The North American Free Trade Agreement (Nafta) Has Increased The Oil Price And Became Rich

On the other hand, Canada has long sold the United States 99% or more of its total oil exports: it did so even before the two countries concluded a free trade agreement in 1988. In other words, NAFTA does not appear to have done much to open up the U.S. market to Canadian crude oil. It was very open — Canadians were producing more. The U.S. Chamber of Commerce attributed to nafta that U.S. trade in goods and services with Canada and Mexico increased from $337 billion in 1993 to $1.2 trillion in 2011, while the AFL-CIO held the agreement responsible for sending 700,000 U.S. manufacturing jobs to Mexico at that time. [86] Not only are none of these countries a nafta member, but none of us have a free trade agreement with the United States. In fact, NAFTA has helped the U.S. auto sector compete with China, Hanson says. By contributing to the development of cross-border supply chains, NAFTA has reduced costs, increased productivity and improved U.S.

competitiveness. That meant losing a few jobs in the United States, since jobs were relocated to Mexico, he said, but without the pact, we could have lost even more. “Because Mexico is so close, you can have a regional industrial cluster where goods can come and go. Manufacturing in all three countries can be very integrated,” says Hanson. These links, which have given U.S. automakers an advantage over China, would be much more difficult to achieve without NAFTA tariff reductions and intellectual property protection. Edward Alden of CFR says the fear of trade deals has increased because wages have not kept pace with labour productivity, while income inequality has increased. To some extent, he says, trade agreements have accelerated the pace of these changes because they have “strengthened the globalization of the U.S. economy.” In 2008, Canadian exports to the United States and Mexico totaled $381.3 billion and imports $245.1 billion. [59] According to a 2004 paper by University of Toronto economist Daniel Trefler, NAFTA provided Canada with a significant net benefit in 2003, with long-term productivity increasing by up to 15 per cent in the sectors that experienced the largest tariff reductions. [60] While the decline in low-productivity jobs has reduced employment (up to 12 per cent of existing jobs), these job losses have lasted less than a decade; Overall, unemployment has declined in Canada since the legislation was passed. Trefler commented on the compromise, saying that the crucial trade policy issue was “how free trade can be implemented in an industrialized economy so that the long-term benefits and short-term adjustment costs borne by workers and others are recognized.” [61] Nafta has established the CANAMEX road transport corridor between Canada and Mexico, which has also been proposed for use by rail, pipeline and fibre optic telecommunications infrastructure.

It was a high-priority corridor under the U.S. Intermodal Surface Transportation Efficiency Act of 1991. Led by the automotive industry, the largest export category, Mexican manufacturers have a trade surplus of $58.8 billion for goods with the United States. Before NAFTA, there was a deficit. They also contributed to the growth of a small educated middle class: Mexico had about nine engineering graduates per 10,000 people in 2015, compared to seven in the United States.