North America is a continent in the northern hemisphere and (chiefly) western hemisphere. It is bordered on the north by the Arctic Ocean, on the east by the North Atlantic Ocean, on the southeast by the Caribbean Sea, and on the south and west by the North Pacific Ocean; South America lies to the southeast. It covers an area of about 24,490,000 square kilometers (9,450,000 sq mi), about 4.8 percent of the planet's surface or about 16.4% of its land area. As of October 2006, its population was estimated at over 514,600,000. It is the third-largest continent in area, following Asia and Africa, and is fourth in population after Asia, Africa, and Europe. North and South America are collectively known as the Americas.
North America is often divided into subregions but no universally accepted divisions exist. Central America comprises the southern region of the continent, but its northern terminus varies between sources. Geophysically, the region starts at the Isthmus of Tehuantepec in Mexico (namely the Mexican states of Campeche, Chiapas, Tabasco, Quintana Roo, and Yucatán). The United Nations geoscheme includes Mexico in Central America; conversely, the European Union excludes both Mexico and Belize from the area. Geopolitically, Mexico is frequently not reckoned in Central America.
Languages
Prevalent languages in North America are English, Spanish, and French. The term Anglo-America is used to refer to the anglophone countries of the Americas: namely the United States and Canada (where English and French are co-official), but also sometimes Belize and parts of the Caribbean. Latin America refers to the other areas of the Americas (generally south of the U.S.) where Romance languages derived from Latin predominate: the other republics of Central America, Mexico, much of the Caribbean, and most of South America.
The French language has historically played a significant role in North America and remains a distinctive presence in some regions. Canada is officially bilingual; French is the official language of the Canadian province of Quebec and is co-official with English in the province of New Brunswick. Other French-speaking locales include the French West Indies and Saint-Pierre and Miquelon, as well as the U.S. state of Louisiana, where French is also an official language. Haiti is included with this group based on past historical association but Haitians speak Creole and French. Although the former language is derived from French, it is not French.
Society & Culture
Socially and culturally, North America presents a well-defined entity. Canada and the United States have a similar culture and similar traditions as a result of both countries being former British colonies. A common cultural and economic market has developed between the two nations because of the strong economic and historical ties. Spanish-speaking North America shares a common past as former Spanish colonies. In Central American countries and Mexico where civilizations like the Maya developed, indigenous people preserve traditions across modern boundaries. Central American and Spanish-speaking Caribbean nations have historically had more in common due to geographical proximity and the fact that, after winning independence from Spain, Mexico never took part in an effort to build a Central American Union.
Demographically, North America is a racially and ethnically diverse continent. Its three main ethnic groups are Whites, Mestizos and Blacks (chiefly African-Americans and Afro-Caribbeans).[citation needed] There is a significant minority of Amerindians and Chinese among other less numerous groups.
Economy
Economically, Canada and the United States are the wealthiest and most developed nations in the continent; the countries of Central America and the Caribbean are much less developed, while Mexico—a newly industrialized country—lies between these two extremes. The most important trade blocs are the Caribbean Community and Common Market (CARICOM), the North American Free Trade Agreement (NAFTA), and the recently signed Central American Free Trade Agreement (CAFTA)—the last of these being an example of the economic integration sought by the nations of this subregion as a way to improve their financial status.
The economy of North America comprises more than 514 million people in 23 soverign states and 15 dependent territories. It is marked by a sharp division between the northern English and French speaking countries of Canada and the United States, which are among the wealthiest and most developed nations in the world, and the countries of Central America and the Caribbean that are less developed. Mexico lies in between these two extremes as a newly industrialized country or NIC, and is a part of NAFTA and the only Latin American member of the OECD.
North American Free Trade Agreement
The North American Free Trade Agreement (NAFTA) is an agreement between Canada, Mexico and the United States to eliminate tariffs on goods traded between themselves. Although currently only a trade agreement, with no supranational bodies or laws as in the European Union, all three members support proposals to move towards an EU style organisation. It is unknown whether or not this may eventually develop into a North American Union similar to that of Europe.
The Agreement
The North American Free Trade Agreement (NAFTA) eliminated the majority of tariffs between products traded among the United States, Canada and Mexico, and gradually phases out other tariffs over a 15-year period. Restrictions were to be removed from many categories, including motor vehicles, computers, textiles, and agriculture. The treaty also protects intellectual property rights (patents, copyrights, and trademarks), and outlines the removal of investment restrictions among the three countries. The agreement is trilateral in nature (that is, the terms apply equally to all countries) in all areas except agriculture, in which stipulations, tariff reduction phase-out periods and protection of selected industries, were negotiated on a bilateral basis. Provisions regarding worker and environmental protection were added later as a result of supplemental agreements signed in 1993.
