NAFTA & GATT RE: NAFTA and GATT in the next 10 ye

NAFTA and GATT have both been described as historic agreements. They have been promoted by supporters as necessary economic moves for the United States, and both are intended to reduce tariffs, promote trade, and in the long run increase productivity. Critics claim that each will enmesh the United States in an agreement with foreign nations that will benefit those nations more than it benefits the United States and that might indeed prove detrimental to U.S. interests by lowering employment, increasing the flight of businesses to other countries with lower labor costs, and increasing imports while reducing exports. Concerns have been raised as to potential problems, with such concerns being raised by business, industry, labor, and consumers.

NAFTA is a historic agreement that may not have been examined as closely as it should on either side of the border. Mexico conducts as much as 90 percent of her trade with the United States. The premise of the agreement is that free trade should be left exclusively to the free market. In practice, this means giving free rein to those who command the most power and the most wealth. The agreement also covers only things economic, such as financial matters, investment, intellectual property, and commerce as well as dispute resolution, banking, transportation, and services. It does not include other topics--the political, the social, the environmental (at least not directly), the cultural. Castaneda and Heredia, writing for a

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bs in the first few years than it creates, while old industries and agricultural produces die off, are swallowed up, or join with foreign ventures (Castaneda 66). Castaneda notes that the Mexican government has been using NAFTA as a way of addressing Mexico's severe economic problems and has been moving this way singlemindedly. The leaders have felt that the only way to attract the foreign capital necessary to stabilize the exchange rate and to fund the ensuing current account deficit would be to provide hesitant potential investors with guarantees of continuity through economic policy and access to the U.S. market through an agreement with the U.S. It was hoped that NAFTA would satisfy both requirements and that the sustained economic growth generated by would narrow income differentials by creating jobs (Castaneda 73). From the U.S. point of view, recent revelations regarding the precarious nature of the Mexican economy only increase concerns about NAFTA, and one of the primary problems facing the U.S. on all levels may be whether the Mexican economy survives. The prospect of a U.S. bail-out of Mexico has exacerbated this concern and made many business leaders, labor leaders. and consumers fear that NAFTA could become an

Category: Economics - N