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Nafta Advantages And Disadvantages

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					                                 Effects NAFTA and CAFTA Have         1




Effects NAFTA and CAFTA Have
         on America




                    Presented to: Dr. Mark Kroll

                        November 14, 2005

Prepared By: Christopher West, Christopher Wasson, and Sumit Bhatia
                                                                Effects NAFTA and CAFTA Have                         2



                                              Table of Contents

EXECUTIVE SUMMARY: .....................................................................................3
INTRODUCTION: .................................................................................................4
UNITED STATES AS AN ORGANIZATION: .......................................................4
DEFINITION OF AN ORGANIZATION:................................................................4
ORGANIZATIONS AND CORE COMPETENCIES: .............................................5
NAFTA DEFINED:................................................................................................7
ADVANTAGES OF NAFTA: ................................................................................9
FIGURE 1 .............................................................................................................9
DISADVANTAGES OF NAFTA:.........................................................................11
AN UNBIASED ANALYSIS:...............................................................................13
CAFTA DEFINED:..............................................................................................15
ADVANTAGES OF CAFTA: ..............................................................................16
DISADVANTAGES OF CAFTA:.........................................................................17
GROUP POSITION: ...........................................................................................20
CONCLUSION:...................................................................................................23
REFERENCES: ..................................................................................................24
                                            Effects NAFTA and CAFTA Have          3



                              Executive Summary:

      The North American Free Trade Agreement and the Central America Free

Trade Agreement are the first steps toward a free-trading global economy. The

United States government, as well as other governments involved in the

agreements, enacted these agreements because they believed the results would

yield an economy that has no trade limitation among them. There are people

who promote and people who discredit these trade agreements. Each group can

give valid reasons for their bias. However, neither side can nail down evidence

that provides conclusive information. The information gathered suggests that the

agreements are a step in the correct direction.
                                               Effects NAFTA and CAFTA Have         4




                                    Introduction:

       The North American Free Trade Agreement (NAFTA) and the Central

America Free Trade Agreement (CAFTA) have been the major topic of heated

debates over the past few years. Some wonder why the United States wants to

engage in such agreements, while others do not know which side of the debate

to join. This paper will bring these issues to light.


                        United States as an Organization:

       In order to help explain why the NAFTA and CAFTA agreements are

important to the United States, the U.S. is compared to a modern business

organization. First, the definition of an organization is defined. Second, the roles

of individuals and groups within an organization are defined and compared to

similar positions and roles within the US. Next, the concept of a core

competency is defined and related to the United States.


                          Definition of an Organization:

       There are several definitions for an organization. The resource based view

of an organization states an organization is a “resource based system

deliberately constructed to facilitate the activities of people seeking common

interests” (Pfeffer & Salanick, 1978). The agency based view of an organization

claims, “An organization is a legal fiction represented by a nexus of contractual

relationships between the management and the stakeholders of an organization”

(Jensen & Meckling, 1978). The political view of an organization states that
                                              Effects NAFTA and CAFTA Have           5



“Organizations are coalitions altering their purposes and domains to

accommodate new interests, sloughing off parts of themselves to avoid some

interests, and where necessary, becoming involved in activities far a field from

their stated central purposes” (Pfeffer & Salanick, 1978: 24). For simplistic

purposes, the political view of an organization will be used throughout this

document.

       An organization is made up of different groups as well as individuals. A

publicly traded organization is owned by the shareholders. The shareholders

vote on a board of directors. This board of directors selects the management of

the organization with the most influential person being the Chief Executive Officer

(CEO). There are also several other levels of management within the

organization that help facilitate the operations of the organization.

       The United States of America is a public organization that is made of US

citizens (shareholders), the Electoral College (board of directors), the President

(CEO), and the different levels of legislation (SBUs). Together these groups and

individuals work for the best interests of the shareholders (the US citizens). The

government acts as management over the rest of the country. It is the role of

management to make decisions that are for the benefit of the company and the

shareholders.


