O Naphtha is an economic bloc that emerged in 1994 that involves the three countries of North America – the United States, Canada and Mexico – in a free trade zone, with facilitated movement of goods, but without other characteristics that are present in other economic blocs, such as the Common External Tariff used by Mercosur and the free movement of people present in the Union European.
The main aspect regarding the characteristics of NAFTA member countries is the economic disparity existing between their economies and social structures. On the one hand, we have the United States, which is a highly developed country, with the largest economy on the planet, the greatest military arsenal and the greatest political force; but, on the other hand, we have two countries highly dependent on the US economy, Canada - which still presents itself as a developed country with advanced social structure – and Mexico, considered to be emerging and which is harmed by its enormous dependence on the Americans.
Next, we will check the role of each member country of NAFTA, as well as the effects of these agreements in each of these situations.
Canada and NAFTA
O Canada, as we have already emphasized, is considered a developed country, both from an economic point of view - with a GDP per capita over $52,000 in 2012 – and from a human development perspective – with an HDI of 0.902 in 2013, the eighth highest in the world. With regard to the country's participation in NAFTA, its action was aimed at expanding its market in relation to the United States.
Currently, around 80% of everything Canada exports goes to the US, with an emphasis on raw materials. Its main industrial areas are located in the south of its territory, in a clear direction to the US economy and consumer market. The dependency ratio of Canadians is so great that it is not uncommon to hear from economic analysts and even of the population that Canada is nothing more than a "colony" or "territorial extension" of the States United.
Mexico and NAFTA
O Mexico, in this sense, presents itself as the other side of that coin. With an equal dependence on the neighboring country, Mexicans do not enjoy the same economic conditions as Canadians, in addition to having more restrictions within the bloc both in the economy and in other themes, including the demographic.
According to some recent surveys, more than 70% of exports and almost 60% of Mexican imports are carried out with the United States. Despite the volume being positive, the balance of this trade is negative for the Mexicans, given that exports correspond to low-cost raw materials and imports are mostly state-of-the-art technological products, with high cost.
One of the most notable effects of Mexico's adherence to NAFTA is the migration of some US industries to the border regions between the two countries. Such migration is advantageous for such companies because, in Mexican territory, they find cheaper labor, easy access to raw materials, laws labor, environmental and loose inspections, in addition to a territorial proximity to the American consumer market, not increasing spending on transport. These industries are called “maquiladoras” because they only assemble the final product from parts brought from other locations.
On the right side, the city of Tijuana (Mexico); on the left, the US territory. This city receives several US industries
Despite the broad economic, territorial and political proximity between Mexico and the United States, there is a barrier with regard to the entry of Mexican immigrants into US territory. This is due to the high protectionism of the US towards the entry of these people, fearing that they will further saturate the country's labor market. Since 1994, the United States has built a high security wall between the two countries. it prevents, however, the entry of thousands of Mexicans into its territory in search of more jobs and income.
The United States and NAFTA
As we have already stated above, the USA they are the central point of NAFTA, acting as the bloc's main economy and generating a relationship of dependence with their neighbors. Therefore, the country's performance in this economic bloc is mainly aimed at increasing its exports and using a large existing consumer market. In addition, with NAFTA, the United States considerably reduced its costs with imports of raw materials and basic industrial products.
On the other hand, there is internal pressure in the US regarding NAFTA. The main issue is the apparent increase in unemployment in the country, which would be caused both by the financial economic crisis and the migration of national industries to Mexico and Canada. Many consider the US participation in the bloc to be problematic, even though all its member countries have complete freedom to negotiate unilaterally with other countries and economic blocs.
By Me. Rodolfo Alves Pena
Source: Brazil School - https://brasilescola.uol.com.br/geografia/paises-membros-nafta.htm