Which of the following was an observable effect of NAFTA?
A)NAFTA led to a substantial decrease in the volume of trade among the three member countries.
B)Low-cost firms in Canadian manufacturing industries were replaced by the high-cost firms.
C)Imports of clothing and textiles into the member countries were diverted away from low-cost suppliers in Asia.
D)There was massive shift of jobs toward Mexico.

Question

Quizplus · Accepted Answer

NAFTA led to a diversion of imports of clothing and textiles away from low-cost suppliers in Asia and toward the member countries, particularly Mexico. This is because the agreement eliminated tariffs and other trade barriers among the member countries, making it easier and more profitable to trade with each other. As a result, many firms shifted their production to Mexico where labor was cheaper and then exported their goods to the US and Canada. This led to a decline in manufacturing jobs in the US and Canada, but did not result in a massive shift of jobs toward Mexico.

Which of the Following Was an Observable Effect of NAFTA