The 1993 North American Free Trade Agreement (NAFTA) eased restrictions on commerce between the United States, Canada and Mexico by providing duty-free trade on multiple classes of goods and introducing new regulations to encourage cross-border corporate investment. Effects on the economies, companies and populations of all three NAFTA partners are significant. In this article, we'll outline both the positive and negative effects each NAFTA nation experiences.
Mexico
Chapter 11 investment guarantees, which give investing companies certain guarantees of profitability and immunity from regulatory change, encouraged huge U.S. investments in Mexico and Canada after 1994. According to one study, foreign direct investment induced by NAFTA increased 70% in Mexico in 1994 and was up by 435% a decade later.
While the impact of U.S. investment in Mexico has been substantial, it is less than some had anticipated. Much of the trade between the two countries involved exporting U.S. parts to maquiladoras, the Mexican factories that sprang up near the border to take advantage of cheap labor. Workers would assemble the parts into goods, such as appliances, television sets and auto assemblies, then re-export the assembled products to the U.S.
The 1993 North American Free Trade Agreement (NAFTA) eased restrictions on commerce between the United States, Canada and Mexico by providing duty-free trade on multiple classes of goods and introducing new regulations to encourage cross-border corporate investment. Effects on the economies, companies and populations of all three NAFTA partners are significant. In this article, we'll outline both the positive and negative effects each NAFTA nation experiences.MexicoChapter 11 investment guarantees, which give investing companies certain guarantees of profitability and immunity from regulatory change, encouraged huge U.S. investments in Mexico and Canada after 1994. According to one study, foreign direct investment induced by NAFTA increased 70% in Mexico in 1994 and was up by 435% a decade later.While the impact of U.S. investment in Mexico has been substantial, it is less than some had anticipated. Much of the trade between the two countries involved exporting U.S. parts to maquiladoras, the Mexican factories that sprang up near the border to take advantage of cheap labor. Workers would assemble the parts into goods, such as appliances, television sets and auto assemblies, then re-export the assembled products to the U.S.
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The 1993 North American Free Trade Agreement (NAFTA) eased restrictions on commerce between the United States, Canada and Mexico by providing duty-free trade on multiple classes of goods and introducing new regulations to encourage cross-border corporate investment. Effects on the economies, companies and populations of all three NAFTA partners are significant. In this article, we'll outline both the positive and negative effects each NAFTA nation experiences.
Mexico
Chapter 11 investment guarantees, which give investing companies certain guarantees of profitability and immunity from regulatory change, encouraged huge U.S. investments in Mexico and Canada after 1994. According to one study, foreign direct investment induced by NAFTA increased 70% in Mexico in 1994 and was up by 435% a decade later.
While the impact of U.S. investment in Mexico has been substantial, it is less than some had anticipated. Much of the trade between the two countries involved exporting U.S. parts to maquiladoras, the Mexican factories that sprang up near the border to take advantage of cheap labor. Workers would assemble the parts into goods, such as appliances, television sets and auto assemblies, then re-export the assembled products to the U.S.
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