Summary of the Article:
As the North American Free Trade Agreement (NAFTA) turns 20 years old, there has been some evaluation regarding its success and downfall. The three economies have benefitted from NAFTA in terms of employment, however Mexico has since received between $15 billion to $20 billion in foreign direct investments from a previous $3 billion, and now exports $1 billion per annum. However, behind its success, NAFTA has experienced some criticism about opening up markets and competition.
My thoughts:
Although NAFTA seems to be greatly benefitting Mexico the most, the free trade agreements may be causing a loss of sovereignty. This could be a result of the United State's influence in NAFTA, because they have the greatest economic output, therefore they have the strongest foothold in the flow of goods and services. What this could mean is that if at any point the US does not benefit as much as they would like, they have an economic advantage over Mexico, so Mexico essentially has to "trade" in favour of the US. This way, Mexico looses sovereignty because despite being able to trade freely in order to maximise their economic gain, they much also be aware of the implications that their actions have on the US (or even Canada). In my opinion, they are not gaining as much as they potentially could, merely because they have a smaller economic output compared to the US.
Furthermore, despite the criticisms about NAFTA, opening up markets and allowing competition is always more advantageous than setting up trading blocks that limit the flow of goods and services amongst willing and able nations.
Link for the article:
http://www.dw.de/20-years-on-does-nafta-need-an-overhaul/a-17453191
So you're an anti-Malthus neo-liberalist... How do you feel about these labels? Are they fair?
ReplyDeleteI would argue that opening up markets and allowing competition is NOT always more advantageous because its too easy to hurt the little guy if they're going up against large business with a lot of money and strong backing. Capitalists would say this is a good thing because it improves the competitive market but opponents would again argue that consolidation of power disallows a fair playing field.
You also have to be clear with your wording. Look, if you say "trading block" that is too close to "trade bloc" which is a group of countries that trade with one another. What you want to say is "barriers to trade." That's what you mean ultimately, right?
Mr Barnes, I was going to put barriers to trade or barriers to entry but I got insecure haha
Delete3 Questions:
ReplyDelete1. Y u so smart (superduper)
2. Y u copy my dog style background (jk don't be mad sorry)
3. Do you think that totally abandoning such trade relations with 'Murica and Canada would be better? Mexico could potentially be making itself more vulnerable in the long run. It's hard to strike a balance because leaning too far one side or the other causes some serious problems. Hopefully, NAFTA doesn't get crazy intergovernmental and start controlling more than they should. (They might turn out like the EU and start selling citizenships for $$$)
1. coz i'm trying to be like u
Delete2. coz it's a pug taking a selfie & u know how i get with selfie
3. no i don't think it'll be better because Mexico is still a developing country, so you're right, they will make themselves more vulnerable. however, the criticism lies in that there is sort of a "heirarchy" of power within NAFTA. i understand your side as well as theirs. IMO, this is where there is a grey area because such problems are inevitable, it's impossible to have a perfect agreement.