NORTH AMERICAN FREE NORTH AMERICAN FREE TRADE AGREEMENT TRADE AGREEMENT

(NAFTA)(NAFTA)

PRESENTED BY:

1)SAKET RARA

2)JITESH BHILARE

3)MUKESH KOTHARI

4)GAURAV KUMAR

5)PANKAJ DASHMUKHE

6)MITHUN SADAVARTE

7)DEEPAK DODDAMANI

INTRODUCTIONINTRODUCTIONNAFTA is an agreement signed by the

governments of the United states, Canada and Mexico creating a trilateral trade bloc in North America.

Members: Canada, Mexico & United States Official languages: English, French and Spanish Secretariats: Mexico city, Ottawa, Washington

D.C. Establishment: 1 January 1994 GDP of NAFTA alliance: USD 12 trillion NAFTA supplements: NAAEC & NAALC

BACK GROUNDBACK GROUNDIn 1988 Canada & the United States signed the

Canada-United states Free Trade Agreement

The American government then entered into negotiations with the Mexican government for a similar treaty

Canada asked to join the negotiations in order to preserve its perceived gains under the 1988 deal

The agreement NAFTA was signed by U.S. president - George H. W. Bush, Canadian prime minister - Brian Mulroney and

Mexican president - Carlos Salinas in San Antanio, Texas on December 17,1992.

OBJECTIVES OF NAFTAOBJECTIVES OF NAFTA To eliminate trade barriers & facilitate the cross-

border movements of goods and services between the parties

To promote conditions of fair competition

To substantially increase investment opportunities

To provide adequate and effective protection & enforcement of intellectual property rights in each territory

To create effective procedures for the implementation and application of this agreement ,for its joint administration & for resolution of disputes

To establish a framework for further trilateral, regional and multilateral co-operation to expand and enhance benefits of this agreement

North American Agreement on North American Agreement on

Environmental Co-operation (NAAECEnvironmental Co-operation (NAAEC))NAAEC created Commission for Environmental

Co-operation (CEC) in 1994

Development of common priorities for the protection of certain species

Developing North American Conservation Action Plans for three shared marine species

Provide tools such as map of terrestrial eco-regions which management agencies are using in this programs

Setting out common mechanism for planning and monitoring bird conservation programs

North American Agreement on Labor Co-North American Agreement on Labor Co-

operation (NAALCoperation (NAALC)) NAALC members work together to protect,

enhance and enforce the basic rights of workers.

Establishment of institutions & creation of formal process to raise concerns related to labor law enforcement directly with government

Undertaken a wide range of co-operative programs and technical exchanges on industrial relations,

occupational safety and health, child labor, gender equality, protection of migrant workers

Trade and Investment Effects

NAFTA is a broad agreement, but improved market access, including tariff reductions on merchandise trade, was the major U.S. goal.

After ten years, most tariffs have gone to zero, except for some very sensitive (mostly agricultural) goods that have limited protection for up to 15 years. Clearly, U.S.-Mexico trade and investment have grown sharply over the past decade.

From 1994 to 2003, U.S. exports to Mexico rose 91%, compared to 41% to the world. U.S. imports increased by 179%, compared to 89% from the world.

EFFECTS OF NAFTA EFFECTS OF NAFTA BENEFITS

Benefit’s the importers by reduced or duty free goods.

Can make the exporter more competitive then other non-participating countries

There has been great increase in trade among the three countries and market access within each country also increased considerably.

Mexico’s poverty rate decreased and real income increased, even after economic crisis 1994-1995

NAFTA had been beneficial to business owners and elites in all three countries

ADVERSE EFFECTSADVERSE EFFECTS INCREASE IN PRODUCTIVITY AND GROWTH IS NOT

VERY HIGH

NAFTA RESULTED IN A NET LOSS OF 394,834 JOBS IN FIRST THREE YEARS ITSELF

MANY CANADIAN AND MEXICAN PEOPLE MIGRATED TO USA UNDER TEMPORARY STATUS (TS) & TREATY’S NATIONAL DEPENDENT STATUS (TDS)

YET THERE IS NO NET INCREASE IN EMPLOYMENT LEVEL

LIMITATIONS

It has negative impacts on farmers in Mexico who saw food prices fall based on cheap imports from U.S. agribusiness

It has negative impacts on U.S. workers in manufacturing and assembly industries who lost jobs.

