Down The Shafta With Nafta Essay Research

9 September 2017

Down The Shafta With Nafta Essay, Research Paper

Down the SHAFTA with NAFTA


The North American Free Trade Agreement ( NAFTA ) is a regional trade treaty that calls for the riddance of all duties and trade barriers bing among Canada, Mexico, and the United States of America ( & # 8221 ; North Agreement & # 8221 ; 420 ) . Some duties disappeared instantly when NAFTA took consequence, while others will extinguish over a 15-year period. The treaty besides includes bilateral commissariats intended to decide sensitive issues between the spouses.

Supporters maintain that this regional integrating venture would take to benefits for North America much like those that accrued to the members of the European Community, because it would make a individual market of 370 million people bring forthing and devouring goods and services. For Canada, NAFTA extends the 1989 Canadian-American Free Trade Agreement and promises extra benefits for consumers, makers, and the agricultural sector. For Mexico, the understanding establishes an docket for continued advancement and farther economic reforms.

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For the United States, NAFTA is more equivocal, since it pits concerns against labour brotherhoods and skilled professionals against unskilled mill workers concerned about losing occupations to Mexican labourers if US companies decide to travel south. NAFTA opponents mention this possible loss of American occupations and the deficiency of equal environmental protections as sufficient cause to reject the understanding.

In response to these expostulations, US President Bill Clinton concluded several side-agreements to protect the environment and to forestall unjust competition from Mexican low-wage earners. The three states ratified the treaty in 1993, and it went into consequence January 1, 1994.

Five old ages after its debut, the North American Free Trade Agreement fails to bring forth its promised benefits. Even its supporters have been forced to admit that prosperity, occupations, and environmental killings have non materialized. These unrealized promises have crippled the North American Free Trade Agreement ; plenty so, many are naming NAFTA a failure.


The North American Free Trade Agreement calls for several benefits in cardinal service sectors. Expanded trade in fiscal services is one illustration. Due to NAFTA, Mexico has opened its fiscal services markets to US and Canadian Bankss and securities houses, which allows these new participants to set up entirely owned subordinates and engage in the same scope of operations as similar Mexican houses ( North American Perspectives 24 ) . Because transitional limitations will be phased out by January 1, 2000, Mexico s ability to put future restraints on foreign-owned houses will be limited. Other fiscal services, including leasing and consumer finance, have already established operations in Mexico and are non capable to any restrictions. In add-on, Mexicans and Canadians are guaranteed the right to buy fiscal services from houses in the United States.

Another long-run benefit from NAFTA is the new chances for insurance. NAFTA eliminates limitations on US ownership and proviso of services in the $ 3.5 billion Mexican Insurance Market ( 27 ) .

US and Canadian houses with bing joint ventures were permitted to obtain 100 per centum ownership by 1996 ; new entrants to the market could hold obtained a bulk interest in Mexican houses by 1998 and 100 per centum ownership by the twelvemonth 2000 ( 27 ) . New entrants may get down their entirely owned houses in Mexico instantly, capable to certain size restrictions in consequence until January 1, 2000 ( 27 ) . US insurance companies may sell lading insurance, and reinsurance on a cross-border footing in Mexico. They may besides sell life, wellness, and travel insurance to Mexican occupants who come to the United States.

NAFTA besides opens Mexico s market for international truck, coach, and inveigh conveyance. It besides locks in US entree to Canada s already unfastened transit market. Presently, over 90 per centum of US trade with Mexico is shipped by land ( 28 ) .

NAFTA besides provides US and Canadian charter and tour coach operators full and immediate entree to the cross-border market. Regular bus path companies gained full cross-border entree in 1996 ( 30 ) . US and Canadian hauling and coach companies gained the right to put up international lading subordinates or new companies in Mexico, every bit good as acquired minority ownership in 1995, bulk ownership by 2000, and 100 per centum ownership in 2003 ( 30 ) .

NAFTA has besides for good opened the Mexican market for US and Canadian railwaies, locking in the market-oriented reforms undertaken by the Mexican National Railroad. This permits US and Canadian railwaies to market their services straight to consumers, use their ain engines, concept and ain terminuss in Mexico, and supply substructure funding ( Coffey 51 ) .

