If you are tasked with writing your next 5 paragraph essay on worker’s remittance, you might struggle to find an appropriate topic. It is for this reason that a handful of potential topics are listed below:
On January 1, 1994 the North American Free Trade Agreement (NAFTA) was put into practice, eliminating most of the barriers to trade that had existed between the United States, Mexico and Canada. Some barriers to trade were removed immediately, while others were removed over a period of time. NAFTA addresses textile and apparel, transportation, energy, intellectual property, investment and more. After the creation of NAFTA, two additional related agreements were created to address labor and environmental issues. Prior to NAFTA, U.S. exports to Mexico were in a decline. After NAFTA was introduced, that trend was reversed and 72% of the agricultural products imported into Mexico in 2007 were from the U.S. This agreement has negatively impacted local Mexican labor leading to higher levels of workers remittances. It has also negatively impacted the agricultural sector of Mexico leading to higher levels of workers remittances after workers migrate to America. Finally, it has increased the number of farmers who migrate for long periods of time away from families in search of illegal jobs in America leading to higher levels of workers remittances.
Due to NAFTA Mexico has made strides in nearing the levels of exports of the United States and Canada. Mexican imports to the U.S. have increased four times since the implementation of NAFTA, rising from $60 billion per year to $280 billion. In addition, Mexico has moved from a closed economy becoming open to investments and foreign markets. The amount of foreign direct investment in Mexico has also increased from $1.3 million prior to the implementation of NAFTA to $14 billion after the agreement was launched. Mexico has faced challenges as a result of NAFTA. For instance, the creation of the free trade agreement has not raised the standards of living nor has it created increased incentives for Mexican workers to remain in Mexico instead of migrating north and sending workers remittances.
In addition, the agricultural sector in Mexico has suffered. The Mexican agricultural sector had been highly segmented and contained a large number of small and medium size farmers. It simply was not ready to bear the deregulation of the market as a result of NAFTA. In spite of initial promises by the government to impose tariffs that would ensure a more gradual transition, those promises were never implemented. Instead the market was opened up to imported farm and food products from the U.S. The effect was severe for small and medium size Mexican farmers, who found it difficult to compete with U.S. producers that were large and substantially subsidized.
U.S. farms tend to be much larger in terms of crops and acreage and are often heavily subsidized. Consequently, products can be sold at prices that are much lower in Mexico as compared to locally grown products, particularly maize or corn. In America agriculture is primarily concentrated on a large number of farms in rural areas that are huge and specialized. Less than one-quarter of the population in the United States now lives there. These farms, which are highly mechanized and productive, employ only a small percentage of U.S. workers. In place of the work animals that were once used, some 5 million tractors are now utilized. As a direct result of this transformation, agriculture in the United States has become very efficient and able to contribute to the overall growth of the economy in the U.S. Output from farms in the U.S. has increased dramatically, making it possible for consumers to spend a much smaller percentage of their income on food. In addition, a large percentage of the population has been freed to enter non-agricultural occupations that support economic growth and development. This transformation has been spurred by innovation in technology along with changing market conditions. As a result, production agriculture has become a much smaller player in both national as well as local rural economies. Although an increasingly integrated market structure has been established in order to meet safety and quality demands from American consumers, global markets have also introduced new consumers at the same time as well as new competitors. This has led to workers illegally crossing the border into America in search of jobs, and using workers remittances to help their families back home.
Overall, NAFTA has proven detrimental to the agricultural sector of Mexico which simply cannot keep in pace with American production. This has led to workers moving to America in search of jobs, both legally and illegally, which has impacted the rate of workers remittances. Moving where there is work, many farmers from Mexico leave their families for extended periods of time in order to send back as much money as possible.