Critics also argue that NAFTA has contributed to the rising levels of inequality in both the U.S. and Mexico.

Some economists believe that NAFTA has not been enough (or worked fast enough) to produce an economic convergence, nor to substantially reduce poverty rates

PUBLIC OPINION

Public opinion toward NAFTA in the United States, Canada, and Mexico is mixed. A survey conducted by CIDE and COMEXI in Mexico showed that 64 percent of the Mexican public favored NAFTA.

The Program on International Policy Attitudes reported in a poll that 47 percent of Americans thought that NAFTA has been good for the United States, while 39 percent thought it had been bad for the country

CONTRIBUTION TO NAFTA CONTRIBUTION TO NAFTA

MEMBER COUNTRY CONTRIBUTION / SUPPLY

UNITED STATES

Technology, Services, and data processing, medical and space research and capital

CANADA Mineral, forest products, energy and technological expertise

MEXICO Labors, Petroleum and agricultural products

INDIA’S TRADE WITH INDIA’S TRADE WITH NAFTANAFTA

INDIA’S EXPORT TO NAFTA in 2005-2006

Total USD 18,817.71 millions

INDIA’S IMPORT FROM NAFTA in 2005-2006

Total USD 10472.22 millions

INDIA’S TRADE WITH INDIA’S TRADE WITH USA USA

INDIA’S MAJOR EXPORTS ITEMS

INDIA’S MAJOR IMPORT ITEMS

PRECIOUS STONES

DIAMONDS & GOLD JEWELLARY

WOVEN APPAREL

KNIT APPAREL

FISH & SEAFOOD

IRON/STEEL PRODUCTS

ORGANIC CHEMICALS

SOPHISTICATED MACHINERY

ELECTRICAL MACHINERY

MEDICAL & SURGICAL EQUIPMENTS

AIRCARFTS, SPACE CRAFTS

PLASTIC

WOOD PULP

METALS

INDIA’S TRADE WITH INDIA’S TRADE WITH CANADACANADA

INDIA’S MAJOR EXPORT ITEMS INDIA’S MAJOR IMPORT ITEMS

READYMADE GARMENTS

GEMS,JEWELLARY & PRECIOUS STONES

ENGINEERING GOODS

IRON & STEEL ARTICLES

COFFEE

SPICES

ORGANIC CHEMICALS

NEWSPRINT – IN ROLLS OR SHEETS

COPPER ORES AND CONCENTRATES

PEAS – DRIED AND SHELLED

IRON SCRAP,POTASH, COPPER

WOOD PULP

MINERALS

INDUSTRIAL CHEMICALS

INDIA’S TRADE WITH INDIA’S TRADE WITH MEXICOMEXICO

INDIA’S MAJOR EXPORT ITEM INDIA’S MOJOR IMPORT ITEM

TRANSPORT EQUIPMENT

DRUGS, PHARMACEUTICAL

READYMADE GARMENTS

INORGANIC/ORGANIC CHEMICALS

MACHINERY & INSTRUMENTS

ELECTRONIC GOODS

DYES & INTERMEDIARIES

ARTICLES OF IRON OR STEEL

IRON & STEEL

PLASTIC & ARTICLES THEREOF

NUCLEAR REACTOR

MEDICAL OR SURGICAL EQUIPMENTS

ORES,SLAG AND ASH

ORGANIC CHEMICALS

FUTURE OF NAFTAFUTURE OF NAFTA Clearly not about cheap labor It is about integration of the North

American marketplace It is about moving up the value-added

chain It is about maintaining and increasing

competitiveness and productivity Mexico, like the U.S., fears losing its

manufacturing sector to other countries – why? Over the last 5 years:◦China’s exports to the U.S. grew 300%◦Mexico’s exports to the U.S. grew 30%

CONCLUSIONCONCLUSION

NAFTA has played an important role in the overall development of the three nations

- the progressive elimination of tariffs & trade barriers,

- Dispute resolution- Commitment to intellectual property &

environment legislation- Mutual entry into governmental bidding

& the financial and other service sector

But on the other hand it is also responsible for causalities like loss of jobs, migration, rising level of inequality and many others.