twenty-one hours to China. Increased investment and exports have created jobs and increased GDP. In 1998, Mexico's economy grew 4.5 percent and economists predict that it will grow an additional 2.5 percent in '99 (Harbrecht 35). Free trade under NAFTA has also encouraged international specialization, the production of only the goods that a particular economy can produce most efficiently. If the U.S. for example, is efficiently manufacturing cars and Mexico, producing corn, then the U.S. should produce only cars and Mexico, only corn. They are more efficient if they each produce at their highest output, and trade for other goods. International specialization increases efficiency, lowering consumer prices; consumers no longer have to pay for inefficiently produced goods. With all the good effects of NAFTA unfortunately there is some negative effects. One of the greatest impacts on Canadian and United States economies has been loss of jobs and decreased wages. Even though NAFTA has created jobs in the export sector, other production industries have moved their facilities to Mexico where wages are lower and operating costs are lower. Also, wages in Canada and the United States have been held in check and in some cases lowered by the threat of job loss associated with companies moving to Mexico if employees were not willing to work for less benefits or wages. On a whole, it is perceived that workers rights have diminished somewhat because employers now can hire "cheaper labor". In the United States and Canada some wages are stagnating if not declining somewhat. In addition, many border workers on the United States and Mexican sides have lost their employment when factories were relocated to other areas where lower wages helped decrease production costs and increase profits. In essence, the larger corporations and businesses have benefited from NAFTA while smaller companies have been effectively erased from the economic equation. The influx ...
