In the past two decades, the number of regional trade agreements has been on a sharp rise. Generally, a trade agreement refers to free trade among specified nations in a particular region (Hussain 14). One of the biggest regional free trade agreement is the North American Free Trade Agreement (NAFTA). This trade agreement was started on 1st January 1994 with the aim of linking Canada, the United States and Mexico in an accord that would see trade barriers in this region lifted. The regional agreement that was made between these three member nations has led to an enviable improvement in regard to trading relationship. In fact, according to the information from article Proposed Free Trade Agreements authored by Benjamin Niklas, trade in this region has increased by more than 250% since this trade agreement was implemented.
Nonetheless, NAFTA has also faced its fair share of challenges and obstacles all along. One of the major disadvantage is that NAFTA ultimately made it possible for most of the US manufacturers to move jobs to the lower-cost parts of Mexico, therefore, the few manufacturers that remained ended up lowering their wages and salaries so as to be able to compete in those industries (Scher 2013). In addition, a lot of US jobs were lost since labour is cheaper in Mexico thus making most of the manufacturers to shift from US.
In conclusion, it is evident that trade agreements have both disadvantages and disadvantages in equal shares. Some nations which were performing better might be observed to stagnate or derail in their performance while some weaker nations rapidly improving due to this agreement that lifts most of the trade barriers. In general, trade agreements are largely healthy and has promoted and increased trade and diplomatic relations among nations in different regions of the world.
Works Cited
Hussain, Imtiaz. Reevaluating NAFTA: Theory and Practice. Palgrave Macmillan, 2012.
Scher, Benjamin Niklas. Proposed Free Trade Agreements: Do Equality and Ideology
Matter?. Vol. 737. GRIN Verlag, 2013.
