Their aim was to eliminate all tariffs on bilateral trade between U. S and Canada. Then in 1991 U. S, Canada and Mexico aims at establishing NAFTA. It went into effect in 1994. Many people expressed their fears that, it will cause large job losses in the U.S textile industry’s production is moved from United States to Mexico. They agreed that the treaty should not be adopted because of the negative impact it would have on U. S employment. But their argument was not successful. Between 1994 and 2004 production fell by 40% and 20% in the textile production in U. S. The employment in textile mills in U. S also dropped from 478,000 to 239,000, while exports from Mexico to the U. S increased from $1. 26 billion to $3. 84 billion.
This proves that the critics of NAFTA had a point about the large job losses due to production moving from U. S to Mexico. The effect of NAFTA on U. S was also positive in some ways. For instance it reduced the prices of clothing in U. S since 1994 and this has benefited consumers. it has also increased the exports in U. S raw materials of cotton and yarn from $293 million to $ 1. 21 billion. The supporters of NAFTA argued that it has created trade, and both consumers and producers are benefitting from it and therefore the gains outweigh the losses.
What would the costs be? Looking back, NAFTA has affected the North American market in a positive way. The prices of clothes and goods have dropped significantly since 1994, which is a huge benefit for the consumers. However, the US textile industry, in pursuit of efficiency and lower expenses, has moved many of its facilities in Mexico, leaving many domestic workers without a job. In theory, loss of domestic jobs is always a consequence of such trade agreements, but in the case of the US textile industry, the scale of people losing their jobs was quite high.
The Business plan on Estimating Department Costs Job Production
Pre-amble Custometal Pty Ltd has been trading since 1992 under a couple of different names before becoming a proprietorship in 1998. Since its conception in 1992 it has been with the same owner and trades today as a sole proprietorship. Custometal's customers consist of the construction industry across Melbourne. Custometal is what is known in the industry as a metal work sub-contractor, with our ...
Of course, the US could have imposed some protectionism measures to ensure the loss of job positions is not so large, subsidies for example, but those actions defeat the purpose of NAFTA. Even though it would help slightly the US textile industries, the companies themselves would prefer to go to Mexico where prices are cheaper and wages are lower. Thus, protection measures would be too costly and with dubious benefits. Currently, the consumers contribute from NAFTA the most and protectionism would only diminish that and increase market prices.
