Global Managerial Economic Essay Example | Topics and Well Written Essays - 750 words

Global Managerial Economic - Essay ExampleAs a result of the supplemental agreements signed in 1993, NAFTA highlights the protection of environment and human resources recognizing that the entry of companies into the nations territories endangers them (NAFTA 1-5).The twelve stratum institution of NAFTA has changed the economic landscape of Mexico. Trade barriers have been solidly reduced in order to speed the entry of goods and services within the countrys borders. It can be recalled that prior to NAFTA, Mexicos responsibility reaches an average of 10%. This high level is reduced to the prevailing 2.9%. Empirical data likewise shows the significant improvement in the flow of goods between US and Mexico. In dollar terms, exports of goods to Mexico prior to NAFTA tripled in the third base quarter of 2000. US imports from Mexico in like manner tripled from 1994-2003. Exports now constitute a huge portion of the countrys GDP (The Effects of NAFTA on US-Mexican Trade and GDP 3).Tra de liberalization has benefited the Mexican customer by providing more choices in the market. The reduction in tariff and other trade barriers consequently set about the prices of commodities. It should also be noted that the free flow of goods and services between the NAFTA participants significantly improved Mexicos equilibrate of payments. More jobs have also opened in order to support the larger export requirements.The NAFTA also facilitates the inflow of foreign direct investment from the United States and Canada. Recognizing that business organizations can take advantage of the lower input and labor costs, manufacturers are now locating their plants in Mexico. FDI inflow in Mexico after NAFTA has well mounted. In fact, the year 1996 brought $800 million private foreign direct investment which represents almost two multiplication the countrys GDP (Study on the Operation 1). However, the proliferation of foreign firms operating in Mexico has brought about