EU + NAFTA - trade agreements

How many countries does it consist of and when did it form EU

28 countries that operates as cohesive bloc and began in 1951

What are the advantages? EU

• tax free trading keeps costs down

• Free movement of people creates education and employment opportunities, however can create brain drain

• Reduces conflict

• Common currency in euro zone makes travel easier

What are disadvantages EU

• to limit power, wealthier countries are forced to give some money to struggling countries

• Serves overall EU interests not individual countries

• Takes power from governments because their decisions can be overturned

• Traps countries and is difficult to leave (EU)

What is NAFTA, when did it establish

North Atlantic Free Trade Agreement is USA, Canada and Mexico, started in 1994

What are NAFTAs main aims?

• gradual elimination of trade barriers

• Promotion of economic competition between members

• Investment opportunities

• Improved cooperation

Advantages of NAFTA

• Trade has tripled between 1993 and 2007

• Manufacturing growth in US meant increased employment

• Mexico receives foreign investment, higher wages

• Increased sales from agriculture reduce emigration from Mexico

Disadvantages of NAFTA

• some Canadian food companies have closed due to lower cost US firms

• Some US firms have moved to Mexico so American jobs are lost

• Food surpluses from US and Canada may be dumped in Mexico which affects agricultural economy

• Maquiladoras keep wage rates down

• Mexico can be exploited due to natural resources and less stringent pollution laws