How NAFTA benefits manufacturing and sales

Respond to this post 200 words:

How NAFTA benefits the manufacturing and sales of products by companies in the U.S.?  The United States entered into the North American Free Trade Agreement in 1994, which primarily affected only the United States, Canada, and Mexico. The goal of the agreement was to liberalize global trade in agriculture, textiles and automotive manufacturing (McBride, 2017). NAFTA restructured the North American trade industry by relocating labor industries from the US and Canada to Mexico because it gained an economy of scale in the labor industry. Devised by President George H.W. Bush, and signed into law by President Bill Clinton, NAFTA has remained the key doctrine for trade within the North American Border.  Originally, the deal was brokered to relocate jobs to Mexico, to improve the country’s infrastructure and economy by introducing Mexico into the worlds trade industry (McBride, 2017). Furthermore, an attempt to improve the work conditions in Mexico and to discourage illegal immigration was an added bonus. Mexico’s economy allowed the automotive, textile and agriculture industries to operate at lower production costs which caused lower costs for companies across the supply chain. In the first two decades, almost $1 trillion dollars was exchanged in the cross-border transactions in the foreign investment trade with Mexico (McBrided, 2017). This is money that further improved Mexico’s infrastructure, which resulted in more technological advancements for the industries that operated out of Mexico. How is this good for companies in the U.S.? This trade agreement does a great deal of business in Mexico, under the NAFTA agreement, free trade is liberalized to companies, with liberties to trade as desired. This often yields returns in lower production costs and in turn makes cars in the U.S., Canada, and Mexico, cheaper and easier to obtain.  How has NAFTA affected the U.S.?  Although critics argue that moving jobs to Mexico, takes jobs from the U.S., this medium also allows vehicles to be manufactured at a much lower rate, by removing certain labor practices and outsourcing them to a lower wage country. Keep in mind that this does not mean all vehicles, textiles, and agriculture products are manufactured in Mexico, only that some have been. To further elaborate, many vehicle parts are manufactured in Mexico, then subsequently shipped to the U.S. and assembled, this is the case with many American and Foreign headquartered automakers. One prime example of this is Toyota trucks. Toyota currently manufacturers all Toyota trucks in a plant here in San Antonio (ToyotaTexas, 2018).  References  McBride, J., Sergie, A. (2017). NAFTA’s Economic Impact. Retrieved from (Links to an external site.)  ToyotaTrucks. (2018). Toyota Trucks. Retrieved from

Don’t use plagiarized sources. Get Your Custom Essay on
How NAFTA benefits manufacturing and sales
Just from $10/Page

Order Essay

Leave a Comment