How and Why to create a free trade zone in the Americas

United States of America has always positioned itself as the most major, not only in economic terms but also in other sectors and areas of life.Moreover, during the late 80s of last century began the disintegration of the Soviet Union, which greatly strengthened the position of the states.But in this issue, there are new players - unites Europe and Asia, which provoked the need for the formation of a certain economic bloc in North America to further protect its interests on the world stage.The optimal solution in this situation was the creation of an economic union such as the North American Free Trade Area, which includes the United States directly, as well as Mexico and Canada.However, this free trade area considered its participants with different goals entry.

aims of education

Naturally, the main purpose of the organization was the removal of all possible trade barriers on trade between the partner countries.It is worth noting that after the entry into force of an agreement with the January 1, 1994 were automatically dropped almost 50% of all pre-existing barriers.Thus other trade restrictions were removed gradually substantially over the next 14 years.In addition to this, if not the main, but the challenge facing the organization was opposition to the former socialist bloc, which was formed, including, and the free trade zone of the CIS.

In the above text, the concept of the organization is not associated with a certain interstate formation of a specific legal framework and by certain regulatory agencies.The free trade zone in the Americas had no idea originally intended to create a structure similar to the European Union (in this example can serve as a free trade zone CIS), the remaining lifetime of the exclusively intergovernmental economic agreement, nothing more.

benefits and disadvantages for the Member States

Given the fact that the North American Free Trade Area did not provide any whatsoever of barriers to trade, the Americans were able to buy goods from neighboring countries are often cheaper than domestically producedcountries.It would seem that a free trade zone prejudicial to the interests of local producers, but that in practice it turned out not nearly as much as US companies have a huge potential market access to the neighbors, which considerably increased the turnover, for example, with Mexico in just the first four years of existence, more than 2times.The downside are the two facts.The first - a leak of production, and consequently, and capital to Mexico, because there is initially lower environmental standards and, of course, cheaper labor.And the second - the influx of immigrants from all the same in Mexico with their culture and traditions, often going to the counter to American Protestant.

As for the Mexicans, the free trade area provided them with an excellent opportunity to enter the markets of the rest of the world, based on the authority and capacity of the United States.Again, thanks to these weighty arguments sharply increased inflow of foreign investment into the country, which has become a significant impetus for the development of the economy and allowed to refuse to implement a program of import substitution in those years.

Speaking of Canada, it should be noted that it is potentially in their economic opportunities between the US and Mexico.Thus, Canadians over the period of the agreement sought to consolidate it with Mexico to defend their interests against States who sometimes tried to hold certain decisions based on their capacity, but contrary to the view of other participating countries.