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The Future of the Americas:
NAFTA and Beyond
James Luer
Jesse Card
Patrick Buss
Kristen Mess
NAFTA
• NAFTA was established Jan. 1, 1994
• One of the world's largest trading blocs
between Canada, Mexico, and the United
States.
• Accounting for the association of over 426
million people, and a total GDP earnings
of $11.4 trillion.
• This is mark is equivalent to 1/3 of the
world’s total GDP earnings.
NAFTA (Continued)
• With the elimination of all the restricted
tariff barriers, trade has risen immensely.
• Since 1993, total domestic trade has
increased from $289.3 billion to $623.1
billion over the 10 year span.
• The three countries conduct nearly $1.7
billion in tri-lateral trade every single day.
• Experts believe, all the remaining tariff
barriers should be eliminated by 2008.
Goals of NAFTA
• Contribute to the development and
expansion of world trade and foreign
investment.
• Create an expanded, more secure market for
the investment and trade of goods/services.
• The expansion and creation for far more
employment opportunities.
• Improve the working environment conditions.
• Help raise the overall standard of living.
History of NAFTA
• U.S.-Canada Free Trade Agreement
– Signed Jan. 2, 1988 by President Reagan and
Prime Minister Mulroney
• Discussion for a North American Free
Trade Agreement begin between President
George Bush, Sr. and President Salinas of
Mexico
History (Continued)
• On Aug. 20, 1990 President Salinas
expressed his enthusiasm to initiate trade
negotiations
• On Sept. 25, 1990 President Bush replied
with his intentions to begin trade with
Mexico
• The letter also included the desire of the
Canadian govt. to participate in the
agreement as well
History (Continued)
• On Aug. 12, 1992 President Bush
announced the completion of negotiations
for the NAFTA
• It would involve all three countries
• On Sept. 18 Bush notified the Senate on
his intent to enter into the NAFTA with
Canada and Mexico
• On Oct. 7, 1992 Bush, Salinas, and
Mulroney met in San Antonio, Texas to
discuss how to implement the NAFTA
History (Continued)
• The two presidents and the prime minister
signed the NAFTA on Dec. 17, 1992
• Upon President Clinton’s election he
added provisions to the agreement
• He then sent a letter on Sept. 28, 1993 to
Congress to vote on implementing NAFTA
before the remainder of the year
• That way the NAFTA could take effect on
the first of January in 1994
Canadian Benefits from
NAFTA
• Trade first began to grow in 1989, when the
Canada-U.S. Free Trade Agreement (FTA)
was established.
• From there came NAFTA in 1994, and
that’s when real results started coming
forth.
• Overall economic growth rose 30.9% over
the 10-year span.
• Is expected to keep increasing 3.8% per
year.
Canadian Imports and
Exports
• Canadian imports sent from the U.S. rose from
$87.8 billion to $145.3 billion from ‘93-’03.
• Canadian imports shipped from Mexico have
increased from $2.7 billion in ’93 to $8.7 billion
in ’03, a 227% increase over the 10 years.
• Canada’s exports have rose as well. 104%
total to both the U.S. and Mexico.
• The U.S. accounts for more than half of the
exports, and 40% of the total GDP.
Canada’s Agricultural
Market
• In 2004, agricultural trade totaled $21.1 billion,
resulting in a 112% increase from ’93.
• Agricultural imports from the U.S. have grown
from $5.3 billion in ’93 to $9.7 billion in ’04.
• Canada replaced Japan in 2002 as the number
one agricultural market for U.S. exports.
• In 2004, Canada set records for importing these
U.S. commodities: Fresh fruits/vegetables,
meat, poultry, rice, soybeans, eggs, and snack
foods.
Canadian Merchandising
Industry
• Canada’s merchandise exports have
expanded 250% since ‘89, totaling
$345.4 billion in ’02.
• Merchandise imports grew as well,
totaling $218.3 billion in 2002.
• A 150% increase from 1989, the
original year when trade began between
the countries.
Mexican Benefits from NAFTA
• NAFTA has helped Mexico’s overall
economic growth grow 30% over the last
decade.
• Analysts believe Mexico’s economy will
keep increasing by 4 - 4.5% per year.
• Overall country production has risen 55%
since the start of NAFTA.
Mexican Imports and
Exports
• Mexican imports from Canada and the U.S.
have doubled since implementing NAFTA.
• Mexican imports from the U.S. grew from
$46.5 billion in’93 to $105.4 billion in’03.
• Mexico exported $138 billion to the U.S. in
’03.
• Mexico exported $8.7 billion to Canada,
which is a 227% increase from the $2.7
billion in ’93.
Mexico’s Agricultural
Market
• Agricultural trade between Mexico and the
U.S. rose from $6.2 billion to $143 billion.
• Mexican agricultural imports have grown
from $3.6 billion in’93 to $7.9 billion in ’03.
