Nafta Case Study

The marketing environment is constantly changing, posing new solutions and creating new problems every day for consumers and marketers alike. The North American Free Trade Agreement is no exception to this trend. (NAFTANOW.ORG, 2010) NAFTA was signed separately by the leaders of the three countries, President Bill Clinton (US), President Carlos Salinas de Gortari (Mexico) and Prime Minister Brian Mulroney (Canada) on December 17, 1992 and went into effect on January 1, 1994 to create a trilateral rules-based trade block in North America. All tariffs between the three countries were eliminated with the final one to go on January 1st, 2008. (G.Burns, 2014) With 450 million people producing $17 trillion worth of goods and services, the trade bloc is the largest in the world. (Office of the United States Trade Representative, 2016) The agreement has been unprecedented in its uniform rules to cover such a vast area and volume of trade.

Despite some controversy, there are numerous advantages to the NAFTA agreement being in place. Elimination of the tariff made it easier for consumers to purchase goods between the three countries and therefore increased trade between the countries. (Burfisher, Robinson, & Karen, 2010) Wages increased across all three countries; although changes in wages to a specific factor can be difficult to measure, research shows that wages increased in the US by 0.17%, in Canada by 0.96%, and in Mexico by 1.3%. NAFTA also created jobs for US workers and the increased trade between the countries supports about 5 million US jobs. (2) Of course with any agreement spanning three countries under the same laws there will be some downfalls and less desired outcomes as well. Mexican workers have benefited less than expected from the free trade. Instead of creating quality lives with decent pay, Mexican labor has been cheap and provides a poor quality of life for workers. (Burfisher, Robinson, & Karen, 2010) Also, NAFTA lifted tariffs, but not regulations. Due to the political and regulatory environment, even without tariffs, there are still plenty of government-imposed barriers to trade. Laursen (2010)Some believe that NAFTA is more of an investment agreement than anything else in that, “Its core provisions grant foreign investors a remarkable set of new rights and privileges that promote relocation abroad of factories and jobs and the privatization and deregulation of essential services, such as water, energy and health care.” Iamratanakul (2015) NAFTA affected many different aspects between the three countries’ macro-environmental marketing place.

The NAFTA concept seems to be on the right route in a macro sense, but it will need refinement over the years to satisfy the growing needs on a micro level to ensure a stable marketing environment between the three countries of the United States, Mexico and Canada.

Bibliography

1. Burfisher, M. E., Robinson, & Karen. (2010). The Impact of NAFTA on the US. The Impact of NAFTA on the US, 125-144.
2. G.Burns, M. (2014). Port Management and Operations. New York: CRC Press.
3. Iamratanakul, S. (2015). MODELING THE MACRO- ENVIRONMENTAL FACTORS OF INTERNATIONAL DISTRIBUTION. MODELING THE MACRO- ENVIRONMENTAL FACTORS OF INTERNATIONAL DISTRIBUTION, 625-631.
4. Laursen, F. (2010). Comparative Regional Integration . In F. Laursen, Comparative Regional Integration (p. 283). England: Ashgate Publishing Limited.
5. NAFTANOW.ORG. (2010). Retrieved from NAFTANOW.ORG Web Site: http://www.naftanow.org/
6. Office of the United States Trade Representative. (2016). Retrieved from USTR Government Web SIte: https://ustr.gov