                    Organizations and Core Competencies:

       Hamel and Prahalad (1990: 82) describe a core competency as “the

collective learning of an organization, especially how to coordinate diverse
                                             Effects NAFTA and CAFTA Have            6



production skills and integrate multiple streams of technologies”. These core

competencies give organizations a sustainable competitive advantage, which

provides a super-normal return of profits.

       The internal environmental resources are what provide organizations with

their core competencies. For these resources to be considered a core

competency, they have to meet certain requirements. They must be valuable,

rare, have no substitutes, and be imperfectly imitable. If a resource does not

meet these requirements, it will not be considered a core competency (Hamel &

Prahalad, 1990).

       Some organizations have competitive advantages in one area, but need

further assistance in getting their product delivered. In order to achieve the

processes the organizations are not competitive in, the organizations will use

outsourcing. “Increasingly intense competition form world-wide manufactures

has led many U.S. firms to establish international production sharing operations

to improve their cost competitiveness” (Fawcett, 1995: 25). For instance, Nike

Corporation has a great core competency when it comes to designing and

marketing athletic shoes and apparel. However, it does not excel in

manufacturing those products. Therefore, Nike will outsource the manufacturing

process to other organizations. In the same way, the United States has the

advantages in certain areas, but needs to outsource other processes.

       Just as the definition of the organization states, an organization will slough

off the parts that they do not wish to be involved in. One of the areas the United
                                            Effects NAFTA and CAFTA Have          7



States does not excel in is the manufacturing of items for inexpensive costs. The

United States has often outsourced manufacturing jobs that were historically

done within the United States. For the outsourcing process to go smoothly, the

transportation of goods from one company to the next needs to be effective and

efficient. Trade barriers where complicating the transportation process for

companies that choose to outsource certain jobs to the surrounding countries.

The government needed a solution that would “eliminate barriers to trade in, and

facilitate the cross border movement of goods and services between the

territories of the barriers” (Duina, 2004).This has lead top management

(Presidents of the U.S.) to enter into agreements such as the North American

Free Trade Agreement and the Central America Free Trade Agreement.


                                NAFTA Defined:

      The North American Free Trade Agreement was passed by the U.S.

House of Representatives in November of 1993 and was implemented on

January 1, 1994 (Shahabuddin, 2003). NAFTA was designed to eliminate nearly

all tariffs between the North American countries of the United States, Canada,

and Mexico (Duina, 2004). In theory, nearly all tariffs between the U.S. and

Mexico are to be eliminated by 2008. By 1998, nearly all of the tariffs between

the U.S. and Canada were to be eliminated. NAFTA was also designed to

remove many of the non-tariff barriers, such as import licenses, that have helped

exclude U.S. goods from the other two markets, especially Mexico (Duina, 2004).
                                                 Effects NAFTA and CAFTA Have             8



         NAFTA was formed to ensure that investment will not be coerced by

restrictive government policies, that U.S. investors receive treatment equal to

domestic investors in Mexico and Canada (Duina, 2004). In addition, NAFTA’s

easing of cross-border services rules ensures that if U.S. companies do not wish

to invest in another country to provide their services, they do not have to (Duina,

2004).

         There are core objectives of the NAFTA agreement. These objectives are

listed below.

         (1)    Eliminate barriers to trade in, and facilitate the cross border

                movement of goods and services between the territories of the

                barriers.

         (2)    Promote conditions of fair competition in the free trade area.

         (3)    Increase substantially investment opportunities in their territory.

         (4)    Provide adequate and effective protection and enforcement of

                intellectual property rights in each party’s territory.

         (5)    Create effective procedures for the implementation and application

                of this agreement, and for its joint administration and the resolution

                of disputes.

         (6)    Establish a framework for further trilateral, regional and multilateral

                cooperation to expand and enhance the benefits of this agreement

                (Duina, 2004).
                                                                Effects NAFTA and CAFTA Have   9



                                     Advantages of NAFTA:

      There have been numerous advantages brought forward for NAFTA. In

the world of agriculture alone, NAFTA has removed all non-tariff hurdles between

the United States and Mexico and, in the process, has allowed U.S. agricultural

products to regain market share within Mexico (United States Department, 2001).