• Then an additional $6 million in ’04.
• Mexico set U.S. records for importing: red
meats, processed fruits/vegetables,
poultry, wheat, rice, and dairy products.
Mexican Economy
• Areas w/ high levels of foreign trade and
investment are more exposed to success.
• Wages are 37% higher in these areas.
• Employment levels are incredibly higher.
• Migration levels are considerably lower in
these developed areas.
• Mexican tariff barriers lowered from 10%
to 2% over the ten year span.
U.S. Benefits from
NAFTA
• U.S. accounts for 88.4% of the NAFTA
GDP, an estimated total of $10.4 trillion.
• Economic growth of 38% over the last
decade.
• The destruction of the trade barriers
assures the U.S. of a very successful
future in the import/export market.
• Overall productivity rose 28%.
U.S. Imports and
Exports
• U.S. exports almost doubled to Canada
raising from $134 billion to $250 billion
• U.S. imports from Mexico totaled $138
billion.
• Mexico accounted for 11.6% of the U.S.
imports.
• U.S. imports from Canada increased
28% since 1991.
U.S.’s Agricultural
Market
• Agricultural trade rose 112% with
Canada, reaching $21.1 billion in ’04.
• It rose 149% with Mexico, totaling $15.8
billion in ’04.
• The U.S. agricultural market is expected
to keep growing 5.1% annually.
Maquiladoras
• Export assembly plants.
• Prevalent in Tijuana, Ciudad Juarez, and
Matamoros.
• There are over 3,000 maquiladoras, they
employ over 1 million Mexicans.
• Some only pay 50
Side Agreements
• The North American Agreement on Labor
Cooperation focuses on:
– Occupational safety and health
– Employment and job training
– Labor laws and workers’ rights and
productivity
• The North American Agreement on
Environmental Cooperation
– Requires each country to protect its
environment and the environment of one
another
Benefits to the Accounting
Profession
• More job opportunities for accountants due
to new clients.
• More responsibilities due to:
– New procedures, such as dispute settlements.
– Easier access into other countries.
– A considerable number of provisions of
varying complexities in the NAFTA document.
Temporary Entry for
Business Persons
In order to be eligible for entry, you must
prove your citizenship. There are four
groups who are allowed temporary entry:
• Business Visitors
• Traders or Investors
• Intra-Company Transferees
• Profesionals
Opponents Of NAFTA
• Two Groups
– Against NAFTA with evidence
– Against NAFTA without evidence
Against NAFTA without
Evidence
• http://www.stoptheftaa.org/
• http://www.thenewamerican.com/20years/
• http://freetradeaintfree.com/
Against NAFTA with
Evidence
• http://www.epi.org/
– http://www.epinet.org/content.cfm/briefingpap
ers_bp147
• Viewpoints:
–NAFTA promotes the loss of American
jobs because of lower wages.
–Cumulative American jobs lost equals
879,280.
“The Public Citizen” and
the “NAFTA at Ten” Series
• http://www.citizen.org/trade/
– http://www.citizen.org/documents/NAFTA_10_
mexico.pdf
• Destroyed 1.5 million farming jobs in Mexico
• High exports, low quality of life
• High population in maquiladora towns
– http://www.citizen.org/documents/NAFTA_10_
democracy.pdf
• Chapter 11 cases
• International Preemption theory and loss of
federalism
What Should You and I
think?
“The Devil can cite scripture for his purpose.”
William Shakespeare
The Merchant of Venice
• Do the wants and needs of the people of the
United States supersede the wants and needs of
everybody else in the world?
• Are the citizens of the United States willing to
make uneasy compromise for the best of the
world?
• Should the citizens of the United States be
willing to make that uneasy compromise?
Countries
of NAFTA
Dates &
Numbers
Key
Players
Misc.
The Three
Countries
$200of
NAFTA
$200
$200
$200
$400
$400
$400
$400
$600
$600
$600
$600
$800
$800
$800
$800
$1,000
$1,000
$1,000
$1,000
The Three
Countries of
NAFTA
Countries
of NAFTA
Dates &
Numbers
Key
Players
Misc.
$200
$200
$200
The #1 Market for
U.S. Agricultural
Exports
$400
$400
$400
$400
$600
$600
$600
$600
$800
$800
$800
$800
$1,000
$1,000
$1,000
$1,000
The #1 Market
for U.S.
Agricultural
Exports
Countries
of NAFTA
Dates &
Numbers
Key
Players
Misc.
$200
$200
$200
$400
$400
$400
Accounts for
88.4%
of the
$600
NAFTA GDP
$600
$600
$600
$800
$800
$800
$800
$1,000
$1,000
$1,000
$1,000
Accounts for
88.4% of the
NAFTA GDP
Countries
of NAFTA
Dates &
Numbers
Key
Players
Misc.
