North American Free Trade Agreement - PowerPoint PPT Presentation

About This Presentation
Title:

North American Free Trade Agreement

Description:

Over half of the textiles and apparel sold in the United States has been ... Freer trade in the apparel and textile sector will pose important challenges for ... – PowerPoint PPT presentation

Number of Views:187
Avg rating:3.0/5.0
Slides: 29
Provided by: centerform1
Learn more at: http://educ.jmu.edu
Category:

less

Transcript and Presenter's Notes

Title: North American Free Trade Agreement


1
North American Free Trade Agreement
  • NAFTA
  • e-mail sheltork_at_jmu.edu

2
Multi-Fiber Arrangement (MFA)
  • MFA was instituted in 1974 as trade laws for the
    textile and apparel industry, it is in the
    process of being phased-out.
  • Multi-Fiber Arrangement served to protect the
    textile and apparel industries of developed
    countries from the low-cost competition of
    textile and apparel from developing countries.
  • The most important structural change is the
    gradual phase-out of Multi Fiber Arrangement
    between now and the year 2005.

3
Uruguay Round Agreement
  • The Uruguay Round Agreement replaces the
    Multi-Fiber Arrangement.
  • Uruguay Round Agreement has been designed to
    liberalize the trade in textiles and clothing by
    allowing market forces to guide the consumption
    and production decisions.
  • Uncontrolled products could grow at an an
    accelerated rate during the transition period.
  • Many of these imports will come from countries
    that have low-cost production and can easily
    penetrate and over whelm the United States
    market.

4
(No Transcript)
5
North American Free Trade Agreement
  • In addition to changes in the MFA Agreement under
    the North American Free Trade Agreement, by
    January 1, 2004 all tariffs will be eliminated on
    textiles and apparel products traded among
  • Canada, Mexico and the United States.
  • Initial tariff phase-out, effective January 1,
    1994, Mexico removed tariffs on nearly 50 of all
    industrial goods.
  • By 1999, sixty-five per cent of all U. S.
    Industrial products exported to Mexico will enter
    that country tariff free.
  • NAFTA strengths Mexicos position as a main
    supplier of imported textiles and clothing
    product6s to the United States.

6
North American Free Trade Agreement Countries
7
1992-1996 Imports in Million of Dollars
  • The direction of imports of textiles and apparel
    to the United States is changing, the big four
    suppliers of textiles and apparel to the United
    States in the past has been China, Hong Kong,
    Twain and South Korea.
  • Over half of the textiles and apparel sold in the
    United States has been imported from outside the
    country.
  • In the 1980, eight three percent of these
    importers came from Asia - today with NAFTA in
    place. Asia accounts for forty one percent of
    textiles and apparel imports.
  • China has been the main supplier of textiles and
    apparel to the United States prior to 1996.

8
(No Transcript)
9
Imports to the United States - 1996
  • The countries that have been most successful in
    importing textiles and apparel goods to the
    United States are
  • Millions Sq. Meters Millions
  • China 1644,000,000 4892,000,000
  • Hong Kong 1796,000,000 4031,000,000
  • South Korea 2207,000,000 2049,000,000
  • Taiwan 1203,000,000 2733,000,000
  • Mexico 891,000,000 4231,000,000
  • Canada 729,000,000 1995,000,000

10
(No Transcript)
11
(No Transcript)
12
(No Transcript)
13
(No Transcript)
14
(No Transcript)
15
(No Transcript)
16
Manufacturing Companies and Factories
  • Companies are closing down Far Eastern
    manufacturing companies and factories and moving
    them to Mexico, a direct consequence of NAFTA.
  • Though workers in Mexico make higher wages,
    savings in transportation time and cost means
    savings for United States companies and
    consumers.
  • Although wages in Mexico are three times the 60
    per month textiles and apparel workers make in
    some Asian countries, it is cheaper and faster to
    move goods from Mexico to the United States than
    from China.

17
U.S. Textile /Apparel Imports - MFA
Million Equivalent
Square Meters
18
Leading Suppliers
  • At present Mexicos swift accent to become, if
    only by a small margin, is the United States
    leading suppliers of imported apparel and
    textiles. (square meter equivalent.)
  • Mexicos ( in 1966) combined shipments out passed
    China, which has held the top spot most of the
    last decade.
  • A new scene may emerge, and countries will want
    low cost labor supply - lower than Mexico - labor
    cost may be more competitive in a quota less
    world.

19
Countries involved in NAFTA
20
(No Transcript)
21
  • North American Free Trade Agreement which already
    has resulted in significantly increased trade
    among the United States, Canada and Mexico, it is
    likely that NAFTA will negotiate free trade
    agreements with other countries in the future.
  • Honduras 32.73 increase in 1996
  • El Salvador 23.26 increase in 1996
  • Brazil -22.04 decrease in 1996
  • Colombia -14.29 decrease in 1996

22
1992-1996 Mexicos Imports in Dollars
  • Since the North American Free Trade Agreements
    enactment three years ago, Mexicos exports to
    the United States have trebled, to over four
    billion dollars.
  • In years past, the United States has supplied
    only minuscule amounts of fabric to the Asian
    market, but in 1996, they supplied seventy
    percent of the raw materials going to the Mexican
    sewing shops.

23

24
(No Transcript)
25
U.S. Textile/Apparel Imports - MFA
Data In Million
26
International Trade Patterns
  • International trade patterns for three of the
    four major Asian importers of textile and apparel
    during the years 1995-1996 decreased in market
    share measured in million square meters.
  • Market share of imports to the U.S. from Mexico
    during the years 1995-1996 increased 42.39
    (meters) and 39.33 ().
  • Canadian market share of imported goods during
    the years 1995-1996 was increased 15.25 and
    20.81 ()

27
(No Transcript)
28
  • Freer trade in the apparel and textile sector
    will pose important challenges for manufacturers
    and retailers in defining and adapting their
    competitive positions and marketing strategies in
    a quota less world.
Write a Comment
User Comments (0)
About PowerShow.com