NAFTA has allowed the agricultural exports of United States farmers to Mexico to

nearly double (Office of the United States, 2001). Figure one helps to explain the

proportion of the agricultural growth. The first two years after NAFTA was

enacted saw little change in the exporting of agricultural products. However, as

time passed, the effects of NAFTA are more visible. After the year 2000, the

number of dollars from exports beings to rise more rapidly.


                                               Figure 1




                .S. gricultural E
               U A                         A A
                                 xports toN FT Partners
                   ave
                 H Increasedby $9.3 BillionSince 1993

                                             an a exico
                                            C ad M
                  $Billions
                    12

                     10

                      8

                      6

                      4

                      2

                      0
                              1993   1994    1997        2000     2003   2004
                                               SelectedYears
                                             Effects NAFTA and CAFTA Have          10



     Also noted from the implementation of NAFTA, is that overall trade between

the United States and Mexico has increased by 149 percent and that the

percentage of increase of trade between the United States and Canada has been

112 percent (United States Department, 2005). These statistics are just

beginning to scratch the surface of the economical change that has occurred

since the beginning of NAFTA.

         Other statistics have also stated that there is an improvement of trade

between the United States, Canada, and Mexico. Such statistics are that United

States exports to the other NAFTA countries have grown $116.3 billion over the

lifetime of the free trade agreement (Office of the United States, 2004). NAFTA

has not only benefited the United States in trade, but has also benefited Canada

and Mexico. These countries have improved trade amongst themselves over

$333.8 billion during the existence of the union (Office of the United States,

2004).

         Information regarding job growth would be important to note, since one of

the largest disadvantages to NAFTA was the fear of loosing jobs. During the

1990s, the manufacturing output for the United States increased by 44 % (Office

of the United States, 2003). Employment has also increased between 1993 and

2000 to include 20 million new jobs over this time period (Office of the United

States, 2003). One more important idea to note is that “more people lose their

jobs each year from labor strikes than from import competition” (Fitzgerald,
                                              Effects NAFTA and CAFTA Have         11



2001). This information is in quite stark contrast to the beliefs of groups that

have disagreed with NAFTA from the beginning.

         According to the advocates of NAFTA, an open market among countries

that will facilitate the exchange of goods and services across national boundaries

is the desired end result of NAFTA (Shahabuddin, 2003). In the free trade

economy, countries should produce and sell what they can cheaply and

competitively manufacture. In consequence, the standard of living of the

involved countries will be improved and sustained. Pro-NAFTA groups claim that

raising the standard of living in the countries involved will result in a higher

demand for the goods and services produced in the United States (Freedman,

2004). Proponents also claim that 25,000 jobs are created for every additional

billion dollars the U.S. exports. Over 150,000 new jobs associated with NAFTA

were reported during the last five years. According to supporters, these jobs

would not have been made possible if NAFTA was not in place (Shahabuddin,

2003).


                            Disadvantages of NAFTA:

         On the contrary, there are many people that believe that NAFTA has done

more harm that good for the United States. The biggest argument against

NAFTA is that this agreement will force jobs out of the United States to Mexico

where the cost of labor is much lower. One individual has stated that there has

been over 1 million jobs lost in the United States since the advent of NAFTA and

20,000 of these jobs were lost in the state of Tennessee alone (CAFTA will cost,
                                             Effects NAFTA and CAFTA Have          12



2005, July 26). Non-proponents believe the higher standard of living theory is

flawed. They believe that companies and government in Mexico do not intend to

help raise the standard of living. Instead, the companies will continue to pay low

wages, never attempting to abide by environmental laws in order to facilitate their

search for quick profits (Freedman, 2004). This group claims that many

production jobs will be lost due to relocation to Mexico. In addition, the jobs that

were not totally lost are predicted to pay significantly less in order to remain

competitive (Freedman, 2004). It is theorized that the American owned

manufacturing and processing corporations will not be able to remain

competitive, in terms of pricing, unless they reduce the costs of production

associated with labor.

