Question

Critics of the North American Free Trade Agreement (NAFTA) feared that it would: A. increase the...

Critics of the North American Free Trade Agreement (NAFTA) feared that it would:

A. increase the flow of illegal Mexican immigrants to the United States.
B. cause the European Union and Japan to raise trade barriers against U.S. goods.
C. cause a massive loss of U.S. jobs to Mexico.
D. increase foreign ownership of assets in the United States.
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Answer #1

Option C is correct

There are tax advantages and cheap labour available in Mexico for foreign firms which implies that when the the trade agreement was signed it was feared that many firms from the United States will locate themselves in Mexico and those jobs that previously given to Americans were now be given to Mexicans. This is because firms from United States will find it cheaper to operate from Mexico where labour is cheap and there are tax advantages.

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