FTA has had on U.S. wages and employment. A conclusion will address the likely future developments from this monumental trade agreement.
Many opponents of NAFTA, including Ross Perot, claim that these types of trade bloc agreements are unfair because they give preferential treatment to the member nations while excluding non-members or imposing harsher trade barriers on them. Opponents of trade agreements like NAFTA contend that they harm global trade overall because, for example, if the U.S. overcrowds Mexico with a particular industry, it is likely that Mexico, in turn, will enact anti-dumping legislation against non-member countries. Further, many see these kinds of free trade agreements as detrimental to comparative advantage for some member nations. For example, harsh environmental and labor standards often befall one or two member nations and removes comparative advantage from poorer member countries. Additionally, proponents contend that the creation of trading blocs is detrimental to free global trade because bloc-trading is an impediment to multilateral trade on a global scale. In other words, the agreements tend to create blocs that are favored and those that are not, “The political economy of the FTAs suggests that their creation weakens the support of those otherwise favoring the open multilateral system, while simultaneously creating new interest groups opposing multilateral liberalization” (Bhagwati and Krueger 31).
NAFTA established an immediate elimination of duties on half of all the U.S. goods shipped to Mexico and has provisions for gradually phasing out other tariffs over a 14 year period. Many categories of items that once had trade restrictions have seen NAFTA remove the restrictions, including automotive parts, textiles, computers and other goods. As a result of negotiations and debate, the agreement also included mandates on minimum wages, working conditions and environmental protection. Enviro...