The Major Reason for the Establishment of NAFTA
The major reason for the establishment of NAFTA is to enhance trade within the North American countries such as Mexico, Canada and the United States of America. The establishment of such agreement is premised on the common ground o the foreign policy of the three countries. However, analysts are torn between review of the trade agreements under NAFTA or to continue with the implementation of NATA as it presently is. This paper presents a balanced opinion on why the United States should withdraw from NAFTA.
Abolishing NAFTA due to Manufacturing Job Loss in the United States
NAFTA ought to be abolished owing to the loss in the manufacturing jobs within the United States of America. Such is affirmed by the free low o cheap goods from Canada and Mexico and influx of cheap labor from Mexico. The automobile and textile industries are the most affected (Swanson " Granville, 2017). The influx of the cheap labor led to the decrease in the low-income jobs to the Americans, especially, jobs that did not require one to have a college degree. Such further led to the rise in the cases of underemployment. The foreign policy position of the United States in view of international trade has also been compromised. Notably, the environmental and labor standards that are met by the United States are not met with the other trade partners such as Mexico.
Benefits of NAFTA to American Consumers
However, NAFTA is good to the American consumers owing to the reducing in the prices of the basic commodities. Reduction in the purchasing price often leads to an increase in the purchasing power which is a positive indicator of economic growth. The foreign exchange that the United States has earned owing to the deal has posted a positive growth in the US economy.
Legal and Political Challenges of Withdrawing from NAFTA
Pulling out of NAFTA tends to pose legal and political challenges that could work against the United States. First, the stringiest conditions that a country has to adhere to prior to withdrawing from the agreement are enormous. Notably, the United States will need to notify Canada and Mexico in writing of the reasons or their withdrawal. Additionally, the American Congress will need to sit and review the legislation that had been set during the establishment of NAFTA (Lee, 2017). As it currently stands, the United States Congress has not taken any position on the issue and the agenda of the policy seems to only be an executive directive by President Trump with no existent legal back up.
Conclusion
In conclusion, NAFTA agreement tends to have a set of advantages and disadvantages in relation to the economic growth of the United States of America. However, the review of the trade agreement has to put into consideration the rules of international trade as provided by the World Trade Organization. The noblest initiative that ought to be undertaken is a review of the issues that the United States is raising in relation to the agreement and make necessary amendments where necessary. For example, one of the legitimate concerns that the United States is good from the US getting into Mexico being charged tariffs twice as more as the goods from Mexico into Mexico. The review ought to ensure that the local industries are protected and there is mutual growth in the economic activities in the three countries that are involved in NAFTA. The political and economic interests of the United States, Canada and Mexico also need to be taken into consideration during the review of NAFTA.
References
Lee, D. (2017). “Why Trump’s Threat to Withdraw from NAFTA is an empty one.” Los Angeles Times. Retrieved from http://www.latimes.com/business/la-fi-trump-nafta-withdraw-20170830-story.html
Swanson, A. " Granville, K. (2017). “What Would Happen if the U.S. Withdrew From Nafta.” The New York Times. Retrieved from https://www.nytimes.com/2017/10/12/business/economy/what-would-happen-if-the-us-withdrew-from-nafta.html
