ANALYSIS OF NAFTA

Hi, My name's Nicole Haydock, and today I'm gonna be

doing a policy analysis of NAFTA.

So first, it's important to look at what is NAFTA?

Basically, what it means is the North American Free Trade

Agreement and is broken down by the US Department of

Homeland Security.

NAFTA is an established free trade zone in North America.

It's signed by Canada, United States and Mexico and talk

to me in about 1992.

However, it went into full effect in 1994.

So in addition to that, there's also three main sectors

that are part of NAFTA and that includes agriculture, automobiles

and textiles.

Slapping side.

Why was NAFTA created in the first place?

Well, most notably, it was an investment opportunity for corporations.

It lowered trade barriers and made it much cheaper and

easier to ship products between the three countries.

Um, in addition, it was supposed to help mitigate illegal

immigration into the United States from Mexico.

And it would do this by you know, better the

economy in Mexico.

And to do that it would create more job opportunity.

So that was kind of the idea and the original

hope and intent behind all of this in the first

place. It was definitely a very.

It was considered a very unprecedented precedented deal in the

beginning, seeing a trade deal occur between two large nations,

such as the United States and Canada, with less developed

nations like Mexico.

But again, there was hope that they kind of all

work together and benefit each other in ways and also

work on some issues outside of trade.

A ZX well, so now that we know what NAFTA

is, it's important to look at what really came from

this. So the first thing that comes up most often

is you'll see a lot of people having very heated

debates over whether or not there was job loss in

the US Now it's definitely very complicated to tell if

job loss was no are tied directly to NAFTA or

if it had to do with many other factors over

the years.

I mean, between 1994 to present day has been a

lot of events that have occurred in a lot of

fluctuations, and in addition, it also depends on what Mark

or what sector looking at on the agricultural sector.

Job opportunity for the American citizen has decreased.

And however, if you look at the automobile sector, job

opportunity has increased, so it's very unclear again.

Is that because of NAFTA, or is that because of

other policies and events that have come up over the

years? It's quite complicated to say and there's a lot

of debate over Lex, but it's an important thing to

mention and it's important thing to think about it to

consider, because otherwise we hear a lot about how the

United States has benefited.

But it's important to look at.

It might not be all benefit for us, so another

effect that came out of this was that the Mexican

federal minimum wage was, at the time, 30% lower than

the United States wage.

So this caused a lot of manufacturers to move towards

the cheaper labor.

I mean, they want cheaper production costs, toe increase profit

overall, so this caused a big migration of manufacturing down

self. Um, also in that and like in the Mexican

setting, you see over two million small scale farmers having

to shut their doors, and that's because they could not

afford to stay open anymore.

Following like the implementation of NAFTA and the big commodity

market. So what we also want to look at Excuse

me, but we also want to look at is who

benefited from this policy.

So large corporations in different industries were definitely the biggest.

Like beneficiaries of this policy, they are pretty much the

only ones who are really able to answer this global

market. I, as an individual, don't have anything I need

to do this national trade deal with.

Therefore, I'm rather unaffected in stores.

However, as a consumer, I mean, we definitely benefit from

the rather cheap labor that manufacturers encounter down in Mexico.

Um, so I suppose we could be considered a beneficiary

as well.

So but corporations are the biggest one at the top

of the list.

Um, the U.

S agricultural sectors another benefit on here.

But I do want to mention that those are large

farms. We're talking.

We're not talking the small farm down the road.

They have not benefited from NAFTA.

It is going to be the big farms that have

the capacity to reach and enter the global market.

Um, and again, neo liberalism is being perpetuated quite happily

throughout NAFTA.

It's this idea of survival of the fittest or competition.

That is really the strongest.

And what you see from that is on Lee, a

few really large farms.

So that's the situation we've kind of created.

And those are the people who have truly benefited from

here. So now that we've seen what's come of NAFTA

directly, you can also we can come up here and

look at how it's been a lot more turbulent than

anyone ever expected when it was originally created.

So there's been quite a few problems that have arisen

under NAFTA.

Like I was mentioning earlier.

The competitiveness in the market has really gone up in

skyrocketed and the commodity based market that evolved from this

three United States and Canada.

We have already been kind of accustomed to this.

This is something that we've been working with her a

while. Where is Mexico was not doing that?

This was quite different from them.

It was a very sudden change.

They were based on a much more like smaller regional

market, with people producing for themselves being much more self

reliant. This if you look at the last bullet, however,

changed significantly.

This was like the big 1, 80 of this deal

is following NAFTA's implementation.

There was a major food dependency in Mexico, and this

is because food fresh produce that was being grown was

being grown in order to be exported out of Mexico.

It was grown for United States and for Canada.

It was not grown from Mexican people to eat.

