NAFTA

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What is the most important feature of U.S. and Mexico's bilateral trade relationship?

The deepening of the manufacturing integration between the two countries; they do not just buy goods from one another- they produce them together.

What was the initial goal of NAFTA?

The integration of Mexico with the highly developed, high wage economies of Canada and the United States. Liberalization of trade in agriculture, automobile manufacturing, and textiles.

How do imports from Mexico support U.S. jobs?

It has allowed for the creation of a highly competitive regional manufacturing platform, U.S. consumers access to low-cost, high quality products-which frees up some of their income to buy other goods and services.

What country is the U.S.'s largest single export market? a.

Mexico b. UK c. Germany d. Canada

Is the global enlargement of the trade deficit an outcome of NAFTA? Why or why not?

No, it is because the United States gradually altered its status from small net borrower to huge net borrower driven largely by rising federal budget deficits and falling household savings.

When did NAFTA negotiations begin?

a. 1997 b. 1994 c. 1991 d. 2008

What would happen to U.S. jobs if trade with Mexico ended?

a. 4.9 million people would be out of work b. about 4.9 million jobs would be created c. Trade both creates and destroys jobs so it would have a net effect d. 556,000 jobs would be lost

Since NAFTA was implemented, what has become the defining characteristic of U.S.-Mexico economic relationship?

a. Complex cross border value chains b. Complete specialization c. Trade of labor across countries d. Trade of services across countries

What type of trade are Mexico and U.S. engaging in?

a. Foreign Direct Investment b. Intra-industry trade c. Export-Import trade d.Export trade

What happens as a result of deep trade integration?

a. Goods are produced solely in one country b. Competition increases c. Goods are not solely produced in one country d. Competition no longer exists

What is an outcome that all three countries experienced after NAFTA?

a. Greater trade b. Intraregional integration and higher living standards c. A greater intra-industry trade d. More debt and less jobs

Since 1990 trade between Mexico and the U.S. has

a. Grown tremendously b. Mostly bilateral trade c. Mostly intra-industry trade d. Mostly service-oriented trade

How did NAFTA create broader and deeper market openings than any trade agreement before it?

a. It eliminated tariffs on all industrial goods, unrestricted trade on agriculture, opened up a broad range of service sectors, set high standards for patents, trademarks, and copyrights, and it preserved the rights of investors. b. Eliminated all tariffs between the three countries c. Set guidelines for intellectual property rights and eliminated tariffs d. It allowed for unlimited and unrestricted free trade between all three countries

Why is NAFTA so controversial?

a. It is the most integrative trade agreement in North America b. It is the first major trade deal the U.S. implemented with a poor country c. It is the first time that Mexico has gained from American Exports d. It is the first bilateral trade agreement for both countries

What industry does the U.S. have an advantage in, in their trade with Mexico?

a. Manufacturing trade b. Automobile trade c. High-skill industries that make up services d. Bilateral merchandise trade

What happened to Mexico after NAFTA was approved?

a. Mexico went into a financial crisis which discredited its policies. b. U.S. companies moved production to Mexico c. Unemployment decreased d. Mexico's financial sector grew

Why is it not plausible that trade integration with Mexico could drastically shape the U.S. economy?

a. Mexico's economy is 1/10th of the U.S.'s economy b. Mexico and the U.S. do not trade the same goods c. Mexico has one of the largest economies in North America d. Mexico and the U.S. do not trade goods, they trade labor

What was unique about NAFTA in regards to uniting economies?

a. NAFTA increased investment b. NAFTA was the first comprehensive free-trade agreement to join developed and developing nations. c. NAFTA created jobs in all 3 countries d.NAFTA provided Mexico with new markets

What do critics in the U.S. argue NAFTA does?

a. NAFTA is to blame for job losses and wage stagnation in the U.S, because of low wage competition in Mexico, companies are moving their production there. b. With NAFTA U.S. trade with its North American neighbors has more than tripled causing a trade deficit. c. NAFTA only creates job losses. d. Nothing, trade levels are the same under NAFTA

Has the economy of Mexico gotten better with NAFTA?

a. Not all aspects of Mexico's economy got better b. Mexico's economy has gotten worse c. Mexico's economy has gotten better d. Nothing has changed

What sector(s) of Mexico's economy grew with the implementation of NAFTA?

a. Only agricultural b. Textile and agricultural c.Manufacturing and textile d. Agricultural and manufacturing

According to the Wilson Center, what would happen to U.S. jobs if the U.S. stopped its trade with Mexico?

a. Over 5 million Americans would get jobs b. 4.9 million Americans would be out of work c. 3 million American jobs would disappear d. Nothing would happen to American jobs

What types of consequences has the United States experienced with the implementation of NAFTA?

a. Political b. Economic and political c. Economic, political, social, and cultural d. Economic and cultural

What expanded more under NAFTA?

a. The US trade deficit b. US exports to Mexico c. The Mexican trade deficit d. Mexican exports to the US

According to the law of comparative advantage, what would happen to jobs in the United States U.S. trade with its North American neighbors has more than tripled after NAFTA?

a. The United States would gain more jobs b. The United States would gain better, not more, jobs c. The United States would lose jobs d. The United States would not lose or gain jobs

What was the most damaging event in Mexico after NAFTA's implementation?

a. The rebellion b. The assassination of heir apparent Luis Donaldo Colosio c. The severe devaluation of the Mexican peso d. Build-up of debt in Mexico

Why do political leaders fear trade deficits (U.S. is importing more than they are exporting)?

a. They argue that exports do not support jobs at home while imports create job opportunities for Americans b. They argue that when the U.S. exports goods they are not supporting jobs c. They argue that exports support jobs at home while imports substitute for products that could be made by Americans d. They argue that a trade deficit stunts economic growth because there is not enough manufacturing in the U.S.

Do to technological innovations such as the internet and smartphones the NAFTA treaty needs what?

a. To update their data software b. A simple update c. An update to include more regulations on the internet d. An update to decrease regulations regarding the internet and tech in general

Is a global U.S. trade deficit inevitable? Why or why not?

a. Yes, The United States is bound to run an overall trade deficit when combined US savings of the household, business, and government sectors are negative, which they have been for years b. No, NAFTA is the source of the U.S.'s trade deficit and leaving the trade agreement would allow the U.S. to have a trade surplus c. Yes, the U.S. savings of the government sector is negative, and has been for a long time, making the U.S. run a deficit d. No, the United States has a trade deficit right now but it hasn't been like that in previous years

What does the increase in imports from Mexico do to U.S. manufacturing wages?

a. have no significant effect on manufacturing wages. b. Increases U.S. manufacturing wages c. Decreases U.S. manufacturing wages

How should NAFTA be updated to strengthen labor rights?

a.Incorporating labor rights in NAFTA itself b. Making labor rights a side agreement c. Should strengthen tariffs in order to strengthen labor rights d. Force the Mexican government to comply with U.S. regulation on labor rights


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