However, these benefits do non account for the imperfectnesss that the North American Free Trade Agreement suffers. Because of NAFTA, pollution along the US-Mexican boundary line is increasing to a great extent. The public wellness, due to lax environmental and nutrient importation Torahs, is in serious danger. And the prosperity promised by NAFTA though the creative activity of occupations has non materialized.

Jobs and Wages

NAFTA has efficaciously reduced the figure and quality of US occupations. Advocates claimed that NAFTA would make 200,000 occupations yearly in its first two old ages. This anticipation was based on the premise of an increasing US trade excess with Mexico, utilizing a US Commerce Department expression that estimates occupations per billion dollars of net exports. However, harmonizing to this method of analysis, NAFTA has cost the US at least 400,000 occupations ( Riley n. pag. ) . But, obscure economic estimations need non be relied upon when a wealth of experiential informations provides conclusive grounds. As of April 15, 1998, the figure of US workers certified by the US Department of Labor as holding lost their occupations because of NAFTA ( under the narrowly defined NAFTA Trade Adjustment Assistance [ NAFTA TAA ] ) had reached 170,395 ( Riley n. pag. ) . These figures, stand foring 2,601 houses in 48 provinces, are merely the tip of the NAFTA job-loss iceberg. Not merely are service workers officially excluded from the plan, but besides many employees who could use, prefer to turn to more generous, less & # 8220 ; administratively constipated & # 8221 ; plans ( Riley n. pag. ) . Harmonizing to the Florida Department of Agriculture, for illustration, over 100-state tomato processing and wadding workss closed after the understanding s origin with a loss of 40,000 occupations. Merely one of these companies is registered in the NAFTA TAA plan records ( Riley n. pag. ) . Similarly, in December 1996, employees of Guess Clothing Company were sent packing when 1,000 occupations were shunted from Los Angeles to less labor-costly countries, including 800 to Mexico ( Riley n. pag. ) . None of these occupation losingss appear in the records of NAFTA s TAA.

On the other side of the coin, NAFTA advocates can merely place a few thousand specific NAFTA-created occupations. In February 1997, a survey compiled by Public Citizen found that 89 % of the companies that had made specific promises to make occupations under NAFTA had failed to run into their job-creation promises ( NAFTA & # 8217 ; s Broken n. pag. ) . Alternatively, research revealed that many of these companies had really discharged 1000s of US workers in order to relocate to Mexico. Corporate advocates such as Allied Signal, General Electric, Johnson & A ; Johnson, Kimberly-Clark ( once Scott Paper ) , Lucent Technologies ( once AT & A ; T ) , Mattel, Proctor & A ; Gamble, Siemens, Whirlpool, Xerox and Zenith oiled a smooth transition for NAFTA s execution by guaranting everybody that they would make more occupations, or at the worst, maintain bing employment degrees in their mills. Two old ages subsequently, all 11 companies had accumulated regretful job-loss records. Allied Signal, for illustration, had laid off 1,125 US workers in eight provinces to relocate mills to Mexico under NAFTA. General Electric shed 2,608 occupations in six provinces for the same ground ( Uchitelle D2 ) .

Another job that has emerged is existent rewards have declined since NAFTA & # 8217 ; s debut. Under Chapter 11 of the NAFTA understanding, investors are granted new rights and protections for switching employment from one NAFTA state to the following ( Betts 31 ) . NAFTA boosters were acute to guarantee the US that increased trade under NAFTA would non merely vouch new occupations, but a greater per centum of high-wage, high-skill employment.

However, in the United States, Canada and Mexico, rewards have declined since the execution of NAFTA ( & # 8221 ; Drop Countries & # 8221 ; n. pag. ) . Between 1993 and 1996 there was a 4.1 per cent diminution in rewards in the US, while in California, the province with the largest economic system in the US, rewards fell 3.1 per cent ( & # 8221 ; Drop Countries & # 8221 ; n. pag. ) .

US informations reveal that American workers who have lost their occupations to cheaper employees across the boundary line, are mostly re-employed in the lower pay service sector ( Uchitelle D2 ) . In fact, the US Labor Department predicts that over the following decennary the top four job-growth classs will be tellers, janitors, retail gross revenues clerks, and servers and waitresses ( D2 ) .

