The major goal of the North American Free Trade Agreement (NAFTA), which was signed between the U.S., Canada and Mexico, was to bring faster growth, better working conditions, more jobs and a cleaner environment for all as a result of increased exports and trade. This trading bloc, the one America, has approximately 421 million consumers.
The Canada-United States trade is the largest bilateral flow between two countries. The vast majority around 84 percent of both Canadian and Mexican exports goes to the American countries. Mexico is the United States 3rd largest trade partner and 2nd largest export market for U.S. products. From Mexicos perspective, the countrys exports have exploded under NAFTA; U.S-Mexico bilateral trade increased from $88 billion in 1993, the year prior to the implementation of NAFTA, to $383 billion in 2010, an increase of 335 percent. However, Mexicos dependence on the U.S. for its exports was shown to be a liability in the global economic downturn as Mexico felt the full brunt of declining consumption in the United States.
Mexican trade policy is very open policy as compared to other countries in the world. The country has become an important exporting and importing power. The Mexican economic cycles are very dependent on the American economy. Mexico has signed 12 trade agreements with 43 nations, thus putting 90 percent of its trade under free trade regulations.
Considerable violence among drug gangs recently has created insecurity for businesspeople in Mexico. In addition, competition from China for offshored jobs from foreign firms has put downward pressure on opportunities for Mexico, as manufacturing facilities and some service facilities migrate from Mexico to China in a race for the lowest cost operations.
Mercosur is the fourth largest trading bloc after the EU, NAFTA, and ASEAN regions.
Mercousr trading bloc comprises the original parties including Brazil, Argentina, Paraguay and Uruguay. Venezuela is an applicant country awaiting ratification. This regional trading bloc comprises 250 million people and accounts for 75 percent of South Americas GDP.
The Federal Republic of Brazil is Latin Americas biggest economy and is the fifth largest country in the world in terms of land mass and population, with about 193 million people. According to the U.S. Department of Commerce, Brazil is the 7th largest economy in the world. Bolstered by demand from China and elsewhere for its raw materials, by strong domestic demand, and by a growing middle class, Brazils economy grew by 7.3 percent in 2010.
While most of the developed world has been mired in debt and stunted growth prospects, Brazils economy is stable and growth prospects are bright. Yet poor infrastructure remains an obstacle (less than 10 percent of roads are paved), and drastic inequality among Brazils people hampers domestic growth.