NAFTA: Gainers and Losers

Economic cooperation has been a trend in neighboring countries to erect a free-trade zone for the benefit of its constituent countries. The largest of such, the northbound American escaped Trade Agreement, was found in 1994 by the three North American countries. The members of NAFTA ar the US, Canada and Mexico which includes a total of 416 million people and a gross domestic product totaling to $12 trillion (Pohlmann, 2006). NAFTA aimed to tot ally remove trade barriers between the members for 15 years, which is scheduled to be in 2009. It also reduces the non-tariff trade barriers like healthy regulations significantly.Although NAFTA major advantages, many atomic number 18 against it. Most of them are in the non-economic areas, and undermentioned are examples US labor unions, environmentalists and Mexican farmers. They believe that NAFTA has unfavorable personal results on them. Not all Mexicans are against it, in fact some(a) of them had high hopes that the implementation of this contract would help boost their economy (Pohlmann, 2006). The NAFTA come forth is debated in the Congress, with three major subjects employment, environment and immigration from Mexico to the US.Tariffs had been an important mover in NAFTA for tariffs are taxes on imports and it usually makes imported products more big-ticket(prenominal) in order top benefit local products. NAFTA participants agreed to melt off down the tariffs by 50% and they also agreed to reduce tariffs to 0 in the succeeding fifteen years. Economists clearly saw the benefits NAFTA could confound with all its participants. They based their reasoning with the principle of comparative advantage wherein their unsophisticated would be more organized in creating their goods.Thus each country would modernize the goods wherein they are more efficient in producing and they would trade those goods with the goods of other country (which they are very good in producing in their own). However, there are those who contested the free trade contract believing that it would set about accepted effect on employment as well as on income. in that respect are those who argue that there would be a immense deal of unemployment because of rivalry in Mexico. They argued that since wages are much move in Mexico as compared to United States, then businessmen would start woful their businesses in Mexico. However, there are those who argue that the reason behind high wages in US lies on the fact that worker efficiency is largeer in US as compared to Mexico.NAFTA proved to have great consequence in terms of employment in US. According to a study conducted by the US International Trade Commission (ITI), the US government could gain moderately from a free trade agreement with Mexico. A historical study also showed that NAFTA could produce about 134, 000 jobs in the US. However, a simple method of study conducted by Baldwin and Kahane showed the effects NAFTA could have in terms of employment. The pa rticular study had been conducted in order to specify which division would have employment gains and which would undergo job losses. A tabular data had been used in order to create two variables, that of gainers and that of abiders. Among the gainers are electrical and non-electrical machinery alike as well as rubber chemicals. However, on the side of the losers we have textiles, glass, leather products and the like. It is important to distinguish gainers from losers and thus an translation is provided in the quotation below.The term GAINERS is associated to the number of employees in areas that were projected to have job gains, maculation the term LOSERS is related to job losses (Kahane, 1996). Thus, the effect of NAFTA allowed a rise in trade in both Canada and Mexico. There is also no clear evidence that US indeed lose jobs because of Mexico. And all in all it showed that there are industries which gained because of the NAFTA agreement while there are also those industries th at had had their share of losses as had been mentioned in this paper.ReferenceKahane, L. (1996). Congressional voting patterns on NAFTA an empirical analysis North American Free Trade Agreement Electronic Version. The American Journal of economics and Sociology. Retrieved June 4, 2007 from http//findarticles.com/p/articles/mi_m0254/is_n4_v55/ai_18910967.Pohlmann, D. (2006). The Economic Impact of NAFTA on Mexico Electronic Version. Scholarly Publishing House. Retrieved June 4, 2007 from http//www.grin.com/en/preview/67522.html.Rosson, P., Runge, F., & Moulton, K. S. Preferential Trading Arrangements Gainers and Losers from Regional Trading Blocs Electronic Version. Retrieved June 4, 2007 from http//www.ces.ncsu.edu/depts/agecon/trade/eight.html.