Faced with dissatisfied staff, US companies progressively point out the insecure land upon which their employees stand. A study commissioned by the Secretariat of the NAFTA Commission for Labor Co-operation found that, since the execution of NAFTA, the figure of US companies endangering to switch their workss and employment installations to Mexico, in response to staff turbulency and unionisation, has tripled ( D2 ) .

The Environment & A ; Public Health

NAFTA has besides contributed to an environmental and wellness calamity along the 2000-mile US-Mexican boundary line. NAFTA began its 3rd twelvemonth sinking in a sea of unbroken promises associating to the environment, public wellness, occupations and rewards. NAFTA has intensified terrible jobs of H2O and air pollution, risky wastes dumping, and increased the incidence rates of certain diseases and birth defects in the boundary line part ( Fraser n. pag. ) . In its study, NAFTA s Broken Promises: The Border Betrayed, Public Citizen said NAFTA s advocates promised a healthier and environmentally cleaner boundary line ( NAFTA & # 8217 ; s Broken n. pag. ) . These positive elements would ensue from fewer maquiladoras, a foreign-owned mill in Mexico, concentrating on the US-Mexican boundary line, more wealth in Mexican boundary line communities, and NAFTA-created establishments that would heighten environmental jurisprudence enforcement and co-ordinate support for killing undertakings.

Vice President Al Gore voiced the positions mentioned above in a 1993 televised argument with H. Ross Perot. Perot said one Mexican attractive force was slack environmental controls. Gore responded that NAFTA would give the US clout over Mexico with regard to environmental criterions ( Fraser n. pag. ) .

Pro-NAFTA lobbyists agreed. Calman Cohen of the Emergency Committee for American Trade, stand foring major US corporations, said: For those who are seeking to state that we will see more installations [ maquiladoras ] . I say it is 180 grades the other manner. Those are the installations that will shut down & # 8221 ; ( Fraser n. pag. ) .

Public Citizen s study says, nevertheless, that maquiladora growing had increased 20 per centum in NAFTA s first two old ages ( NAFTA & # 8217 ; s Broken n. pag. ) . In add-on, the study contends, the maquiladora industry is altering from assembly workss to all-out fabrication installations.

The environmental reverberations of increased activity includes an addition in the creative activity of risky waste, much of which the study says is merely washed down the drain & # 8221 ; ( NAFTA & # 8217 ; s Broken n. pag. ) . Merely 70 of the 352 industries bring forthing risky waste study proper disposal. Public Citizen quotes Oscar Canton Zetin, chair of the Mexican Ecology Commission, who said, Each twelvemonth, seven million dozenss of toxic waste are, without controls, illicitly dumped in drains and marine Waterss. Merely 1 per centum are under surveillance in the state ( Zetin qtd. in NAFTA & # 8217 ; s Broken n. pag. ) .

The impact of NAFTA on the occupants wellness on both sides of the boundary line is besides serious. Prior to NAFTA s blessing by the US Congress, remarkably high degrees of birth defects along the US-Mexico boundary line were being examined. Lloyd Bentsen, so Treasury Secretary, said he had seen babes with birth defects and added, The NAFTA bundle gives us the ability to guarantee that those jobs will be addressed ( Milich and Varady n. pag. ) .

The incidence of nervous tubing birth defects has non improved since NAFTA took consequence in 1994, and may really be increasing. The rate of anencephalia ( a rare birth defect in which full-term babes are born with uncomplete or losing encephalons and/or skulls ) has declined nationally in the US but increased in Texas ( NAFTA & # 8217 ; s Broken n. pag. ) . Brownsville, Texas, a boundary line town, is peculiarly affected. Brownsville s sister metropolis is Matamoros, Mexico, and a 1995 epidemiology study correlating 12 old ages of Matamoros industrial activity and Brownsville anencephalia rates, finds that the prevalence of anencephalia is strongly correlated to the degree of activity at the nearby Matamoros maquiladora zone ( NAFTA & # 8217 ; s Broke

n N. pag. ) .

Another wellness issue is low-birth weights of the boundary line community babes. Harmonizing to the Public Citizen study, the Journal of Industrial Medicine published a survey in December 1993 that says adult females working in garment and electronics maquila workss in Tijuana, Mexico had babes with lower birth weights than babes born to adult females working in service-related industries ( NAFTA & # 8217 ; s Broken n. pag. ) . The issue is highlighted because more than 350,000 adult females working in maquiladoras are of generative age.

