Regional Trade and Trading Block Agreements essays

Regional Trade and Trading Block Agreements essays The North American Free Trade Agreement: The North American Free Trade Agreement (NAFTA) was signed into law in October of 1992, and went into effect on January 1st, 1994. This tripartite trading bloc of North American countries established tariff-free trade, while removing many of the barriers to cross-border investment, expanding the earlier Canada- US Free Trade Agreement, created in 1989.. With tariff eliminations and duty-free status of a variety of products from favored nation suppliers, NAFTA has created the worlds largest free trade areas (Fugate). Several benefits have been noted, especially for member nation, Mexico. The benefits accruing to Mexico from the agreement include growth in national output, falling unemployment rates, and increasing trade with the U.S. The benefits of the agreement to Mexico are also reflected in the rapid growth of the Mexican maquiladora industry (Fugate). However, it is not all positive news. As real wage increases take hold in Mexico, some maquiladoras are no longer able to operate cost effectively. As such, there has been a disturbing trend of moving low-wage jobs out of the country and to China. In addition, it is feared that NAFTA has increased trade between the member countries at the expense of other nations, concentrating wealth in both Mexico and the United States (North American). As such, other trading bloc agreements have become to form, to counter this economic loss. The European Union was created in 1992, by the Treaty on European Union, otherwise known as the Maastricht Treaty. The finalized treaty had slowly evolved, since 1951, and many relationships that had developed during that forty-year period, beginning with the European Coal and Steel Community, formed by Belgium, West Germany, Luxembourg, France, Italy, and the Netherlands. Unlike NAFTA, the EU not only removes trade barriers, but also involves a single ...