Which Of The Following Is True About The North American Free Trade Agreement (1993)

In 2015, the Congressional Research Service concluded that “the overall net effect of NAFTA on the U.S. economy appears to be relatively modest, largely because trade with Canada and Mexico accounts for a small percentage of U.S. GDP. However, there have been adjustment costs for workers and businesses as the three countries have adapted to more open trade and investment between their economies. The report also estimates that NAFTA has added $80 billion to the U.S. economy since its inception, representing a 0.5% increase in U.S. GDP. [85] U.S. trade with Canada more than doubled from $166.5 billion to $362.2 billion during the first decade of the Free Trade Agreement and NAFTA (1989-1999).

U.S. exports to Canada increased from $100.2 billion in 1993 to $312.1 billion in 2014, then fell to $266.8 billion in 2016. U.S. imports from Canada increased from $110.9 billion in 1993 to $349.3 billion in 2014 and then fell to $278.1 billion in 2016 (see Table A-1). After collapsing during the 2001 recession, total trade with Canada reached a new high of $600.6 billion in 2008, falling victim to the 2009 financial crisis when it fell to $430.9 billion. The United States has had a trade deficit with Canada since the FTA/NAFTA, from $9.9 billion in 1989 to $78.3 billion in 2008 before falling back during the 2009 recession. In 2016, the trade deficit with Canada narrowed further to $11.2 billion. Although the trade deficit with Canada is attributable to the FREE TRADE AGREEMENT/NAFTA, increases have been uneven and can also be attributed to other economic factors such as energy prices.45 The United States recorded a trade surplus of $28.3 billion in services with NAFTA countries in 2009 and a trade deficit of $94.6 billion (an annual increase of 36.4%) for goods in 2010. This trade deficit accounted for 26.8% of the total U.S. trade deficit in goods. [89] A 2018 study on global trade published by the Center for International Relations identified irregularities in the trade models of the NAFTA ecosystem using theoretical network analysis techniques.

The study showed that the US trade balance was affected by opportunities for tax evasion in Ireland. [90] One of the main arguments in favour of NAFTA at the time it was proposed by policymakers was that the agreement would improve economic conditions in Mexico and reduce the income gap between Mexico and the United States and Canada. Studies that have addressed the issue of economic convergence70 have found that economic convergence in North America has not materialized. A study indicates that NAFTA has not kept its promise to shut down Mexico and the United States. The development gap is due in part to the lack of deeper forms of regional integration or cooperation between Mexico and the United States.71 The study argues that domestic policies in both countries, as well as the underlying geographical and demographic realities, contribute to persistent income disparities. .

 
  • October 16, 2021
  • Uncategorized

Comments are closed.