The Year
NAFTA
Went
$200
into Effect
$200
$200
$400
$400
$400
$600
$600
$600
$800
$800
$800
$800
$1,000
$1,000
$1,000
$1,000
The Year
NAFTA Went
into Effect
Countries
of NAFTA
Dates &
Numbers
Key
Players
Misc.
$200
$200
The Year the
Canada-U.S.
$400
FTA Went into
Effect
$400
$400
$600
$600
$600
$800
$800
$800
$800
$1,000
$1,000
$1,000
$1,000
The Year the
Canada-U.S.
FTA Went into
Effect
Countries
of NAFTA
Dates &
Numbers
Key
Players
Misc.
$200
$200
$400
$400
$600
$600
Mexican Export
$600
Assembly
Plants
$800
$800
$800
$800
$1,000
$1,000
$1,000
$1,000
Mexican Export
Assembly
Plants
Countries
of NAFTA
Dates &
Numbers
Key
Players
Misc.
$200
$200
$400
$400
$400
$600
$600
$800
$800
$800
This Group was
Established in 1993
to Monitor NAFTA
Negotiations
$1,000
$1,000
$1,000
$1,000
$800
This Group was
Established in 1993
to Monitor NAFTA
Negotiations
Countries
of NAFTA
Dates &
Numbers
Key
Players
The U.S. President
who Submitted the
Final Draft of NAFTA
to Congress in 1993
Misc.
$200
$200
$400
$400
$600
$600
$800
$800
$800
$1,000
$1,000
$1,000
$1,000
The U.S. President
who Submitted the
Final Draft of NAFTA
to Congress in 1993
Countries
of NAFTA
Dates &
Numbers
Key
Players
Misc.
$200
The U.S.
President who
Signed the
Canada-U.S. FTA
$400
$600
$600
$800
$800
$800
$1,000
$1,000
$1,000
$400
$1,000
The U.S.
President who
Signed the
Canada-U.S. FTA
Countries
of NAFTA
Dates &
Numbers
Key
Players
Misc.
$200
$400
$600
The Canadian
Prime Minister
who Signed the
Canada-U.S. FTA
$800
$800
$800
$1,000
$1,000
$1,000
$600
$1,000
The Canadian
Prime Minister
who Signed the
Canada-U.S. FTA
Countries
of NAFTA
Dates &
Numbers
Key
Players
Misc.
The Overriding
$200
Goal of NAFTA
$400
$600
$800
$800
$800
$1,000
$1,000
$1,000
$1,000
The Overriding
Goal of NAFTA
Countries
of NAFTA
Dates &
Numbers
Key
Players
Misc.
The Group
Formed to Control
NAFTA Labor
Issues
$400
$600
$800
$800
$800
$1,000
$1,000
$1,000
$1,000
The Group
Formed to
Control NAFTA
Labor Issues
Countries
of NAFTA
Dates &
Numbers
Key
Players
Misc.
$600
$800
$1,000
$800
$1,000
$800
$1,000
These Four Groups
are Allowed
Temporary Entry
Through NAFTA
$1,000
These Four Groups
are Allowed
Temporary Entry
Through NAFTA
Countries
of NAFTA
Dates &
Numbers
Key
Players
$600
2.3 Million New Jobs
Have Been Created in
this Country Since 1994
$800
$800
$800
$1,000
$1,000
$1,000
Misc.
2.3 Million New Jobs
Have Been Created in
this Country Since
1994
Countries
of NAFTA
Dates &
Numbers
Key
Players
$600
Experts Believe this
Country’s Economy
will Grow 4-4.5%
Annually
$1,000
$800
$800
$1,000
$1,000
Misc.
Experts Believe this
Country’s Economy
will Grow 4-4.5%
Annually
Countries
of NAFTA
Dates &
Numbers
Key
Players
The Overall
GDP
of NAFTA
$600
$800
$800
$1,000
$1,000
Misc.
The Overall
GDP of NAFTA
Countries
of NAFTA
Dates &
Numbers
Key
Players
The Combined
Population of
$800
the
NAFTA
Countries
$800
$1,000
$1,000
Misc.
The Combined
Population of
the NAFTA
Countries
Countries
of NAFTA
Dates &
Numbers
Key
Players
$800
The % of the U.S.
GDP that Canada
Accounts for
$1,000
$1,000
Misc.
The % of the
U.S. GDP that
Canada
Accounts
for
Countries
of NAFTA
Dates &
Numbers
Key
Players
The U.S. President
who Supported a
U.S. Mexican Free
Trade Agreement
$800
$1,000
Misc.
The U.S. President
who Supported a
U.S. Mexican Free
Trade Agreement
Countries
of NAFTA
Dates &
Numbers
Key
Players
The Mexican President
Supported a U.S.
Mexican Free Trade
$1,000
Agreement
Misc.
This Mexican
President Supported
a U.S. Mexican Free
Trade Agreement