region ppt

7/28/2019 Region Ppt

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NORTH AMERICAN FREETRADE AGGREMENT

NAFTA


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AN INTRODUCTION

Secretariats - Mexico City, Ottawa and Washington, D.C.

Official languages - English, French and Spanish Membership - Canada, Mexico, United States

Establishment - Formation1 January 1994

Area - Total21,783,850 km (1st)


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The North American Free Trade Agreement (NAFTA ) is a

trilateral trade bloc in North America created by the governments

of the United States, Canada, and Mexico.

The agreements were signed in December 1993 by the leaders of

the three countriesBrian Mulroney of Canada, Carlos Salinas

de Gortari of Mexico, and Bill Clinton of the United States but

did not come into effect until January 1, 1994.

In terms of combined purchasing power parity GDP of its members, as of

2007 the trade bloc is the largest in the world and second largest by

nominal GDP comparison.

It also is one of the most powerful, wide-reaching treaties in the world.


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NAFTA SUPPLEMENTS

The North American Free Trade Agreement (NAFTA) has two

supplements:-the North American Agreement on Environmental

Cooperation (NAAEC) and the North American Agreement

on Labour Cooperation (NAALC)

(NAAEC) was a response to environmentalists' concerns that

the United States would lower its standards if the three countries

did not achieve consistent environmental regulation.

(NAALC) supplements NAFTA and endeavors to create a

foundation for cooperation among the three countries for the

resolution of labour problems, as well as to promote greater

cooperation among trade unions and social organizations in orderto fight for improved labor conditions.


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Trade and Investment Effects

NAFTA is a broad agreement, but improved market access,

including tariff reductions on merchandise trade, was the major

U.S. goal.

After ten years, most tariffs have gone to zero, except for some

very sensitive (mostly agricultural) goods that have limited

protection for up to 15 years. Clearly, U.S.-Mexico trade and

investment have grown sharply over the past decade.


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EFFECTS OF NAFTA

BENEFITS

Benefits the importers by reduced or duty free goods.

No MPF from Canada for NAFTA goods

Can make the exporter more competitive then other non-

participating countries

200% increase in trade among the 3 countries.

Increase market access within each country.


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LIMITATIONS

It has negative impacts on farmers in Mexico who saw food pricesfall based on cheap imports from U.S. agribusiness

It has negative impacts on U.S. workers in manufacturing and

assembly industries who lost jobs.

Critics also argue that NAFTA has contributed to the rising levels

of inequality in both the U.S. and Mexico.

Some economists believe that NAFTA has not been enough (or

worked fast enough) to produce an economic convergence, nor to

substantially reduce poverty rates


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EUROPEAN UNION (EU) This was originally established as European Common

Market by the treaty of Rome in 1957, and came intooperation in 1959. The founder members of the community

were France, West Germany, Italy, Belgium, Netherlands and

Luxembourg. In 1973 UK joined the community. Today it is

known as EU, and comprises Belgium, Denmark, France,

Greece, Ireland, Italy, Netherlands, Portugal, Spain United

Kingdom, Germany, Luxembourg, Finland,

Austria and Sweden.The association has advanced to the

extent of removing most trade barriers and allowing free

movement of persons and goods within the union. They havealso established a European Parliament for which member

are selected from each country on

proportionate basis, and are given powers to legislate may

issues which are them ratified by the governments.


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They have a common currency which is the Euro

Objectives of EUThe main objectives of European Unions are as follows-

To eliminate trade barriers on member nations.

To assist member nations during the times of emergencies.

To develop cultural and social relations.

To promote free transfer of labour and capital among member

nations.

To bargain collectively with the non-members by means of

collective strength.

To impose common external barriers on non-members.


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Policies of European Union:

There are number of policies adopted by European Union.

These policies are as follows-

1. Common Agriculture Policy-The main aims of this policy is improving the agricultural

production and to improve the position of the EU formers. It

also aims to make available food products at reasonable

rates. It allows free movement of food products amongmember nations.

2. Common Fisheries Policy

It provides equal access to fishing areas to all nationals of

EU. It adopts common market standards for marineproducts.

3. Common Transport Policy-

It aims at integration of transport facilities of the entire

community. It monitors organization and control of transport


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4. Fiscal Policy-

It aims at unification of tax rates, and other fiscal

matters. It monitors common value added tax on

products in the member states.

5. Industrial Policy

It facilitates research and development among member

nations. It aims at improving internationalcompetitiveness of industries of EU member states.

6. Competition Policy-

It prohibits agreements which lead to prevention, or

restriction of competition within the EU. It aims topromote competition within the EU by restricting anti-

competitive practices.


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FISCAL

Fiscal is a word used to mean anything involving financial

matters such as government expenditure, revenues, ordebts. The word can be used in combination with such as

'fiscal agent', 'fiscal policy' and 'fiscal year'.

Fiscal policy is the use of govt spending and revenuecollections to influence the economy.

Monetary policy is the process by which the government,

central bank, or monetary authority of a country controls

supply and availability of money.


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Broadly speaking, fiscal policy is a part of general economic

policy of the government which is primarily concerned with

the budget receipts and expenditures of the government.

In short, fiscal policy refers to the Budgetary Policy. Thus,

the term fiscal policy embraces the tax and expenditure

policies of the government. Fiscal policy operates through

the control of government expenditures and tax receipts


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