NAFTA Essay Example | Topics and Well Written Essays - 750 words

NAFTA - Essay Example An understanding of the economic effects and the benefits of this agreement is important for those personnel who are to be stationed in near shore positions located in Mexico or Canada. The first benefit for large American based companies who choose to deploy a part of their operations in Mexico or Canada is the economic advantage of lowered recruitment and Human Resource Cost for skilled and unskilled labor as compared to the economic market in America (Wikipedia, 2006). Additionally, American operations managers and executives of companies working in Mexico have the advantage of a higher standard of living in Mexico since the cost of living is lower (World Bank Group, 2001). After a decade of free trade with America, the Mexican economy like the Canadian economy has become very closely linked to the American economic system. NAFTA therefore is essential for Mexico’s continual growth and economic survival as a trillion dollar plus economy. With NAFTA the economy of Mexico has experienced booms but there is still some controversy about the application of the rules under NAFTA (Wikipedia, 2006). The opposition mostly comes from the economic crisis which Mexico went under soon after the signing of the treaty in 1995. However, the data collected by the World Bank and other economic agencies show that NAFTA has been mostly beneficial for the economy of Mexico since the poverty rated have gone down and economic improvement has resulted in greater job opportunities for the Mexican people. Real incomes and salaries have been on the rise and if the government continues to invest in education and other public projects for development Mexico could become one of the fastest growing economies of the world (World Bank Group, 2001). While the trade between the countries has been liberalized like the European Common Market, the national sovereignty of nations has not been changed and the laws for