Another wellness issue impacting the treaty is the spread of waterborne infective disease. Representative Ron Coleman argued that transition of NAFTA would assist control waterborne infective disease,

The incidence of hepatitis, bacillary dysentery, and amoebiasis along the boundary line is two to three times the national norm. Fifteen per centum of the households populating in the colonias [ boundary line slums ] study at least one household member suffers from diarrhoea every hebdomad. This statute law seeks nil more to protect hapless kids from going ill ( NAFTA & # 8217 ; s Broken n. pag. ) .

Public Citizen says instead than decrease, the incidence of infective diseases has in some instances increased. For case, two old ages after NAFTA was implemented, the hepatitis rate in the boundary line part remained two to five times the US national norm. Waterborne disease had besides grown drastically in some countries ( NAFTA & # 8217 ; s Broken n. pag. ) .

Advocates besides promised NAFTA would clean border-area H2O. Since NAFTA, there have been no appreciable alterations in the public H2O or sewerage intervention substructure. And the boundary line part s H2O deficit crisis is turning with terrible drouth that has plagued Northern Mexico and Southern Texas for the past three old ages. Improvements in that substructure have been promised. The Clinton Administration said the NAFTA-related Border Environmental Cooperation Agreement would supply new funding for undertakings to handle effluent and supply clean imbibing H2O ( NAFTA Environment 42 ) .

In world, several H2O and sewerage undertakings under manner before NAFTA have been halted as a consequence of the Mexican economic depression ( 41 ) . The rush in funding for such undertakings promised by NAFTA protagonists ne’er materialized.

Food and Farm

Food safety and agribusiness have besides been affected by the execution of NAFTA. US agricultural imports from Canada and Mexico have increased 57 % since 1993. Five old ages after NAFTA, 52 % of all US fruit and vegetable imports come from Mexico ( & # 8221 ; New Tables & # 8221 ; A2 ) . During this same period, Food and Drug Administration ( FDA ) reviews of imported nutrient declined from 8 % of entire imports to less than 2 % ( A2 ) .

Besides, NAFTA does non necessitate member states to keep a minimal degree of nutrient safety criterions. The inundation of fruit and vegetable imports from Mexico coincides with terrible cuts to Mexico & # 8217 ; s domestic nutrient review budget. In 1992, Mexico & # 8217 ; s disbursement on nutrient safety was US $ 25 million, but by 1995 had been slashed to US $ 5 million ( A2 ) . In 1997, an eruption of potentially fatal Hepatitis A from frozen strawberries imported from Mexico sickened 270 people in five US provinces, including 130 kids in Michigan ( A2 ) . The kids had received the strawberries through the Federal Government & # 8217 ; s countrywide school tiffin plan. NAFTA besides forbids particular, more strict reviews on Mexican green goods imports. In 1993, imported strawberries from Mexico were found to hold an 18.4 % misdemeanor rate for illegal degrees of pesticides ( A2 ) . Five old ages subsequently, Mexican strawberry imports into the US have increased 31 % under NAFTA, and consist 96 % of entire US strawberry imports ( A2 ) .

US agribusiness is in crisis. The & # 8220 ; free market-free trade & # 8221 ; farm policies of the ninetiess have gutted US wheat, winter fruit and vegetable, and tomato manufacturers. And they have tied the custodies of policymakers forestalling them from safeguarding US husbandmans from the dumping that has resulted from recent dazes like the currency depreciation in Canada and the suppression of world-wide demand for trade goods caused by the Asiatic fiscal crisis. In add-on, as a consequence of NAFTA, US manufacturers are now forced to vie with merchandises from Mexico, where agribusiness though non farm workers or consumers benefit from lower rewards and less strict criterions on pesticide residues, bacterial taint and other possible public wellness menaces. Meanwhile, since NAFTA, the figure of little US husbandmans has declined 9 % while the per centum of US farm families at or near the federal poorness degree has skyrocketed to 93 % ( Menser n. pag. ) . Consumer monetary values for nutrient, nevertheless, have non dropped.

