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Benz Benz

on 3 December 2014

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Transcript of NAFTA

What are the disadvantages of NAFTA?
made it possible for many U.S. manufacturers to move jobs to lower-cost Mexico where the manufacturers remained lowered wages
many of Mexico's farmers were put out of business by U.S.-subsidized farm products
What is NAFTA?
How does NAFTA work?
When did it start?
How did it all begin?
What was its purpose?
What are the advantages of NAFTA?
What are the disadvantages of NAFTA?
Important economic indicators

Economic sectors
Fiscal/Monetary Policy
International trade Policy
Macroeconomic impact
Microeconomic impact

The North American
Free Trade Agreement
Main Concept
Interpretation to the Thai economy
Economic Policy
What are the advantages of NAFTA?
created the world’s largest free trade area
It allows the 450 million people in the U.S., Canada and Mexico to export to each other at a lower cost
$1.2 trillion in goods and services annually
increases the U.S. economy
What was its purpose?
Eliminate barriers
Promote conditions of fair competition
Increase investment opportunities
Provide protection and enforcement of intellectual property rights
Create procedures for the resolution of trade disputes
Establish a framework
How did it all begin?
President Ronald Reagan, who campaigned on a North American common market
Canadian Prime Minister Mulroney agreed with Reagan to begin negotiations for the Canada-U.S. Free Trade Agreement
When did it start?
was signed in 1992
was ratified in 1993
How does NAFTA work?
establishes clear rules for commercial activity
overseen by a number of institutions
What is
a comprehensive trade agreement
enforced: January 1, 1994
eliminated most tariff and non-tariff barriers among member countries
Important economic indicators (2013)
Trade Balances
The U.S. goods trade deficit with NAFTA was $86.0 billion in 2013, a 7.5% decrease ($7 billion) over 2012.
The U.S. goods trade deficit with NAFTA accounted for 12.5% of the overall U.S. goods trade deficit in 2013.
The United States had a services trade surplus of $43.7 billion with NAFTA countries in 2012 (latest data available), up 4.6% from 2011.
• U.S. foreign direct investment (FDI)
• U.S. direct investment in NAFTA Countries
• NAFTA Countries FDI in the United States (stock)
• NAFTA countries direct investment in the U.S. is in the finance/insurance, banking, and manufacturing sectors
• Sales of services in NAFTA
Fiscal policy
Surplus in fiscal year 2000
Deficit in year 2004
year 2005: the deficit was decreased
In late 2007 to early 2008: enter a particularly bad recession
Solution: passed a series of costly economic stimulus and bailout packages
Result: the deficit would increase to $455 billion
Fiscal Year 2015 (October 1, 2014 -September 30, 2015) the U.S. Federal budget deficit will be $564 billion
on track to expand
The economy is projected to grow
The Bank of Canada has held its key policy rate
September 2013: the President unveiled a fiscal reform bill
The legislation’s main goal
Oil production is declining
The reform
The bill is a significant tax increase
The fiscal reform

Monetary policy
Refers to what the Federal Reserve does
The goals
Open market operations, the discount rate and reserve requirements
Bank of Canada
influencing short-term interest rates
raising and lowering the target for the overnight rate
lead to changes in other interest rates
affect people's spending decisions
influences the level of demand
When demand exceeds supply, prices will rise
taken by Banco de México
influence interest rates and inflation expectations
ensuring an environment of low and stable inflation
create the appropriate conditions

International trade policy(For NAFTA)
1. To eliminate tariffs
2. To decrease nontariff barrier
3. To focus on a compromise
4. Member countries have an agreement to set the Rule of Origin and the proportion of using resources
5. Member countries have an agreement to protect intellectual properties, patent, labor right, independence of Trade and Investment policy, free labor mobility
6. To set up an environmental committee
7. There is a backup plan during an adjustment period
Economic sectors
Macroeconomic impact
Microeconomic impact
Some regulations affect Thai goods
Mexico is the neighboring country of America
Private sector
More competitive
Efficiently production is required
Make a better quality for products
Public sector
Cooperate with the private sector
Support Thai export
Financial sector
Mexican economy is growing which can attract Thai investors
a major shift occurred in support of agricultural producer receipts among NAFTA countries between 1982-92 and 1999
US and Canada: farm families on average receive the majority of their income from off-farm sources
Mexico: unlikely to be changed dramatically
cheap labor and material from Mexico
capital and technology from US and Canada
gather up to make good quality products
the licensing of professionals will be based on competence, not nationality or residency
reducing the risk that products of U.S. creativity and innovation could be unfairly exploited in Mexico
AT&T, ITT and MCI International
Firms providing construction and engineering services, especially for those companies from America
Presented by
Kasin Thumpothong 5705289
Kananake Pornsiriprapa 5705290
Guntorn Chinvattanachot 5705291
Chanitchapha Maneerat 5705298
Jaturapat Srikaew 5705300
Napat Kamolnate 5705319
Dario Ketkittikhun 5705324
Netipol Polem 5705339
Boonyaporn Charoenkittaweewong 5705340
Yotsaphon Wattanawangkraisri 5705363
Laksika Thanyachonmanee 5705369
Saruth Kritdum 5705382

Full transcript