NAFTA was an expansion of the earlier Canada-U.S. Free Trade Agreement of 1988. Unlike the European Union, NAFTA does not create a set of supranational governmental bodies, nor does it create a body of law superior to national law. NAFTA is a treaty under international law, though under United States law it is classed as a congressional-executive agreement rather than a treaty.
North American Agreement on Environmental Cooperation
The North American Agreement on Environmental Cooperation (NAAEC) was a response to environmentalists' concerns that companies would either relocate to Mexico, or the United States would lower its standards if the three countries did not achieve consistent environmental regulation. The NAAEC only obligates parties to enforce their own environmental laws. It does not create substantive standards for environmental regulation. The NAAEC, in an endeavour to be more than a set of environmental regulations, established the North American Commission for Environmental Cooperation (NACEC), a mechanism for addressing trade and environmental issues, the North American Development Bank (NADBank) for assisting and financing investments in pollution reduction, and the Border Environmental Cooperation Commission (BECC). The NADBank and the BECC have provided economic benefits to Mexico by financing 36 projects, mostly in the water sector. By complementing NAFTA with the NAAEC, it has been labeled the "greenest" trade agreement; though being a pioneer in this area, it was not hard for the agreement to be labeled "green."
North American Agreement on Labor Cooperation
The North American Agreement on Labour Cooperation (NAALC) supplements NAFTA and endeavours to create a foundation for cooperation among the three countries for the resolution of labour problems, as well as to promote greater cooperation among trade unions and social organizations in order to fight for improved labour conditions. Though most economists agree that it is difficult to assess the direct impact of the NAALC, it is agreed that there has been a convergence of labour standards in North America. Given its limitations, however, NAALC has not produced (and in fact was not intended to achieve)convergence in employment, productivity and salary trends in North America.
Effects
The benefits of NAFTA have been quantified by several economists, whose findings have been reported in several publications like the World Bank's Lessons from NAFTA for Latin America and the Caribbean, NAFTA's Impact on North America, and NAFTA Revisited by the Institute for International Economics. Most agree that NAFTA has been positive for Mexico, which has seen its poverty rates fall and real income rise, even after accounting for the 1994–1995 economic crisis. Nonetheless, the majority agree that NAFTA has not been enough (or worked fast enough) to produce an economic convergence (which is hardly surprising given the initial economic disparity between Mexico and the United States/Canada), nor to substantially reduce poverty rates. Some have suggested that in order to fully benefit from the agreement, Mexico must invest more in education and promote innovation in infrastructure and agriculture.
Trade
Trade has increased dramatically among the three nations since NAFTA. In the period of 1993–2004, total trade between the United States and its NAFTA partners increased 129.3% (110.1% with Canada and 100.9% with Mexico), yet total trade between the United States and non-NAFTA partners increased 123.8% in the same period, a roughly similar figure. According to Hufbauer (2005), overall, NAFTA has not caused trade diversion, aside from a few select industries such as textiles and apparel, in which rules of origin negotiated in the agreement were specifically designed to make U.S. firms prefer Mexican manufacturers. The World Bank also showed that the aggregate NAFTA imports' percentage growth was accompanied by an almost similar increase of non-NAFTA imports, thus suggesting that increase in trade was not diversionary.
Industry
Maquiladoras (Mexican factories which take in imported raw materials and produce goods for export) have become the landmark of trade in Mexico. Hufbauer's (2005) book shows that real income in the maquiladora sector has increased 15.5% since the implementation of NAFTA in 1994. Nonetheless, trade from the non-maquiladora sector has grown much faster.[citation needed] As the book suggests, and contrary to popular belief, this should be no surprise since maquiladora's products from border states could enter the United States duty-free since the 1960's industry agreement. Other sectors now benefit from the free trade agreement, and the share of exports from non-border states has increased in the last five years while the share of exports from maquiladora-border states has decreased. This phenomenon has allowed for the rapid growth of non-border metropolitan areas, such as Toluca, León and Puebla; all three larger in population than Tijuana and Ciudad Juárez. The main non-maquiladora industry that has benefited from NAFTA is the automobile industry, whose standards of quality are internationally recognized (having to comply to U.S., European Union, and Japanese standards). The main automobile industries are located in Puebla, Saltillo, Querétaro and Guanajuato. Also, NAFTA permitted the growth of high-tech exports, which, according to the World Bank, in 2004, represented 21% of total industrial exports, the highest percentage in Latin America.
