How does nafta help mexico

Related Articles. Mark Earley. Manuel Ochoa. Toby Spoon. Juan Arvilla. Alan Russell. Mexico and Canada are friendly countries. Other oil exporters, such as Venezuela and Iran, use oil as a political chess piece. For example, both started selling oil in currencies other than the petrodollar.

NAFTA lowered food prices in much the same way. It is the second-largest export destination for corn, soybeans, and oils.

Most cars made in North America now have parts sourced from all three countries. The increase in competitiveness allows the industry to fend off Japanese imports. Mexico exports more cars to the United States than Japan. Before the recession, Japan exported twice as many as Mexico.

The recession hit financial services hard. GDP is comprised of services, such as financial services and health care. NAFTA requires governments to publish all regulations, lowering the hidden costs of doing business. They designed the products domestically, then outsourced some portion of the process in Mexico.

They may not have been created at all. In , U. That boosted profits for U. NAFTA protected intellectual properties. It helped innovative businesses by discouraging pirating. It boosted FDI because companies know that international law will safeguard their rights. NAFTA reduced investors' risk by guaranteeing that they will have the same legal rights as local investors.

Through NAFTA, investors can make legal claims against the government if it nationalizes their industry or takes their property by eminent domain. NAFTA allowed firms in member countries to bid on all government contracts. That created a level-playing field for all companies within the agreement's borders. It cut government budget deficits by allowing more competition and lower-cost bids. The agreement was signed by Donald Trump on Jan. Canada's Parliament ratified it on Mar. The Trump administration wanted to lower the trade deficit between the United States and Mexico.

Bureau of Economic Analysis. World Bank. United States International Trade Commission. Accessed Nov. Congressional Research Service. Bureau of Transportation Statistics. The Latin American debt crisis was strongly tied to the high volatility in global oil prices. This allowed Mexico to diversify its export economy and shift away from oil significantly.

However, there has been tremendous growth in the export of manufactured goods including:. The close ties between the U. Maquiladoras specialize in assembling these goods. This way, they met the The increased demand for products manufactured in Mexico has created thousands of jobs across the manufacturing industry and in other sectors of the economy. In particular, it expands the protections for workers in Mexico, as well as provides new environmental impact guidelines.

With an increased impetus to build and manufacture goods in North America, the economic ties between the three USMCA nations are only getting stronger. Over companies have used NAPS to reach their goals of successfully manufacturing in Mexico to remain competitive in the global markets and achieve long-term success. This content has been reviewed for accuracy by Scott Stanley, an expert with over 15 years of experience in executive management, specifically for companies manufacturing in Mexico.

Skip to content. The Basics of Tariffs Tariffs are essentially taxes that a government imposes on imports and exports. Diversified Exports and Manufactured Goods The Latin American debt crisis was strongly tied to the high volatility in global oil prices.