What’s the effect of NAFTA on employment in the United States? essay sample
Posted on June 22, 2017
The activity and effects of the North American Free Trade Agreement on the US economy is a point for disputes. The agreement about conducting a trilateral trade was signed between Canada, Mexico, and the United States in 1994. NAFTA aimed at overcoming barriers to trade and investment in the member countries. Since the moment of implementation, tariffs on the US and Mexico’s export were partially eliminated. The impact of NAFTA on the American employees is an especially uncertain issue.
According to the report issued by the Congressional Research Service in 2015, NAFTA neither caused a massive loss of jobs nor involved a huge economic gain for the US. Researchers admitted that the trade with the Canada and Mexico makes up a small part of the US GDP that is why no dramatic change could possibly happen. The situation with employment, however, is more controversial.
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Opponents of the trade agreement claim that trade deficit grew between the member countries which resulted in the displacement of jobs. The increased import undermined the domestic production of goods. The bargaining power of the American employees decreased as well. The labor force ended up having fewer rights and lower salaries. Companies had the ability to outsource their production to another country that had even cheaper labor force than the US did.
The late nineties brought some economic growth which turned into the creation of more jobs. Despite critics of NAFTA claim that the upheaval was stimulated by the technological growth, new jobs is a fact.
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