 hours or more and women being subjected to pregnancy test when they applied for jobs.
• United States Jobs Were Lost - Since labor is cheaper in Mexico, many manufacturing industries withdrew part of their production from the high-cost United States. Between 1994 and 2010, the U.S. trade deficits with Mexico totaled $97.2 billion. In the same period, 682,900 U.S. jobs went to Mexico. But 116,400 of those jobs were displaced after 2007, meaning the 2008 financial crisis may have played a role. Almost 80% of the losses were in manufacturing. The hardest-hit states were California, New York, Michigan, and Texas. They had high concentrations of the industries that moved plants to Mexico. These industries included motor vehicles, textiles, computers, and electrical appliances.
• Mexico's Farmers Were Put Out of Business - Thanks to NAFTA, Mexico lost nearly 1.3 million farm jobs from 1994 to 2004.The 2002 Farm Bill subsidized U.S. agribusiness by as much as 40% of net farm income. When NAFTA removed trade tariffs, companies exported corn and other grains to Mexico below cost. Rural Mexican farmers could not compete. At the same time, Mexico reduced its subsidies to farmers from 33.2% of total farm income in 1990 to 13.2% in 2001.Most of those subsidies went to Mexico's large farms. These changes meant many small Mexican farmers were put out of business by highly subsidized American farmers. 
• Mexico's Environment Deteriorated - In response to NAFTA’s competitive pressure, Mexican agribusiness used more fertilizers and other chemicals, costing $36 billion per year in pollution. Rural farmers expanded into marginal land, resulting in deforestation at a rate of 630,000 hectares per year.

The best way to avoid the negative impacts of NAFTA on the United States, Mexico and Canada would be to renegotiate the terms of NAFTA, to resolve trade issues.