Naphtha - what is it? North American Free Trade Area.

Lecture 5 North American and Latin American economic regions

Time – 2 hours.

Lecture questions:

1. general characteristics North American group of NAFTA countries.

2. Characteristics of the economies of the leading countries of North America: USA, Canada, Mexico.

3. General characteristics of the South American groupings of the MERCOSUR and CARICOM countries.

4. Characteristics of the economies of the leading countries of Latin America: Brazil, Argentina, Venezuela.

Question 1 General characteristics of the North American group of NAFTA countries

North American Free Trade Agreement(NAFTA, English North American Free Trade Agreement, NAFTA; French Accord de libre-échange nord-américain, ALENA; Spanish Tratado de Libre Comercio de América del Norte, TLCAN) - free trade agreement between Canada, the United States and Mexico , based on the model of the European Community (European Union). The NAFTA agreement was signed on December 17, 1992 and entered into force on January 1, 1994.

In light of the integration processes that took place in Europe and Asia in the 1980s, the importance of the issue of creating NAFTA increased, as it became clear that the answer to the unification of Europe should be the unification of America and, as part of it, North America. However, from the very beginning, Mexico, Canada and the United States viewed the role and potential of NAFTA from different perspectives.

The agreement establishing the North American Free Trade Association (NAFTA) came into force on January 1, 1994, preserving and reaffirming the 1988 Canada-United States Free Trade Agreement (CUSFTA).

If in the EU integration processes proceeded from top to bottom (from governments and government agencies), then in North America - from the bottom up, that is, from the desire for cooperation at the micro level (between American and Canadian corporations) to cooperation at the macro level.

Unlike the agreements underlying European integration processes, the NAFTA agreement does not cover issues related to social sphere, such as employment, education, culture, etc.

Goals. The main purpose of NAFTA is to remove barriers to trade and investment between the United States, Canada and Mexico. While the European Union is based on the concept of federal politics with the distribution of power between its organs - the Council, the Commission, the Parliament and the Court of Justice, on the one hand, and the member states on the other, NAFTA builds integration on the basis of confederal ties between independent sovereign states. Trade interactions in each of these states are supported by autonomous decision-making bodies within the framework established by NAFTA. Goals of NAFTA:

Elimination of customs and passport barriers and stimulation of the movement of goods and services between the countries participating in the agreement;

Creating and maintaining conditions for fair competition in the free trade zone;

Attracting investments to the member countries of the agreement;

Ensuring proper and effective protection and protection of intellectual property rights;

Creation of effective mechanisms for the implementation and use of the Agreement, joint dispute resolution and management;

Creating a basis for future trilateral, regional and international cooperation in order to expand and improve the Agreement;

Creation of a single continental market.

Main characteristics of NAFTA

Like other regional integration blocs, NAFTA was organized with the aim of expanding economic ties (primarily mutual trade) between the participating countries. By prohibiting member states from discriminating against mutual supplies of goods and investments, NAFTA establishes protectionist rules against outside producers (particularly in the textile and automobile industries).

Economic integration in North America is different from integration in Western Europe and Asia, based on the coordinated regulatory activities of many highly developed countries.

In other regions, integration was carried out from the top down, with intergovernmental agreements stimulating business contacts different countries. In NAFTA, on the contrary, the integration process proceeded “from the bottom up”: first, intercorporate ties reached a high level, and then, on their basis, interstate agreements were adopted.

Within NAFTA, unlike the EU and APEC, there is only one center of economic power - the United States, whose economy is several times larger than Canada and Mexico combined. This monocentricity makes governance easier (the leading country can easily impose its decisions on weaker partners), but at the same time creates an environment of potential conflicts (US partners may be dissatisfied with their subordinate position). Moreover, integration appears to be one-sided: Canada and Mexico are closely integrated with the United States, but not with each other.