If you know what I mean.

It's there was not really a market for it.

They're farmers considered they were large farms that could access

the global market, like I said, and they found more

profit in exporting their foods than Sally in a home.

So now this created a huge sense of food.

Independent food dependency, of course, their home.

The other issue that we see back here in America

is there has been a huge change in labor forces

here. So right now in the agricultural sector, about 70%

of farm labors are from Mexico, and 70% of those

workers are currently undocumented.

So that's something that a lot of people don't notice

until you see times that are high.

It's highlighted, such as right now.

During the pandemic.

The past spring, Ah, lot of farmers were finding their

whole harvest completely going to waste because they were not

able to get people up here from down south because

borders were closed.

So that's definitely an issue when you're relying on these

migrant populations to move around.

E mean, it's the fact that farmers don't or not

just farmers.

But I should say these large scale institutions have had

this idea that they don't want to pay people more

money for this work and if they would like to

stay with the populations who have no other choice but

to accept the rates that they're willing to pay.

So moving on, we kind of get into what attracted

Mexico to this in the first place.

You know, like I've said, there's been a lot of

misfortune that's come, and they also weren't quite set up

for this market style originally.

So what was the driving force for really pushing them

in there?

But a big one was, um which.

But as I had mentioned earlier, they were really hoping

that all parties could benefit each other.

So Mexico, Canada and the United States could all work

together and find benefit, including in Mexico, and that it

would reduce immigration.

Um and Mexico officials or Mexican officials have also really

hope that they could increase their technological industries and standings

and that by drawing and more manufacturers and industries into

their country, that it would allow for innovations and advances

in the long run, help their citizens and help their

people. And part of doing that was they intentionally kept

wages very low for citizens in Mexico in orderto compete

on industrial investment level with China.

So that was a huge effect out of NAFTA.

No, that's not something NAFTA directly created.

However, it kind of set the stage for that to

come and happen.

So with all that being said, the next important step

to look at here is changed because in these big

policies of changing administrations and fluctuations and the political climate

all the time, you see a lot of change of

things, and NAFTA was not exempt.

So when the Trump administration came along, Trump's personal mission

was to get rid of it.

He hated NAFTA, and that was a big part of

his campaign.

On multiple occasions, he called it the worst trade deal

ever made.

And so that's that once he gets into office, however,

not much actually changes.

Uh, in the agricultural sector, barely Anything changed it all?

The auto sector.

There were some rather large changes that happened there.

But again, agriculture not much changed it all, which was

quite interesting, in my opinion, just because he's big into

my great or immigration.

And there's lots of ideas on how to change that

through this policy.

So I definitely think he would have been more interested

there. Um, the biggest change that did come out of

this, though, was simply the name It was changed.

The United States, Mexican candidate, Canada agreement.

Camden. Um, so that was a big change that came

from there.

So you'll no longer see it referred to as NAFTA,

but the U S M c A.

So, besides, the Trump administration was doing there have definitely

been some minor solutions to these problems of immigration that

have come out of NAFTA.

Um, one of the ones that's currently going on is

by the Mexican president himself.

Andres Manual Lopez, opera door eyes that he's increased the

federal minimum wage by 19% in 2019, and then he

got increased it by an additional 20% in 2020 But

I think it's important to note that even with that

additional 39% it's still only a total of 6 50

per day, which is half of the hourly minimum wage

in Arizona, which is insane.

Um, and the most interesting, in my opinion, is the

compensation and transfer policy.

Now, this is a policy that they use over in

Europe, and it's a trade policy, and what it means

is that the more developed or more successful nations have

a certain agreement of compensation for the less developed nations.

And what that does that compensation does is that it

creates more opportunity for jobs and better infrastructure in those

other countries.

So Greece was considered less developed country at one point,

and a lot of people from Greece we're leaving and

migraines other countries in Europe, and it was creating different

economic. Foolish is for the other countries.

So this policy came up and it's been used to

help mitigate that and it's been helped create, um, or

a scene of equity throughout the nations and help balance

things out.

So you don't see one with you know all of

this success with trade and then another one totally losing

out. Um, I think that that could definitely be a

very interesting solution here with NAFTA.

In terms of that with looking in, how can we

look at how you know our commodity based policies are

in looking at?

Mexico is producing all of that fresh food for these

other countries, and we're producing processed foods for them.

So how can we balance that out more so, But

overall, that's a quick run down on the North American

Free Trade Agreement.

It's definitely quite complicated, and it goes all different ways

from there.

This was just a small part of the agricultural sector

as well.

Focus on immigration and the food, different food policies.

I hope you learned something from this presentation and that

it goes somewhat smooth enough.

So thanks for listening.

ANALYSIS OF NAFTA

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