Chapter 4, Problem 4.1EAA

To determine

The pros and cons of the NAFTA based on the research articles are discussed.

Answer to Problem 4.1EAA

The pros are that they protect the copyrights and patents legally for the countries in agreement making the market access also easy for them. The cons are such that it creates cheap labor which made many US people lose their jobs.

Explanation of Solution

Given:

The NAFTA which is known as the North American Free Trade Agreement forms the biggest trade free agreement between the countries like Canada, Mexico, and the United states.

The North American free trade agreement is a treaty that is been signed by Canada, Mexico and the United State. The purpose of NAFTA is to eradicate the most tariffs on trade between these countries that have signed the agreement to improve its economic condition. This NAFTA has influenced the engineering professions globally.

There are few pros and cons of the NAFTA. It was created to have low tariffs between the countries and it increased the economic state by the free trade. It ranks the second largest free trade market in the world. They have majorly impacted the large and small corporate companies of the member countries. The NAFTA allows the countries in agreement to have trade with the member countries easier and tariff free, which means goods can move easily with levying any extra tariff on it. The market access becomes easy for the trading countries and it gives a wider range of mobility for the professionals and the business people. The agreement helps to protect the copyrights and patents legally. The tariffs are remerged if there is a surgical strike on the domestic industry.

The cons of NAFTA may be such that it would make the manufacturing jobs move to labour markets that are cheap. This may lead to unemployment, inflation, and also it may relocate the facilities of the new production. The Central America and Asia locales have got jobs as the labors are cheap that makes the people of US lose jobs.

Conclusion:

There are many pros and cons of the NAFTA which has an impact on small and big corporates protecting the patents and copyrights legally and cons are that it creates an unemployment problem because of cheap labour.