NAFTA: Analyzing Praise, Controversy, and Economic Impact After 20 Years Research Paper

Introduction

The story in the article “After 20 Years, NAFTA Draws Broad Spectrum of Praise and Controversy” covers the different opinions about the North American Free Trade Agreement (NAFTA). According to Aguilar (2012), the United States, Mexico, and Canada have supporters and opponents of this pact, which has eliminated trade tariffs among these countries. As a result, NAFTA has contributed to increasing jobs and gross domestic product (GDP) growth for all nations (Aguilar, 2012). However, some advocates state that NAFTA has led to a decreasing workforce in the US, poor oversight, and immigration of Mexican workers to the US (Aguilar, 2012). As a result, the views on the impacts of NAFTA differ, depending on the focus of advocacy groups.

Application of Free Trade Theory

The article demonstrates how the theory of free trade applies to the real world. Here, the benefits of international exchange lie in the growing surplus for importers and exporters (Mankiw, 2020). For instance, Mexico benefits by increasing its exports and selling more products, while the US achieves better prices due to imports (Mankiw, 2020). Winners and losers in the participating country are producers and consumers, and the social and business issues make free trade controversial.

Customers in the US are winners as they purchase items at lower prices than they would before trade agreements. At the same time, prices have increased for Mexican consumers to the world level, making them losers (Mankiw, 2020). Similarly, US manufacturers suffer from decreased domestic supply, and Mexican farmers get more jobs and profits. Before NAFTA, tariffs could aid consumers in Mexico and producers in the US as they reduced demand for foreign products but would be detrimental to other individuals and companies.

Conclusion

In conclusion, the article describes the implementation of international trade without tariffs and how it creates many economic advantages. Some drawbacks exist for consumers in countries that export goods and businesses in nations that import products. Their counterparts – customers in importing states and producers in exporting countries – are the winners in this situation. Tariffs could help restrict trade, but their overall effect is negative.

References

Aguilar, J. (2012). After 20 years, NAFTA draws broad spectrum of praise and controversy. The Texas Tribune. Web.

Mankiw, N. G. (2020). Principles of economics (9^th ed.). Cengage Learning.