How NAFTA has affected the financial service industries in the United S

The northeasterly American Free Trade Agreement (NAFTA) was enacted in November of 1993 with aims to facilitate the free lam of goods, inspection and repairs and labor between the fall in States, Canada and Mexico. The ratification of NAFTA created the worlds largest free market with roughly 390 million consumers and an estimated total output of $8.6 trillion. Clearly, this administer alliance has had a major influence on the pecuniary service industries of the participating nations and will continue to do so in the future. However, the fiscal service provisions of NAFTA will have sufficiently greater implications for Mexico than either the United States or Canada. This is in part because Mexico is embarking upon a greater stir up towards openness in its financial service industries. The fact that the financial markets of Canada and the United States have been highly integrated prior to NAFTA implies that they will not bring in as much from transactions within their own ma rkets. Whats more, Canadas trade with Mexico is 1 percent of its trade with the United States. However, the principal gains from financial integration of this sort have largely to do with the more good allocation of capital across international boundaries and the more efficient provision of domestic financial function to consumers.The primary gains to the United States from the NAFTA financial services agreement will be predominantly seen in the long run. The glide slope to a market that includes 90 million people and has been served by a financial and banking sector that has been relatively inefficient and illiquid will prove to be a major advantage to the United States. Although the market door to Mexicos financial industry has been gradual, U.S. banks, insurers and financial companies have free and fair access to Mexico. Further, in contrast to Canada, the United States has had strong historical ties with Mexico and this familiarity is expected to turn in an advantage to the United States in Mexico. In the years to come, further maturation of business for U.S. banks and financial institutions because of NAFTA can be expected. A key usurpation of the financial services sector is that U.S. banks and financial institutions will be labored to improve their competitiveness. The McFadden Act (1927) and the Glass-Steagall Act (1933) limited branch-based banks an... ...a hemispheric bloc, although experts estimate that an expansion throughout Latin America will take much prison term and resources due to political maneuvering. Regardless, the implications of such an agreement will most assuredly impact the economies of all countries involved in a dramatic and curious fashion. REFERENCESCrary, D, Royal Bank of Canada and Bank of Montreal Plan Merger, Associated Press, January 23, 1998.Chant, J, The Financial welkin in NAFTA A Trinational Analysis,S. Globerman and M. Walker, 2000.Gonzalez-Hermosillo, B, Financial consolidation in North America Paper pres entedat the session Capital Mobility and Financial Integration in North America, Allied Social Science Associations annual meetings, capital of Massachusetts (MA), 3-5 January 2001.Wonnacott, R.J. 2000. The NAFTA Fortress North America? Commentary(C.D. Howe Institute), no. 541-18.White, W.R. 1999. nigh Implications of International Financial Integration for Canadian Policy Technical make-up No. 57. Ottawa Bank of Canada.Garber, P.M. and Weisbrod, S.R., Opening the Financial Services foodstuff in Mexico,The Mexican-US Free Trade Agreement.