NAFTA: North American Economic Bloc

What is naphtha? O NAPHTHA It is an economic bloc formed by the countries that make up North America: the United States, Mexico and Canada – in addition to Chile, from South America, only as an associate member. Its acronym refers to the terms of the agreement: North American Free Trade Agreement (North American Free Trade Agreement). Thus, as its name indicates, the bloc is limited to creating a free trade area, that is, with the reduction of taxes on products traded between member countries. There is, therefore, no type of permission regarding the displacement of people, as occurs in a common market, or in the sense of adopting a Common External Tariff, as occurs in customs unions.

The North American economic bloc was founded on January 1, 1994, after a series of agreements that began to be put together in the 1980s, when the The United States realized, through the example of the then European Common Market (today, the European Union) that the organization of international trade in regional agreements was more advantageous to

world capitalism than was thought. In addition, the North Americans saw a perspective of expanding their economic relations with Mexico, in the sense of directing the installation of factories and multinational companies in the country in its territory, in order to take advantage of cheap labor and minors taxes.

Another perspective with the founding of the NAFTA economic bloc, at the time, was the possible structuring proposed by the States United States of a free trade agreement that extended throughout the American continent, the FTAA (Free Trade Area of Americas). However, with the strengthening of the left in South America and the strong internal criticism of this proposal in the US, this idea is increasingly falling into oblivion.

Map of Integration Organizations

It should be noted, however, that those who initially proposed and insisted on the idea of ​​NAFTA were the Mexicans, who aimed to expand their exports and develop themselves industrially. On the part of the USA and Canada, the main interest regarding this bloc was to reduce the intense flow migration of the population of Mexico towards the north, which occurs in the search for jobs and better living conditions. life. The two countries understand that shifting part of the industrial production and expanding investments in the southern neighbor it is a way to make these migrations decrease, which still, in fact, did not generate the results expected. However, the Americans went so far as to build a 3140 km wall on the border between the two countries, with reinforced security in the sections considered to be the most problematic.

Thus, the main feature expressed in the framework of NAFTA is the great disparity between its countries. On the one hand, we have two developed economies (Canada and the USA) both in terms of economics and in terms of development. and an economy considered to be emerging (Mexico), with great financial dependence and limited progress in terms of Social. Thus, while the relationship between the USA and Mexico is restricted to the commercial field, the same cannot be said with regard to Canada, which is considered almost a “territorial extension” of the United States, given the broad political and diplomatic integration between the two countries.

The effects of NAFTA manifested themselves in different ways among its member countries. Imports and exports between them intensified rapidly and intensely, especially for Mexicans in relation to the other two countries. This fact has not become even greater because of the wide competition of Chinese products in the market. American, which demonstrates the little commitment of the United States to maintain a greater commitment to the bloc economy in question.

A consequence considered negative of the creation of NAFTA was the external competition, often seen as unfair, to products produced domestically in each of the three countries. With the reduction of customs tariffs, imported products often come to have a price equal or less than what is produced nationally, generating protests on the part of cooperatives and unions. In Mexico, the example of the issue of corn, which had its area of ​​cultivation reduced, is common, since the product is widely cultivated in the United States with greater technology, productivity and lower costs, while in Mexico it is produced by small communities that do so at higher costs and less technology advanced.

ADVERTISING

Within the United States and Canada, criticisms of NAFTA are common regarding what is called “job export”. With the agreement, many companies in the country migrated their factories - called "maquiladoras" because they only assemble their industrialized products with pieces from various parts of the world – to the Mexican territory, especially in border cities, like the municipality of Tijuana and many others. Thus, these companies have lower expenses with cheap Mexican labor, while fewer jobs are generated in the US and Canadian territories.

Although many disadvantages and criticisms have been pointed out to the economic bloc, it is undeniable that the commercial integration between its members has been strengthened, generating greater financial dynamics and productive. Likewise, many consider NAFTA one of the main factors responsible for Mexico's economic growth over the last few years. decades, making it one of the main countries among the so-called “emerging countries”, along with Brazil, China, India, Turkey and others.

By Rodolfo F. Alves Pena
Master in Geography