Abstract
World trade is ruled by a lot of free trade agreements. These agreements permit countries to trade more easily and without barriers or protectionisms. North American Free Trade Agreement (NAFTA) is one such example. This is a trilateral free trade deal between USA, Canada and Mexico. NAFTA was signed in January 1994. The NAFTA created a large free trade area which links 450 million people across three countries for an output reaching $17 trillion worth of goods and service.
A number of formal mathematical studies proved that the NAFTA would raise the GDP of the countries, for example, the U.S GDP , Mexico has grown by 5% annually and tripled the value of its exports.. Since 1993, trade among the NAFTA nations more than tripled from $297 billion to $930 billion. Each day, the three countries of NAFTA conduct nearly $2.4 billion in trilateral trade.
But despite the fact that there is a strong economic growth, there are numerous opposite opinions concerning the NAFTA benefits. Indeed, some viewpoints suggest that there is a loss regarding the manufacture with low-skilled labor. These assumptions are not totally senseless.
However, not all assumptions are based on valid or neutral arguments . For example, Robert Baldwin and Christopher Magee, in their paper titled "Is the trade policy for sale?", demonstrated that the vote of the NAFTA was dual between business sector, which it estimated will benefit by the agreement and on the other hand, the trade union, which anticipated strong pressure on the work conditions and general economic conditions, and dangerous competition which can lead the economy of low-skilled worker to a bad situation.
The paper showed that all these facts affected voting of NAFTA and that finally, the entities which voted were funded by the lobby. This would tend to suggest that the NAFTA was decided only to the benefit of the minority and be unfavorable to the majority. But these suppositions could not be proved by theoretical models. We will see all along the course of essay the different evidences and we will compare them.
