ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -It is estimated that NAFTA caused job dislocation for about 415, 000 workers between January 1, 1994 and December 31, 2001, about 34% of whom were in the textile and apparel industry and 5% in the automotive industry.

Detailed explanation-2: -The main downside of NAFTA was the loss of United States manufacturing jobs. Many jobs shifted from the United States to Mexico, as higher-paying factory jobs moved to more cost-effective regions. This was especially true in lower-skilled industries such as the automotive or textile industries.

Detailed explanation-3: -The long-run increase in manufacturing employment in Mexico (about 400, 000 jobs) was small and disappointing, while U.S. manufacturing plummeted by 5 million-but more because of Chinese imports than imports from Mexico.

Detailed explanation-4: -NAFTA affected U.S. workers in four principal ways. First, it caused the loss of some 700, 000 jobs as production moved to Mexico. Most of these losses came in California, Texas, Michigan, and other states where manufacturing is concentrated.

Detailed explanation-5: -Manufacturing costs in Mexico were (and still are) low, and U.S. tariffs on goods manufactured in Mexico fell from 2% to 0.2% between 1993 and 2001. In turn, Mexico became an exporting powerhouse: the dollar value of its exports to its NAFTA trading partners doubled within this period.