Nafta

Nafta NAFTA: Are We Better Off Because of It' By Nick Campolo, May 1998 The North American Free Trade Agreement was approved by the U.S. Congress, the U.S. Senate, and the Mexican Senate in November 1993. The Canadian government's approval followed shortly after in December 1993. This agreement called for a complete removal of trade barriers within 15 years. Many trade barriers have already been removed. There has been much debate among different interest groups and individuals as to what the overall effect of this agreement would be. Although the agreement includes the countries of the U.S., Canada, and Mexico, the major debate in the U.S. focuses on the issue of Trade with Mexico. For this reason, this paper focuses on that part of the agreement. First, it makes sense to discuss why the prediction was that we would all be better off with this trade pact than we were without it. Ricardo's Theory of Comparative Advantage predicts we would be better off with free trade as participants specialize in their areas of greater factor productivity's. The Heckscher Ohlin (HO) Theory agrees with this, and elaborates on it. The HO theory argued countries with different factor endowments could benefit from free trade. The environmental, trade, mexico, nafta, labor, ho, been, %, agreement, gains, workers, theory, mexican, made, assistance, predicted, should, nations, jobs, market, free, while, welfare, same, one, higher, capital, both, adjustment, world, policies, part, paid, large, increase, side