A consensus among husbandmans from all three NAFTA states is emerging about NAFTA & # 8217 ; s effects on the agricultural trade. While agricultural exports have increased under NAFTA, neither husbandmans in Canada, Mexico nor the US have reaped benefits in an addition in their criterion of life. During the five old ages of NAFTA, US exports to Canada and Mexico grew 35 % , but net farm incomes have remained the same ( Menser n. pag. ) . In fact, 45 % of US small- and moderate-sized farms suffered existent diminutions in income ( Menser n. pag. ) . During that same period, Canadian agricultural exports to the US grew 57 % , but net farm income in Canada hasn & # 8217 ; t caught up to 1986 degrees ( Menser n. pag. ) .

Over the past five old ages, the worldwide US agricultural trade excess has been turning. However, since 1993, the US agricultural excess with Mexico and Canada has declined by two tierces under NAFTA ( Menser n. pag. ) .

Under NAFTA, Mexican tomato imports have increased 63 % ( & # 8221 ; NAFTA Woes & # 8221 ; n. pag. ) . Between 1993 and 1998, over 100 Florida tomato husbandmans have gone out of concern and 24 wadding houses have closed ( & # 8221 ; NAFTA Woes & # 8221 ; n. pag. ) . The loss of tomato husbandmans has cost Florida agriculture $ 1 billion ( & # 8221 ; NAFTA Woes & # 8221 ; n. pag. ) . During the same period, consumer monetary values for tomatoes increased by 16 % ( & # 8221 ; NAFTA Woes & # 8221 ; n. pag. ) .

NAFTA & # 8217 ; s prohibitions on import quotas and snap-back duties ( duties that kick in when domestic manufacturers are threatened by dumping of trade goods on the US market ) have made US husbandmans and meat manufacturers vulnerable to inundations of inexpensive imports from Canada. Canada & # 8217 ; s currency has suffered a drastic depreciation of 11 % over the past twelvemonth, doing Canadian agricultural imports much cheaper. This has hurt many US husbandmans, particularly hog husbandmans who have watched pig monetary values fall 62 % since 1997 ( Barboza C4 ) . This has been attributed in portion to the inflow of Canadian pigs, which have increased from a pre-NAFTA degree of 670,000 caput in 1992 to an tremendous sum of 5 million caput by the terminal of 1998 ( C4 ) . Yet, consumer monetary values for porc remain the same as they were last twelvemonth, and have increased 6 % in existent footings since 1993 ( C4 ) .

Before the 1988 Canada-US Free Trade Agreement and NAFTA, Canadian wheat imports to the US a major wheat manufacturer and exporter were virtually zero. Five old ages after NAFTA, the US is Canada & # 8217 ; s figure two export market for wheat. US imports of Canadian spring wheat increased 2,000 % , to 1.45 million dozenss, from 1990 to 1997. The Canadian wheat inundation has taken its toll on US wheat husbandmans, who are prevented by NAFTA from enforcing new quotas, imposed on Canadian wheat in 1994, have been lifted.

The large victors under NAFTA have been big & # 8220 ; agribusiness & # 8221 ; companies working the below-market priced inexpensive imports to drive down domestic trade good monetary values such as wheat, pigs and cowss. NAFTA & # 8217 ; s market entree commissariats guarantee that the US imports Canadian wheat even though US grain stocks are high ( & # 8221 ; Message Pork & # 8221 ; 35 ) . One observer notes the same pattern with below-market priced cattle imports: & # 8220 ; Iowa Beef Packers is conveying Canadian cowss in and utilizing it to drive the market against our people. . . .There would be no NAFTA without transnational corporations. Somebody didn & # 8217 ; Ts wake up one forenoon and state, Hey, allow & # 8217 ; s open the boundary lines & # 8221 ; ( & # 8221 ; Message Pork & # 8221 ; 35 ) .


NAFTA has non merely failed to supply some of its promised benefits, but it has led alternatively to unemployment, environmental desolation, and serious wellness jobs. The few donees have been corporations who benefit from deregulating that reduces their costs and the free market that they mostly control. The North American Free Trade Agreement has proved a failure and at the really least must be revised in order to counterbalance for the amendss that have occurred. Equally long as economic motivations are behind any statute law, people and the environment will unluckily ever be expendable. Bibliography

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