       There are some disadvantages to moving to Mexico that many companies

have not thought about. These disadvantages have not been improved by the

passage of NAFTA as what was previously thought. Moving or creating

operations in Mexico requires more time and effort for American companies, a

process that has changed little since the beginning of NAFTA (Morrison, 2005

Aug/Sep). Another issue is that the Mexican infrastructure for transportation is

still in the beginning phases and this will cause a logistical nightmare for any

American company that has not properly implemented a flexible plan to have

operations in Mexico (Morrison, 2005 Aug/Sep). NAFTA has also not been a

cure-all for the economies of the three countries. The United States has

increased trade between both Canada and Mexico, but has become more
                                           Effects NAFTA and CAFTA Have          13



dependent on the Chinese and other Asian countries. This is due to the ability of

these countries to produce products that are competitive with the Mexican market

(Morrison, 2005 Aug/Sep). One could easily state that NAFTA has not been the

answer to all of the economical dreams for the United States when this

agreement first became law.


                              An Unbiased Analysis:

      To truly develop an idea of whether or not NAFTA is good for the United

States, a non-biased analysis must be conducted. This will allow a more

accurate reflection of the results created by NAFTA. To measure NAFTA’s

results, parameters for results must be taken into consideration.

      NAFTA was designed to create a better standard of living. Therefore, part

of NAFTA’s success should be based on whether living conditions have

improved or worsened. However, according to experts, not enough time has

passed to give credible evaluation of changes in the standard of living

(Shahabuddin, 2003).

      “Liberalization of trade among member countries is another measure of

the success of NAFTA” (Shahabuddin, 2003: 307). When a country exports its

goods and services, job opportunities are created. The more a country exports,

more jobs and opportunities will be available. On the other hand, when a country

imports goods and services, jobs will be sacrificed. Analyzing trade patterns will

be necessary to determine which countries are experiencing desired results.

This will involve studying trade patterns before and after the NAFTA enacted.
                                              Effects NAFTA and CAFTA Have           14



        Before NAFTA was enacted, Mexico was the third largest trading partner

of the United States. The balance of trade between the U.S. and Mexico jumped

back and forth over the years. During one three year stretch, Mexico would

realize an export surplus. Then the U.S. would realize an export surplus during

another three year stretch. However, the overall victory went to Mexico.

“Between 1987 and 1993, U.S. exports totaled 204 billion dollars, and imports

206 billion dollars; which resulted in a trade surplus of two billion dollars in favor

of Mexico” (Shahabuddin, 2003: 308). During this time, trade was already open

between the United States and Canada. “Before NAFTA, the trade deficit with

Canada hovered around 13 to 16 billion dollars per year” (Shahabuddin, 2003:

309). This trade relationship resulted in a surplus of 100 billion dollars in favor of

Canada. The relationship between Canada and Mexico was in favor of Mexico.

Canada experienced an 8.6 billion dollar trade deficit due to this relationship

(Shahabuddin, 2003). It is evident that Mexico and Canada were on the better

end of the trade relationships during this time.

       After NAFTA, the trade deficit of the U.S. more than doubled in its trading

with Mexico. The U.S. now had a 16 billion dollar deficit in 1995, unlike the 6

billion dollar deficit in 1987. Now the total trade deficit was 64 billion compared to

only 2 billion in the years before NAFTA (Shahabuddin, 2003). All imports and

exports increased for both nations. However, Mexico’s exports increased at a

much higher rate than its import. This is contributed to American companies
                                            Effects NAFTA and CAFTA Have            15



building factories in Mexico in order to manufacture products and then export

those products back to the United States (Shahabuddin, 2003).

      The fluctuations in trade between Canada and the U.S. were not very

noticeable. The total of imports from Canada increased 60 percent while exports

to Canada increased 52 percents. This is very similar to the trade relationship

before NAFTA ever came along (Shahabuddin, 2003).

