Problems with the North American Free Trade Agreement System

The North American Free Trade Agreement has been widely supported and opposed since its inception as a trade deal between Mexico, Canada and the United States. The problem arises when not enough information is known to support valid arguments for either side. People do not readily see the pros and cons, and so it can make the argument lopsided. You have to know the basics before you can enter into a debate on the topic.

There were agreements in place before the North American Free Trade Agreement. The Canada Free Trade Agreement is one such agreement, enacted between Canada and the United States to help eliminate the need for tariffs, taxation or strict rules governing imported items. However, in 2004 this agreement was nullified and NAFTA was put into place to include Mexico.

One of the main issues that people seem to have when it comes to NAFTA is the skilled trades losses. The deal resulted in lower quality merchandise and the under pricing of U.S. and Canadian materials. Many people will not pay $45.00 for a pair of jeans when they can get the same brand for $25.00. For free trade to actually work the traders must be on equal footing. There needs to be an even supply/demand for products that are within the same price range.

If the traders are not on equal footing as far as wages and quality goes, then this can result in a dramatic shift in the economy. Take for example the recent spat of industries being outsourced or relocating due to lower wages and labor laws in Mexico. If a manufacturer can cut his labor force by fifty percent and slash wages by seventy-five percent simply by outsourcing to another country such as Mexico, then the business is going to move.

This is the type of opposition that the North American Free Trade Agreement has faced. It is a real issue with American voters, as well as with Canadians, who have seen their jobs disappear to Mexico, along with the loss of their wages. It is not always the same quality but no one can argue with the price differences and that is something that must be dealt with if any trade deal is to work out to the benefit of all concerned.

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