Who Did Nafta Benefit The Most?

1533 words - 6 pages

After a lengthy negotiation of over 3 years, Canada, the United States, and Mexico reached an agreement on trilateral trade ― the North American Free Trade Agreement (Scaliger). Commonly referred to as NAFTA, it came into effect on the first day of 1994. Covering 450 million people and reaching $17 trillion in combined GDP, NAFTA proudly ranks the first among the world’s free trade agreements (USTR). It is usually seen as a remarkable success for the countless benefits it brings to the member countries. The goal of NAFTA was to promote closer trade relationships, eliminate trade barriers, and increase market opportunities among all three countries in the agreement. However, the United States has indeed benefited the most from NAFTA economically through expansion of American culture and access to natural and human resources.
First and foremost, the primary purpose of NAFTA is to promote economic growth. From this “money” point of view, free trade is mostly in favor of the U.S. One of the major factors that determines a country's economic strength is GDP. Surprisingly, NAFTA is estimated to boost American GDP by 0.5% a year, approximately $50 billion in 2000 (OSTR). Moreover, in 2003, 10 years after NAFTA was established, United States experienced the most significant economic growth ― 38%, compared to 30% in Canada and 31% in Mexico (USTR). Keep in mind that the U.S. had a larger base of growth. In addition to that, the U.S. has a giant manufacturing industry that consumed huge natural resources. The majority had to come from imports: Canada and Mexico are definitely the best exporters of resources. Almost one-third of U.S.'s imports come from these two NAFTA countries (Workman). The United States, as the largest importer in North America, surly benefited the most from NAFTA’s lower tariffs and transportation costs. To some extent, this also helped in reducing inflation rate in the U.S. Futhermore, United States has always had a trade surplus with Canada and Mexico in agricultural products (Amadeo). In other words, the U.S. sells more than it buys, a symbol of money flowing in. Large American companies are able to undersell Canadian and Mexican ones because NAFTA eliminated tariffs and relatively cheap U.S. agricultural products out-compete domestic ones (OSTR). From an economic perspective, the United States has a manufacturing-based economy that typically produces goods from raw materials, while Canada and Mexico have resource-based economies. They export resources to the U.S., and the latter manufactures goods out of the resources and sell them to make profits. Since manufacturing needs a lot of workers, NAFTA not only grants the United States incomes, but also provides job opportunities. All of these benefits in the other two countries are not as significant as they are in the U.S. Therefore, economically, the United States gained the most from NAFTA.
The United States is geographically located between Canada and Mexico. This advantage is...

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