      According to this information, Canada and Mexico should be realizing an

increase in the number of jobs and opportunities created. This should allow the

standard of living to improve dramatically, especially in Mexico. In future times,

this improvement in the standard of living is theorized to provide an increase in

demand for U.S. goods and services. However, this also means a reduction in

the manufacturing jobs within the United States.


                                 CAFTA Defined:

      “The Central America Free Trade Agreement (CAFTA) promotes trade

liberalization between the United States and five Central American countries:

Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua” (Washington

Office, 2005). CAFTA was barely passed in Congress, winning approval in the

Senate by ten votes and by only two votes in the House of Representatives

(Bainbridge, 2005 p. 1). This agreement was modeled after NAFTA and is said to

be a “stepping stone to the larger Free Trade Area of the Americas (FTAA) that

encompasses 34 economies” (Washington Office, 2005). The objectives of the

CAFTA agreement are very similar to those of NAFTA.
                                             Effects NAFTA and CAFTA Have           16



                               Advantages of CAFTA:

         There are numerous advantages associated with CAFTA. First of all, the

United States will gain a greater presence within these Central American

countries with the trade agreement. This agreement will “offer the United States

duty-free access to goods made in Central America and the Dominican Republic”

(CAFTA Will Cost, July 26, 2005). This will allow many American companies to

add more value to different parts of the value chain and most importantly cut

costs. The end effect of the agreement should be a smaller price tag for end

users. Also, the agreement is not expected to have any impact on the American

economy other than the textile and sugar producing industries (Thiruvengadam,

2005).

         One of the larger hopes of CAFTA is to stabilize a politically unstable area

such as Central America (Eizenstat, 2005). With this hope in mind, we are

looking at having strong allies to help in gaining “a level playing field” against the

Chinese and other countries (Diana, 2005).

         Overall, this agreement was in favor of the United States. The Central

American countries that are part of this deal had to concede on two of their larger

industries, the textile and sugar (King, 2005). There are many who question why

the United States would want to be a part of this agreement. In the countries that

are part of this FTA, the United States already has more significant market share

than any other country (Gordon, 2005). The main reason for such a FTA is the

movement to make China less of a player in the United States economy
                                            Effects NAFTA and CAFTA Have            17



(Eizenstat, 2005). Once the United States has the ability to blend in

economically with these Central American countries, the hope is that America will

become less dependent upon the Chinese.


                           Disadvantages of CAFTA:

      The main disadvantage, or in this case the fears, regarding CAFTA is the

fear of losing jobs (King, 2005). This is foreseen by different groups due to the

route that NAFTA has taken. In the 12 years that NAFTA has been in place,

there have been a total of 1 million jobs lost. (CAFTA Will Cost, July 26 2005).

CAFTA has many people in the textile and sugar industries worried about

reduction of jobs and operations. (Thiruvengadam, 2005; Moffat, 2005) There

has been a projection of “tens of thousands of textile jobs” being moved from

North Carolina to Central America (Moffat, 2005). The fear is that the trend of

NAFTA will continue and jobs will be lost to these Central American countries.

Another disadvantage is the loop holes within CATFA. One of the major points of

CAFTA was to have the United States less dependent on China and more

dependent on our neighbors, the Central America region. There are loop holes,

however, that allows Chinese goods, such as textile, to be bought by the

agreeing Central American countries and then sold to the American market

(Moffat, 2005). This causes a great deal of concern to anyone looking at this

agreement. Some would say that this even undermines the purpose of the

agreement.
                                           Effects NAFTA and CAFTA Have           18



      Other concerns come from the sugar industry, where many groups are

waiting to feel the effects from the CAFTA agreement. At this time, CAFTA

allows less than 2 % of the United States total consumption to be imported into

the United States from the CAFTA countries (Thiruvengadam, 2005). Other

disadvantages are that federal trade deficit will increase due to CAFTA (Diana,

2005). Diana (2005) also states that another side effect of CAFTA is that credit

will be harder to come by for companies that are moving operations to Central

America.

