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The Three Members Of The North American Free Trade Agreement (Nafta) Are

According to a 2012 study, trade with the United States and Mexico increased by only 11% with reduced NAFTA trade tariffs in Canada, compared to an increase of 41% for the United States and 118% for Mexico. [63]:3 In addition, the United States and Mexico benefited more from the tariff reduction component, with welfare increases of 0.08% and 1.31%, with Canada recording a decrease of 0.06%. [63]:4 Shortly after his election, U.S. President Donald Trump said he would begin renegotiating NAFTA terms to resolve the trade issues he had campaigned for. The leaders of Canada and Mexico have expressed their willingness to cooperate with the Trump administration. [129] Although he is vague about the exact terms he wants in a renegotiated NAFTA, Trump has threatened to withdraw from it if negotiations fail. [130] While Nafta has many advantages, there are issues that call into question the legitimacy of the regional experience in North America. Economically, NAFTA has been held responsible for “deindustrialization” in the United States, as manufacturing jobs have migrated to Mexico. In Mexico, NAFTA is blamed for the impoverishment of rural areas, with U.S. imports of cheap subsidized corn crowding out local producers. Further north in Canada, the main complaint is the cultural dominance of the United States and the loss of independent Canadian media companies. As with the freedom afforded by democracy, the costs and benefits are linked to regional cooperation. The loss of independence is not necessarily negative if it is replaced by a system of interdependence.

A regional institutional demand is now being generated by the problems of NAFTA, which require a solution for the people concerned. If regional democratic institutions do not emerge to address these problems, there is a risk of dependency and domination that yields undemocratic and unstable results. Some small businesses have been directly affected by NAFTA. In the past, large companies have always had an advantage over small ones, because large companies could afford to build and maintain offices and/or production sites in Mexico and avoid so many old trade restrictions on exports. In addition, NAFTA laws provided that U.S. service providers who wanted to do business in Mexico had to establish a physical presence there, which was simply too expensive for small businesses. Small businesses were stuck, they couldn`t afford to build, and they couldn`t afford export tariffs. NAFTA aligned the conditions of competition by allowing small businesses to export to Mexico at the same cost as large companies and removing the requirement that a company establish a physical presence in Mexico to do business there. The lifting of these restrictions has suddenly opened up huge new markets for small businesses that previously only operate in the United States. This was considered particularly important for small businesses that were producing goods or services that had matured in the United States…