NAFTA and MercosurWinners and Losers

Arthur SchembriDario Cacopardo

NAFTANorth American Free Trade Agreement

Comprehensive agreement dealing with international trade and Investment in North

America

Established since 1994 Members: Canada, Mexico and the US Total Population of 421million Biggest free trade area: $20 trillion in total

GDP Total NAFTA trade: $1.12 trillion

To eventually eliminate all trade barriers and make trading easier and cheaper

Encourage investment opportunities and job creation

Protect intellectual property rights of people from each participating country

Encourage international fair competition

Cooperation in areas of the Environment and Labour rights

Objectives

Still very much a controversial deal...

Substantial increases in market access and trilateral trade between NAFTA countries since 1994: 400% increase

Possibly explains the boom in economy

Large Increase in the Maquiladora manufacturing plants on the Mexican border: 85% increase in first five years

Effects

Who were the winners from this Agreement?

Corporations and Investors

Consumers looking for cheaper alternatives

Mexico – who saw its standards and economic conditions rise, whilst also being more competitive.

Canada sees high exports and large FDI

Job seekers – employment soared thanks to more exports and growth

Winners

US manufacturing industry declined

Mexican border towns couldn’t support worker influx

United States Trade Balance: Currently a deficit of$47billion (Feb 2016)

Mexican Farmers: Agriculture goods from US suddenly became cheaper

×Losers

MercosurSouthern Common Market

Founded in 1991 with the treaty of Asuncion A Common market of the south. A sub-

regional bloc within South America. One of the world’s leading economic blocs and its fifth-largest economy.

Access to almost 300 million people A combined GDP of nearly $3.5 trillion One of Latin America’s largest regional

integration projects

An economic and political agreement in South America to promote the free movement of goods,

services and people among member states. 

Members

To promote free-trade and the fluid movement of goods, people and currency ◦ (Unlike NAFTA they promote freedom of

movement of labour)

Has ambitions to become a common market along the lines of the European Union.

Objectives

In 2002, Mercosur members agreed to form a “free residence area”

A number of free-trade agreements (FTAs) with third parties, including Chile, Colombia, and Peru, as well as Israel and the Palestinian Authority

Negotiations for an FTA with the European Union began in 1995, were suspended in 2004. Although talks resumed in 2010, a deal has yet to be signed

The Common Market Council

The Common Market Group

The Trade Commission

Two others, ParlaSur and the Structural Convergence Fund, were developed later.

Decision making within Mercosur

Trade-Group exports: $400,505,145,800◦ APEC: $ 9,090,917,000◦ E.U: $ 5,816,730,000

Trade-Group imports: $359, 475,145,800◦ APEC: $9,035,047,000◦ E.U: $5,577,136,000

Services exports:$60,030,000,000◦ E. U: $2,191,220,000◦ APEC: $1,929,900,000

Services imports: $126,970,000,000◦ APEC: $1,962,240,000◦ E.U: $1,830,080,000

Trade within Mercosur in 2014

An associate member up to this date

It doesn’t want to jeopardise its trade relations with the United States

However it wants to encourage more trade amongst southern American countries

Chile’s Membership

Trading Partners

Who were the winners from this Agreement?

Members of Mercosur, given that it is a free-trade area.

According to Argentine economist Orlando Ferreres, Brazil is the only country that has benefitted from Mercosur.

Winners

The bloc's smaller members, Paraguay and Uruguay, complain of restricted access to markets in Argentina and Brazil

A common external tariff of 35%

The ideological fight between the countries holds the negotiations back, which pretty much explains why Mercosur seems to have advanced like two years in 25

Ferreres believes that Mercosur should follow the path of Chile

×Losers

http://www.theglobeandmail.com/opinion/free-trade-transformed-canadas-economy/article16124601/

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/24/AR2008032401562.html http://dollarsandsense.org/archives/2003/0103dollar.html http://www.investopedia.com/articles/economics/08/north-american-free-trade-agreement.asp http://www.cfr.org/trade/naftas-economic-impact/p15790 https://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement#Jobs http://www.slideshare.net/vijayrocks123/nafta-ppt http://www.investopedia.com/financial-edge/1212/pros-and-cons-of-nafta.aspx https://en.wikipedia.org/wiki/NAFTA%27s_effect_on_United_States_employment http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/nafta-alena/facts.asp

x?lang=eng

https://www.stratfor.com/weekly/nafta-and-future-canada-mexico-and-united-states https://en.wikipedia.org/wiki/Mercosur http://www.as-coa.org/articles/explainer-what-mercosur-0 http://thebrazilbusiness.com/article/mercosul-customs-advantages MERCOSUR - Advantages and Disadvantages from the Brazilian Perspective 1 Luis Felipe Maldaner*(

Hankuk University of Foreign Studies: http://www.ajlas.org/v2006/paper/2010vol23no102.pdf http://

en.mercopress.com/2012/08/07/mercosur-has-only-benefited-brazil-in-the-last-ten-years-with-a-surplus-of-36.8bn

References