      The main complaint about the CAFTA agreement is the loss of jobs, which

is a strong argument that stands against the FTA. There are other groups that

are concerned that CAFTA will not improve already poor working conditions

within Central America (Global Exchange, 2005). These working conditions

would not be allowed in the United States. Therefore, the United States should

improve these working conditions through the CAFTA agreements. There were

three major groups that were strongly against this new free trade agreement:

textile producers, sugar companies and unions. (King, 2005). The labor unions

of the United States rallied against the agreement when it was first being

discussed. Organized labor in the U.S. used their magazines to warn members

about the “serious flaws” involved in the agreement. They claimed that their jobs

would be sent to foreign lands and the labor wage rates of the remaining workers

would be significantly reduced (Freedman, 2004). The overall perception by
                                            Effects NAFTA and CAFTA Have            19



groups outside of these three was that CAFTA was so minor to the American

economy and that there was no reason to be that worried about the agreement.

       As a shareholder, we do not want to hear negative publicity or loss of jobs

with regards to our organization. However, the bottom line with any company

and stakeholder is the performance of the organization. In this particular case,

the United States’ performance in the textile industry has proven to be declining

in the last few years. As shareholders, we should want the officers of the

organization to do what is right to improve the bottom line.

       As mentioned earlier, companies should focus on their core

competencies. American businesses have had rising costs and, unfortunately,

their competencies are running low in the textile and sugar industries. The hope

is that Central America can help with improving American business to become

more profitable. The truth is that most Americans will not feel the effect of the

CAFTA agreement and should stand to benefit more from the changes than to

lose anything. The other idea to consider is if CAFTA would have not been

passed, this would have gone against everything that the United States stands to

keep. The economy of the United States has always been focused on free-

enterprise and competition. If CAFTA would have been defeated, the US

economy would have stated that these ideas were no longer valid in our

economy today.
                                             Effects NAFTA and CAFTA Have           20




                                  Group Position:

       NAFTA and CAFTA have many advantages and disadvantages

associated with their existence. However there comes a time when one must

decide if these free trade agreements are indeed essential for the success of the

United States. At this time, the jury is still out on whether the U.S. is winning

from the laws passed with these two agreements. There were many

compromises that the United States had to agree with in order to have these

agreements to be accepted by other countries. However, the United States’

engagement in the free trade agreements with neighboring countries was the

correct decision.

       A prime example for this point deals with low cost products. The United

States cannot produce goods at many of the low prices that exist in the current

market places. China and other Asian countries have flooded markets with

products that are low in price for the American consumer. When an individual

walks into a store such as Wal-Mart to purchase goods, this individual does not

have the intent to purchase items that are vastly more expensive than the lower

costs goods. This is where American companies can not compete with foreign

companies. The cost structure for American companies is higher than

international firms due to employee wages and other costs. By agreeing into

NAFTA and CAFTA, American companies are leveling their playing field with

international companies and allowing themselves to begin moves to regaining
                                             Effects NAFTA and CAFTA Have            21



market share. In return for this lower cost, countries such as Mexico will benefit

with a growth of jobs that will in turn allow these individuals to buy goods from

American companies that were at one point in time too expensive to purchase.

       Another reason that engaging in free trade was important for the United

States is that the United States was able to be less reliant upon certain countries.

Porter (1985) states in his ideal external environment that there should be

numerous suppliers and by meeting this criterion, the organization will be less

dependent on just a few suppliers. This will allow the organization to be more of a

price setter than price taker. The United States has become more dependent on

goods from China and other Asian countries. NAFTA/CAFTA will give the

opportunity to the U.S. to diversify their suppliers and, in turn, be able to set

prices for these suppliers which will allow American companies to become more

competitive.