align="justify">The auto and auto parts trade is by far the most important sector within NAFTA- it represents 20% of total intra-NAFTA trade. Mexico has successfully integrated their auto industries into the existing market between the US and Canada, which had been integrated since the 1965 Auto Pact and enhanced by CUSFTA, NAFTA's predecessor.
From the perspective of North American consumers, one of the effects of NAFTA has been the significant increase in bilingual (and often trilingual) labeling on products for simultaneous distribution through retailers in Canada, the United States, and Mexico in French, English, and Spanish.
Agriculture
From the earliest negotiations, agriculture was (and remains) a controversial topic within NAFTA, as it has been with almost all free trade agreements that have been signed within the WTO framework. Agriculture is the only section that was not negotiated trilaterally; instead, three separate agreements were signed between each pair of parties. The Canada-U.S. agreement contains significant restrictions and tariff quotas on agricultural products (mainly sugar, dairy, and poultry products), whereas the Mexico-U.S. pact allows for a wider liberalization within a framework of phase-out periods (which is surprising, since it was the first North-South FTA on agriculture to be signed).
The overall effect of the Mexico-U.S. agricultural agreement is a matter of dispute. Some argue that the effects have been devastating to peasants, given that Mexico did not invest in the infrastructure necessary for competition (such as efficient railroads and highways). Still, the causes of rural poverty cannot be directly attributed to NAFTA; in fact, Mexico's agricultural exports increased 9.4% annually between 1994 and 2001, while imports increased by only 6.9% a year during the same period. Others have pointed out that Mexico is suffering an adjustment typical of international trade theory, and that sectors with competitive advantage (mainly horticultural products and tropical fruits) have greatly benefited from the agreement, while others (like the corn sector) have not, and that this was expected (and promoted) by Mexican authorities while NAFTA was being negotiated.
In fact, production of corn in Mexico has actually increased since NAFTA's implementation. However, internal corn demand has increased beyond Mexico's sufficiency, and imports have become necessary, far beyond the quotas Mexico had originally negotiated. Zahniser & Coyle have also pointed out that corn prices in Mexico, adjusted for international prices, have drastically decreased, yet through a program of direct income transfer (a subsidy) expanded by former president Vicente Fox, production has remained stable since 2000. The logical result of a lower commodity price is that more use of it is made downstream. Unfortunately, many of the same rural people who would have been likely to produce higher-margin value-added products in Mexico have instead emigrated. Perhaps the rise in corn prices due to increased ethanol demand will improve the situation of corn farmers in Mexico.
Other Trade Blocks
Asia-Pacific Economic Cooperation
The Asia-Pacific Economic Cooperation (APEC) is a group of Pacific Rim countries which meet with the purpose of improving economic and political ties. APEC's stated goals are aimed at free and open trade and investments by cutting tariffs between zero to five percent in the Asia-Pacific area for industrialised economies by 2010 and for developing economies by 2020. The organisation has members from four continents, those from North America are Canada, Mexico and the United States.
Caribbean Community
The Caribbean Community (CARICOM) was created "[t]o provide dynamic leadership and service, in partnership with Community institutions and Groups, toward the attainment of a viable, internationally competitive and sustainable Community, with improved quality of life for all". On January 1, 2006 six members: (Barbados, Belize, Guyana, Jamaica, Suriname and Trinidad and Tobago) un-officially ushered in the Caribbean (CARICOM) Single Market and Economy (CSME). At the official signing of the protocol on January 30, 2006 in Jamaica, A further six members: (Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia and Saint Vincent and the Grenadines) announced their intention to join by the second quarter of 2006. Montserrat, a British Oversees territory is awaiting approval by the United Kingdom. Haiti(suspended) and the Bahamas have no immediate plans to join.
Central American Free Trade Agreement
The Central American Free Trade Agreement (CAFTA) is an agreement between the United States and the Central American countries of Costa Rica, Guatemala, El Salvador, Honduras, and Nicaragua. The treaty is aimed at promoting free trade between its members. Canada and Mexico are negotiating membership.
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