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5 Bus. Info. Alert 1 (1993)

handle is hein.journals/busiale5 and id is 1 raw text is: What's new in business publications, databases and research techniques Volume 5, N.. 1 January 1993 Contents The North America Free Trade Agreement I Database Report 6 For Your Information 7 New Publications 8 New Editions 13 Publishers 14 Index 15 i The North America Free Trade Agreement By Yolanda C. Maloney The North American Free Trade Agreement (NAFTA) is a landmark on the way toward global free trade. As in any trade liberalizing measure, there will be winners and losers. The implication for virtually all businesses is that competition, immedi- ate or potential, will increase. This article begins with some definitions of terms that will become increasingly familiar. Some of the most important provisions are enumerated and explained. Impacts from both the pro- and anti-NAFTA courts are explored. Definitions Comparative advantage is the theory of why trade increases everyone's welfare. Even if a country isn't very efficient at producing anything, there is something at which it is relatively (comparatively) best at doing. This is its comparative advantage. Consequently, there is always scope for specialization and welfare enhancing trade between any two countries. Free trade is the absolutely unrestricted exchange of goods and services between countries. At this time, pure free trade exists nowhere; perhaps a country like Singapore comes close. Trade protection is the imposition of restrictions on the flow of goods, services, money and capital investment between countries. Examples of trade protection include tariffs, import licensing requirements, import quotas, subsidies, or limits on foreign investment. No country is absolutely protectionist, but a country like Albania comes close. Developing nations tend to favor high-tariff policies to nurture budding industries until they are full-grown and can compete with other nation's products. Some advantages of free trade are the expansion of markets, higher productivity, and more efficiency, while the disadvantages can be loss of jobs, industries moving to areas with cheaper labor, capital outflow, and dependency on other countries for vital products. A free trade agreement is the consent of a group of nations to drop trade barriers among themselves, not necessarily affect their trade relations with countries outside the agreement. The North America Free Trade Agreement (NAFTA) is a treaty to lower and eventually eliminate trade barriers among Canada, Mexico, and the United States, which seeks to strengthen the North American position as a global market force. Mexico will benefit from increased foreign investment and jobs. Of the three continued on next page What's new in business publications, databases and research techniques Volume 5, Mo. I January 1se3