       Lastly, another reason that NAFTA/CAFTA is good for the United States is

that these agreements promote free enterprise. The idea of free enterprise is

what sets the U.S. different from other countries in the world. Free Enterprise for

economies usually does not work well with governments that are Socialistic

and/or Communistic in nature. This being the case, countries affected by

NAFTA/CAFTA will gravitate to more of a Democratic or Republic type of

government. Another plus is that these agreements will bring stability to areas

that are not the most politically stable at this current time. Overall, the United
                                              Effects NAFTA and CAFTA Have              22



States will have stronger ties with these countries while, at the same time, spread

more democratic ideals to the rest of the world.

       Not only will these countries benefit politically, but there will be a benefit

with competition as well. The companies will have the opportunity to have larger

buyers at a more beneficial price than before. This will lead to more American

companies desiring to do business with more North and Central American

companies. Overall, by the United States not embracing NAFTA and CAFTA, a

message could be taken that the U.S. is afraid of a challenge from countries that

are not on the same level (CAFTA’s Benefits, 2005). This is not the message

that American people and business want to send to countries that are perceived

to be weaker.

       Americans must embrace NAFTA and CAFTA in order to be successful in

the future. As an organization, the United States will benefit from these

agreements. There are some areas of concern that are brought to the table by

NAFTA and CAFTA, but these concerns are dwarfed by the positives that free

trade can bring to the United States. No one likes to see jobs lost, but if the

country would be on the same path before NAFTA/CAFTA, an argument could

have been made that more jobs could have been removed. In order for America

to survive, businesses must prosper. At this time, steps are being taken through

NAFTA and CAFTA to allow American business to prosper in an economy that is

becoming more global in nature.
                                            Effects NAFTA and CAFTA Have          23




                                   Conclusion:

       It is clear that the North American Free Trade Agreement and the Central

America Free Trade Agreement have various advantages and disadvantages.

Pro-NAFTA and CAFTA groups provide very convincing advantages. However,

the disadvantages provided by the other end of the spectrum are convincing as

well. It is very difficult to indefinitely determine whether or not these agreements

are beneficial to the United States economy or not. The short-run information is

not sufficient enough to make such a decision. However, the information

available does suggest that, perhaps, these agreements are in the right step to

developing a global economy that works more efficiently. A global economy that

works more efficiently will definitely be advantageous to the United States of

America.
                                          Effects NAFTA and CAFTA Have          24




                                 References:

Adkisson, R. & Peach, T. (2000, June). NAFTA and Economic Activity Along the
      U.S.-Mexico Border. Journal of Economic Issues, 34 (2) pp. 481-450.

Bainbridge, J. (2005, September 12). The Cost of Free Trade. The Gazette,
       Colorado Springs, Colo, p.1.

CAFTA’s Benefits (2005, July 27). Wall Street Journal, p. A12

CAFTA Will Cost Tennessee Jobs, Opponents Say. (2005, July 26).
     Chattanooga Times/Free Press, p.1.

Diana, T. (2005, October). CAFTA-DR: A Level Playing Field For All, Or Stacked
      Deck For A Few?. Business Credit, 170(9), pp. 53-55.

Duina, Francesco. (2004, August). Regional Market Building as a Social Process:
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Duran, C. (2003). NAFTA: Lessons from an Uneven Integration. International
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Edwards, H., Porter, T., & Roberge, I. (2004, September). Politics or Markets?
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     the EU. New Political Economy, 9 (3).

Eizenstat, S, & Marchick D. (2005, March 8). Trade Wins. Wall Street Journal, p.
      A1.

Fawcett, S., Smith, S. (1995). Logistics Measurement and Performance for
     United States-Mexican Operations Under NAFTA. Transportation Journal,
     34 (3), 25-34.

Fitzgerald, S. J. (2001, November 12). The Effects of NAFTA on Exports, Jobs,
       and the Environment: Myth vs. Reality. The Heritage Foundation.
       Retrieved November 12, 2005, from
       http://www.heritage.org/Research/TradeandForeignAid/BG1462.cfm

Freedman, E. (2004). Union Magazines’ Coverage of the NAFTA Controversy
     Before Congressional Approval. Journal of Labor Research, 25 (2).
                                          Effects NAFTA and CAFTA Have        25



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