Effect of the North American Trade Agreement

Topic: DesignConstruction Engineering
Sample donated:
Last updated: September 11, 2019

Select one or more Mexican companies and report on the effect the North American Trade Agreement (NAFTA) has had on each company. Although you may choose your own print and online source(s), a business search engine that may prove useful is Business.com (www.business.com).

In your paper, consider the effect of the ability of the company to enter the United States and Canadian markets as well as the effect of increased competition from United States and Canadian companies. Provide references for the source(s) you consulted. Contact me at: [email protected] NAFTA??™s presence means that taxes, fees, and Tariffs are being considerably reduced or eliminated; this will impact greatly the commerce and the economy of Mexico via its firms and the North American ones. With the enactment of the NAFTA Mexico now has more potential to see Jobs growth because of the sales of raw materials and other products made at less than the US wages.According to Mexconnect.com in a article by Olaf Carrera entitled ???NAFTA at five??? made the following statement five years after the NAFTA went into effect; she reported that the three countries the US, Canada and Mexico have an increase in commerce by more than 70% around $300 billion US to $515 billion of Mexico two way trade with the US and Canada increased 80%.One of the established companies in Mexico called Maquiladora reports its sales and benefits after the NAFTA went into effect.

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They report that their import rose 135% between 1993 and 1998 from $21 billion to $ 51.44 billion; and the country??™s employment increased 82% from 541000 jobs to over 960.000 jobs in that same period.Maquiladora which products are electronics has now produced 13 million Televisions sets in Mexico between 1994 and 1999 where most are exported to the US according to Mexconnect.com.

And that production and exportation to the US have also benefited US companies since the tube in those televisions have been imported from the US.2- Maquiladora, will have to face some difficulties to enter or doing business in both countries at the same time. The company will face some obstacles and will have to brake them first before taking back business in the US and Canada. Some of the challenges will be: exchange rates, capital funds, cultural differences and language differences which may impact communication and negotiation plus the related. 3- In that same article of Olaf Carrera published in the Mexconnect.

com, web 8/17/10, competition has increased in Mexico from the US and Canada. The effects can be seen as the largest construction firm in Mexico has been seeing its products and services reduced after the entering of Reichmann, a construction company from the US. Furthermore, the same effect is being happening with Mexican companies??™ verses US and Canadian companies that established themselves in Mexico since after the NAFTA went into effect. Mexican companies like CIFRA verses Wal-Mart, Cuauhtemac-Moctezuma brewery and John Labatt in Canada and tobacco companies Morris verses Cigatam.Those companies established in Mexico since before the NAFTA came into effect, have seen their business going down because of the free trade that allows more competitors to enter the market and consequently weakening their business.References: Mexconnect.com (access July 2010)Business.com (access July 2010) Contact me at: [email protected]

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