Please respond to the following two statements individually using the guidelines listed below with a minimum of two paragraphs and one reference each.
? Provides concrete examples from the readings to support postings
? Integrates prior readings in postings ? Integrates personal observations and knowledge in an accurate and highly
? Presents new observations
? Constructively responds to classmates postings
? Participates in all module discussions ? Posts are organized and information is presented in a logical sequence
? Word choice and sentence structure are suitable for graduate-level work
The NAFTA agreement (North American Free Trade Agreement) is a treaty passed in 1994 that allowed 2000 trucks from Mexico and the US to cross each others borders to deliver goods (Hill, 2013); however, there were differences between the US and Mexico that caused for provisions to be considered. Teamster believed that even though it would be less costly for road transportation to used Mexican trucking firms, it would cost many American truckers their jobs and that Mexican truck driver had poor safety records as well as did not adhere to the strict safety and environmental standards of the United States (Hill, 2013. p.312). Since then, there has been a constant struggle between Teamsters and the American court as well as Mexico placing tariffs on about 2.4 million goods shipped from the U.S and costing companies more than $2 billion (Copeland, 2011). The treaty was initially suspended by President Clinton in 1995 because of safety concerns and although in 2007 the Bush administration presented a pilot program that would allow a limited number of Mexican trucking companies to drive across US borders, funding was still cut off because of the same safety concerns sited by Congress. (Griswold, 2011).
Mexico benefits automatically with the increased use of their independent and less costly trucking company, which would create more jobs in their economy, however, they would have to adhere to US safety inspections and regulations placed on hours driven in the US. Mexican Secretary of the Economy Bruno Ferrari states that more than 70% of our bilateral trade, which is over $400 billion, moves across the border by truck and the agreement would help with competitive advantage in the global economy (Copeland, 2011. p.1). So continual trading with the US is detrimental to Mexicos overall economic levels and will increase revenue for the country.
There, however, are a few potential economic benefits that will benefit America when and if provisions in the NAFTA treaty are finalized. First, many supporters of the agreement believe that it will put an end to all tariffs placed by Mexico (Copeland, 2011) and will be relief for those states effected most such as California, Washington and New York (Hill, 2013). It also has the potential to create jobs to counteract jobs lost during the past 15 years because of the issues with the treaty and create more trade between the two countries (Copeland, 2011). The main issue that created issues for the US is that many believed that there were no legitimate safety concerns but the agenda was pushed by protectionism and prejudice because of stereotypes held by US truckers and protection against competition from Mexican truckers (Griswold, 2011 p.1). Griswold believes that the US failure to comply has cost of economy greatly and has tarnished Americas reputation as a good citizen of the global trading system (p.1). Hence, the American economy could benefit if provisions are met to pass the treaty which would help reconcile its image in the global trading industry and to make bring our own nation into compliance of regulations within a mutually beneficial agreement with Mexico.
Since then an agreement has been signed to resolve the 15 year dispute with the NAFTA agreement which will allow free trade provisions between both countries. Mexico has signed an agreement to drop half of the tariffs on 100 US products granted the US reinstate the pilot program for truck certification for Mexico (LaFranchi, 2011). There are still concerns raised by Teamster that has caused many debates, this treaty will be continually be a concern for both countries for a while.
Copeland, L (2011) Mexican Trucks To Haul Freight On U.S. Roads. Retrieved from http://usatoday30.usatoday.com/money/economy/2011-08-10-mexican-trucks-us-highways_n.htm
Griswold, D. (2011) The Pilot Program on NAFTA Long Haul Trucking Provisions. Cato Institute. Retrieved from http://www.cato.org/publications/congressional-testimony/pilot-program-nafta-longhaul-trucking-provisions
Hill, C.W. (2013) International Business; Competing in the Global Marketplace. 9th ed. New York, NY: McGraw-Hill Irwin.
LaFranchi, H. (2011) Landmark US-Mexico Trucking Agreement Resolves 15 Year Conflict. Retrieved from http://www.csmonitor.com/USA/Foreign-Policy/2011/0706/Landmark-US-Mexico-trucking-agreement-resolves-15-year-conflict
Under the 1994 agreement, the United States and Mexico were to allow trucks from each country to deliver goods to destinations inside the other country, provided the trucks and their drivers met all safety regulations mandated by the host government. According to Annex I of the agreement, licensed and qualified Mexican trucks were to be allowed to make deliveries in U.S. Border States by 1995 and throughout the U.S. by 2000; Mexico was to reciprocate (Griswald, 2011). In 1995, President Clinton unilaterally suspended implementation of the provisions, citing safety concerns due to the intense pressure from the Teamsters Union.
According to Griswald (2011), suspension of the pilot program in 2009 was based on protectionism and prejudice, not legitimate safety concerns. Even when the Teamsters union leaders talk about safety, their hidden agenda is to protect themselves from increased competition. Some members of congress were bent on thwarting full implementation of a successful trade agreement with Mexico, our third-largest trading partner. The real objection they have to Mexican trucks making deliveries to U.S. cities is not that they are unsafe but that those trucks are driven by Mexicans. In the eyes of too many members of Congress, driving while Mexican remains an unacceptable public hazard (Griswald, 2011).
Opening the border with Mexico will create more trade between the United States and Mexico, and therefore more profits for everyone. Trade between the United States and Mexico is extremely profitable and important. According to Richman (2009), between the signing of NAFTA in 1994 and 2004, trade between the two countries grew by 191%,and more than $250billion worth of goods moves between the countries annually.Richman (2009) further stated that by2000, trucks became the main transportation vehicle, moving about 75%of these goods over the border. That in April 2008alone, surface trade between the United States and Mexico totaled $25.5 billion, up 12.2% from April of 2007. U.S.carriers benefited while Mexican fleets currently control 80%of the cross-border business. Liberalizing truck transport presents a lucrative opportunity for U.S. carriers to expand their operations into Mexico, and to fulfill the needs of both the U.S.and the Mexican markets.
Opening the border between Mexico and United States have broader positive implications for organized labor. The Teamsters have the opportunity to build a strong labor alliance with their neighbors, thus improving labor conditions and strengthening organized labor throughout North America. This will lead to better working conditions for U.S.and Mexican truckers. Richman (2009) stressed that instead of focusing on whether Mexican truckers will drive down U.S.wages, the Teamsters should focus on ensuring that every trucker in North America receives a fair wage. Richman (2009) concluded that a larger Teamster-CANACAR alliance holds more weight at the bargaining table and be more effective against corporate interests pushing for further free trade initiatives that may create more competition in domestic markets.
Griswold, D. (2011, May 04). The Pilot Program on NAFTA Long-Haul Trucking Provisions
Hill, C. (2013). International business: Competing in the global marketplace. (9th ed.). New York, NY: Irwin/McGraw-Hill
Richman, E. (2009). The NAFTA Trucking Provisions and the Teamsters: Why They Need
Each Other. Retrieved from