Good What Is NAFTA? Essay Example
Government reforms are evidently part of a progressive move. On the other hand it is also very true that reforms are directed to the economic development of a country. It is known that the entirety of a nation relies on the potential of its own resources including its citizens. As part of globalization, every nation’s worldwide is now capable of trading with other nations that is encompassed with mutual laws between them.
Moreover every trading law between countries is different. Tariffs and importation laws differ from each continent. More importantly these laws affect the growth of the country. Taxes give wealth to a government for a certain country. Thus, it is the main process by which a government can take money from its citizens legally and simultaneously use it for the country’s development. The allocation of this money depends on the present demand of the country’s situation (George, 2008).
With this paper, the main topic is the implementation of NAFTA in the 90’s and its diverse effect to Mexico politically and economically. The objectives of this study is that to properly define what is NAFTA ( North America Free Trade Agreement) and its significance to the political system of the countries involved on the agreement. Additionally, the economic status of Mexico is also a topic of interest.
When the economic status of Mexico in the 90’s is struggling, the formulation of a trade act is at hand with respect to neighboring countries. NAFTA or the North American Free Trade Agreement was born on January 1994 signed by 3 countries, the United States (Pres Bill Clinton), Mexico (Pres Carlos Salinas) and Canada (Prime Minister Jean Chretien).
The essential point of the trade act is to dispose of most taxes on items exchanged among the United States, Mexico, and Canada. The terms of the act required these trade tariffs to be eliminated in a gradual manner, and the last parts of the arrangement weren't completely executed until January 1, 2008. The arrangement cleared away import taxes in a few businesses: agribusiness was a noteworthy concentration, yet tariffs were likewise decreased on things like materials and vehicles (luxury cars). NAFTA additionally actualized licensed innovation securities (patents), created equal dispute systems, and set up local work and ecological shields, however a few faultfinders now campaign for stronger measures on this front. The discussion on this matter will proceed on the next section (Sergie, 2014).
Effects of NAFTA to Mexican Businesses and Politics
The trade pact was signed to promote the economic growth of the three countries involved. In the case of Mexico, it has boosted the number of exportation and the growth of GDP. The exports of Mexico have been quadrupled over time and on the other hand US has been sending twice the amount of products, this is mainly because of the diminishing taxes for products with regards to NAFTA. Moreover, the amount of exports has reached $400 million on the average from year 1993-2011(CRS, 2011). Evidently it has given an ample amount of business change to the country. Considering the growth of Mexico because of NAFTA it has become one of the most open economies in the world. Consequently, the average GDP of Mexico has increased by 40% on the average making the country the number 16th on terms of world global trade among 169 countries (O’Niel, 2011).
Even though the country has been performing well in terms of global trade as well as to privatization of companies it also lacks on the infrastructure. Evidently, the number of middle class families in the country is rapidly increasing thus the need of more infrastructure is a must. More importantly the country needs to increase its tax collection to support the growth in infrastructure as well as to give additional benefits to its citizens.
Democracy in Mexico with respect to NAFTA
It was known that before the existence of NAFTA (and even before it was completed) only one Party in Mexico dominates the presidential elections for about 10 years. Thus, it affects the economic status of the country because of a so called imperial presidency at that time. But on the other hand as time passes by the parties in the Mexican Government has learned to cooperate with each other bringing birth to democracy in the country.
In 2000, a new president from the PAN party has won the elections is one of the sign of a new democracy in the country. But the recent re-election of the dominant party PRI has given an unstable trust towards transparency. Moreover, the battle against trafficking of drugs, nonetheless, is demanding a political toll. And some known drug traffickers participate in election. Thus it caused the gaining of a toll in the public’s disappointment.
All in all, imposition of reforms in the government is really needed to achieve true democracy. Leaders must also be reminded that they are to serve their citizens and not to fool them with incompetent and self-centered imperialistic leadership.
Sergie, I., 2014. “NAFTA's Economic Impact.” Retrieved from: [http://www.cfr.org/trade/naftas-economic-impact/p15790]
O’Niel, S., 2011. “Mexico: Development and Democracy at a Crossroads.” Retrieved from: [http://www.cfr.org/mexico/mexico-development-democracy-crossroads/p24089]
CRS, (n.d). 2014. “US Trade with NAFTA partners: 1993-2012.” http://www.dataweb.usitc.gov
George, P., 2008“ Harvard International Review Publisher: Harvard International
Relations Council, Inc. Audience: Academic Format: Magazine/JournalSubject: Business; Economics; Law; Political science Copyright: COPYRIGHT 2008 Harvard International Relations Council, Inc. ISSN: 0739-1854.”