South-Western - Management  
World Trade Organization Ministers Eye NAFTA's Boost to Mexico, United States
Topic Global Management
Key Words Global, NAFTA, World Trade Organization
InfoTrac Reference CJ107694020
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News Story

Mexico is host to the World Trade Organization's ministerial meeting this week. The economic success Mexico has enjoyed in the wake of NAFTA has prompted WTO ministers to try to create NAFTA-like relations among many more nations. Activists, however, who believe that NAFTA has hurt Mexico more than it has helped it, are still protesting NAFTA.

Jorge Madrazo, who heads Mexico's consulate in Seattle, says that NAFTA has been good for both Mexico and Washington state, although there are some problems. Madrazo feels that NAFTA will be the most important tool in combating poverty in Mexico. Some of the business that is done between Washington state and Mexico includes:

  • Last year Mexico ranked first in imports of Washington apples, buying 10 million boxes worth $100 million. But last year those apples sold for $2 a box below an official price set in trade negotiations, which hurt apple growers in Mexico and resulted in Mexico imposing a steep tariff, effectively shutting out imports. Since 90 percent of the apple industry workers around Yakima, Washington are Mexican by birth, they are hurt by the tariffs.
  • Virtually all of the French fries at Mexican burger stands are from Washington state.
  • Mexico is in the midst of buying 428 Boeing jets to update AeroMexico's fleet.
  • Factories have been set up along the Mexican border by U.S. and Canadian companies that employ unskilled workers for as little as 87 cents an hour in conditions that wouldn't be tolerated in the U.S. or Canada.
  • Weyerhaeuser has four new plants in Mexico.
  • Starbucks buys 10 percent of its coffee from Mexico.
  • Mexican trucks are barred from driving across the U.S., so they must pay to unload at the border and load onto American trucks.

Questions
1.

Explain how NAFTA works, and why it was originally implemented.

2.

From the information in this article, what are some of the advantages and disadvantages of NAFTA to both Washington state and Mexico?

Source "World Trade Organization Ministers Eye NAFTA's Boost to Mexico, United States," Knight Ridder/Tribune Business News Sept. 12, 2003.
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