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Regional Integration for and Against Articles MGT 448/Global Business Strategies June 28, 2011 Regional Integration for and Against Articles NAFTA (North American Free Trade Agreement) is a free trade agreement involving Mexico, Canada, and the United States. NAFTA is the most limited of the free trade unions. NAFTA is restricted to eliminating tariffs, quotas, and other trade impediment among Canada, Mexico, and the United States. NAFTA has advantages and disadvantages of regional integration, and also showing how it persons would favor, and be against it. Integration and agreements made will reduce tariffs barriers that are associated with trades of good, services, and the factors of produced goods between countries (Hill, 2009). Advantages Between the two countries Canada and the United States NAFTA has eliminated most of the tariffs, which are incorporated in the trades of the products. One of the main advantages is that it will provide a higher quality of goods, and services to consumers in all countries at a lower rate. In January 1994 NAFTA became the biggest trade bloc in the world in relation to GDP (Gross Domestic Product) all, while becoming a key force in escalating the agricultural trade between Canada and the U.S. Trades between Mexico, Canada, and the U.S. have gotten better throughout the life of the unification (Free Trade Bloc, n.d.). The advantage of integration regionally is that there are no imposed restrictions on the trade. This will allow countries to focus on the services and produced goods in a more efficient manner to drive down cost, which will boost the economy. The free trade without restrictions allows lowering of prices of goods, increases output of goods that are in demand by other countries, which will create jobs increased goods lower operating cost. Also with compiling resources with the neighboring country will allow expansion in an economic outlook, and also pursue political views from major corporations as everyone follows the trend to reduce cost and increase profit (Free Trade Bloc, n.d.). Disadvantages Regional integration involves sacrifices and losses. One or more nations may benefit from the move, but other nations may suffer as a result. Most nations considering integration biggest concern is national sovereignty. Concerns over national sovereignty occurs because close economic integration demands that countries give a degree of control over certain policy issues, such as economic, trade, and monetary policies (Hill, 2009). Another disadvantage that may plague the country from free trade is the higher cost domestic production is replaced by a less costly and more efficient operating facility, also this will bring a change in the supplier as well, as the lower priced vendors (external) will be replaced by higher marked suppliers. The U.S. is a highly developed with a superior developed infra structure, productivity ranking, and backed with an abundance of natural resources. U.S. trading partner Canada is adverse and developed economically and also relies on the natural resources it possesses. The Rankings for the U.S. is in the upper echelon and Canada is in the bottom tier last in the G8 (group of 8). GDP median for Canada a little over 29,000 and for America is well over the 36,000 mark resulting in the rankings as they are. In closing to this analysis of how NAFTA can affect both positively and negatively, it is for the countries that abide this agreement to remain vigilant in what is needed to maintain and uphold their end of the agreement. By committing to these agreements integration will impact both economies and world and globally as business levels increase to acceptable standards for the U.S. and Canada. This will translate into a good opportunity for expansion for opening doors for other trade agreements products decrease in price and efficiency rises to better than acceptable rates because of free trade agreements. As trades are always a scary task because of financial issues and personality conflicts negotiations will continue to affect how countries agree with one another because of conflicts in who will benefit more. Therefore nations will always explore and continue to improve on trade agreements as it will bring in return a better economic outlook and improving lifestyle through integration (Free Trade Bloc, n.d.). References Free Trade Bloc. (n.d.). Retrieved from http://faculty.valenciacollege.edu/tbyrnes.trade.htm Hill, C. W. (2009). International Business: Competing in the Global Marketplace (7th ed.). New York, NY: McGraw-Hill/Irwin.