NAFTA and its effects on the USA: revisited

Abstract

North American Free Trade Agreement (NAFTA) was created to help to improve the economic well being of the people in the member countries. NAFTA did improve the trade balance and foreign direct investment of Mexico. NAFTA also improved the trade balance and employment rate in Canada. However, the effect of NAFTA on the USA is unclear, i.e. it does not show a negative or positive effect on the US economy. Specifically, it is hard to establish a direct relationship on the employment rate or wage rate in the USA due to NAFTA. Therefore, more study is needed to determine whether the USA has lost jobs or lowered the wage rate in the USA.