NAFTA
Learning Goals
• Explain NAFTA and assess its impact on the
Canadian economy.
• Explain NAFTA and assess its impact on
Canadian stakeholders.
• Explain the Organization for Economic
Cooperation and Development.
• Explain the costs and benefits of both
organizations
• Explain free international trade.
NAFTA
In January 1994, the United States, Mexico
and Canada entered into the North American
Free Trade Agreement (NAFTA), creating the
largest free trade area and richest market in
the world.
NAFTA
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1980 President of US. Ronald Reagan put forward ideas of NAFTA.
1985 The NAFTA idea get started.
1985, President of Canada Briexclusive Mulroney emphasized the idea.
Later 1987-1988, Canada and US. Signed agreement. (NAFTA)
1989, January, the North America Free Trade Agreement came into effect.
NAFTA (impact on the Canadian economy)
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Reduce tariff for each other
Remove restriction of import
Stick with single transformation rule
Government Procurement Agreement
Encouragement of investment
Expand mutual financial services
Develop each other’s free shipping
Encouragement and protection of intellectual
property
• Consult DSB (dispute settlement mechanism)
NAFTA
• More exports profit
• Increasing in investment
• Growth in economy
NAFTA
• Social problems
• Economy problems
• Decrease the incomes
• Environment problems
Group Discussion
• Do you think the US is using the NAFTA
attempt to control the whole North America
(Including Canada)?
• Please give two reasons. (Either yes or no)
NAFTA (impact on Canadian stakeholders)
• Primary stakeholders: Customers, Suppliers,
Employees, Competitors, Labour Unions
• Secondary Stakeholders: Political Parties,
NGOs, Educational Institutions, Community,
The Media
NAFTA
• Higher-paying jobs
• Market competition grow
• Improve choices for consumers
• Better raw materials, talent, capital and technology
NAFTA
• The wage gap
• Lost of jobs (Mexico)
• Pollution increased (Financial; economic growth)
• Little health protection, long work hours
Group Discussion
• We can tell NAFTA is the richest area, the
three countries did cooperation works to
make profit, and they have a good result.
• Question: Can you tell us one macrocosmic
benefit?
Organization for Economic Cooperation and Development
• OECD
• Established in 1961 (Paris, France)
• Thirty member countries (including Canada)
• Getting its member countries to work together
OECD
• Mission:
– Promote economic growth
– Expand employment
– Improve the standard of living
– Sustain financial stability
– Help countries’ economic development
– Enhance world trade
OECD
• OECD's work is based on
continued monitoring of
events in member
countries as well as
outside OECD area, and
includes regular
projections of short and
medium-term economic
developments.
Benefits
• Provide platform to compare policy experiences
• Seek answers to common problems
• Identify good practices and co-ordinate domestic
and international policies of its member countries
Costs
• Risks
• Limited development space
• Various policy areas interaction
Free International Trade
• Free trade is the process of trading goods,
services, and labor freely between different
countries without restrictions or having to pay
additional import and export costs. Although
there may be risks for consumers and countries
struggling to make profit from their goods, there
are some advantages.
Group Discussion
• If you are the top of the OECD, what will
you do to lower the risks and improve the
whole system?
Bibliography
• http://baike.baidu.com/view/191430.htm?fromId=9
2392
• http://baike.baidu.com/view/1061203.htm
• https://en.wikipedia.org/wiki/Organisation_for_Eco
nomic_Co-operation_and_Development
• http://www.oecd.org/about/whatwedoandhow/
• http://elenatauler.hubpages.com/hub/3-PositiveEffects-of-Having-Free-International-Trade