NAFTA has a clear organizational structure. The Free Trade Commission is the central institution of NAFTA. This body oversees the implementation and further development of the Agreement and helps resolve disputes that arise between countries. She also oversees the work of more than 30 NAFTA committees and working groups.

The trade ministers of the participating countries agreed that the Commission would be assisted by the NAFTA Coordinating Secretariat (NCS), the creation of which was planned for the end of 1997. The Secretariat is intended to serve as the official archive of NAFTA's work and serve as the Commission's working secretariat.

NAFTA provides further work to assist in achieving the creation of a free trade area. In accordance with the Agreement, more than 30 working groups and committees were created to promote trade and investment, ensure the effective implementation of NAFTA regulations and their administration. The main areas in which normative work is being undertaken include the origin of goods, customs, agricultural trade and subsidies to this area of ​​the economy, product standardization, government procurement and movement business people across borders. These working groups and committees report annually to the NAFTA Commission.

NAFTA working groups and committees also help smooth the implementation of the agreement and provide a forum for exploring ways to further reform trade among participating countries. In addition, NAFTA working groups and committees are discussing controversial issues arising between countries at an early stage of their development, in order to avoid lengthy dispute resolution procedures.

Currently most of trade carried out in North America is subject to established standards NAFTA and the World Trade Organization (WTO). But still, controversial issues arise in the field of trade, while NAFTA advocates the friendly resolution of disputes between states whose interests are affected, through NAFTA committees and working groups or other bodies. NAFTA provides for a quick and effective review of the problem by a group of experts if the parties do not find a mutually beneficial solution to the problem.

Dispute resolution is the responsibility of the Canadian, American and Mexican national sections of the NAFTA Secretariat.

To resolve investment-related issues, NAFTA uses "mixed" arbitration procedures between the injured investor and the government concerned, based on the general procedures established by the Canadian Foreign Investment Protection Treaties and the World Banking Center for Investment Dispute Resolution.

Due to the integration processes that took place in Europe and Asia in the 1980s, the issue of creating NAFTA became more acute, as it became clear that the answer to the unification of Europe should be the unification of America, and, as part of it, North America. However, from the very beginning, Mexico, Canada and the United States viewed the meaning and potential of NAFTA from different perspectives.

The agreement establishing the North American Free Trade Association (NAFTA) came into force on January 1, 1994, preserving and confirming the Canada-United States Free Trade Agreement (CUSFTA) of 1988. The main purpose of NAFTA was to remove barriers to trade in goods between participating countries. Half of the barrier restrictions were lifted immediately, the rest were removed gradually over 14 years. This agreement was an expansion of the 1989 trade agreement between Canada and the United States.

Unlike European Union, NAFTA did not set out to create interstate administrative bodies, nor did it set out to create laws that would govern such a system. NAFTA is only an international trade agreement within the framework of international law.

NAFTA's goals include:

removing barriers and stimulating the movement of goods and services between the countries participating in the agreement;

creating and maintaining conditions for fair competition in the free trade zone;

attracting investments to member countries of the agreement;

ensuring proper and effective protection and enforcement of intellectual property rights in the Zone;

creation of effective mechanisms for the implementation and use of the Agreement, joint dispute resolution and management;

establishing a basis for future trilateral, regional and international cooperation in order to expand and improve the Agreement.

Economic impact of NAFTA on the United States. The United States received significant benefits as a result of this agreement:

in the vast majority of industries, barriers against foreign manufacturers from NAFTA partner countries were gradually minimized, which made it possible to purchase many goods from them cheaper than in the United States itself;

American companies had much greater opportunities to access the markets of neighboring countries, which expanded the sales market.

US participation in the regional integration process has become a powerful factor in the long-term positive impact on domestic economic development.

The total trade turnover with Mexico in 1993–1997 alone increased almost 2.5 times (from 80.5 billion to 197 billion), with Canada - almost 2 times (from 197 to 364 billion). Both of these countries account for a third of US foreign trade. In the early 2000s, the average annual increase in trade turnover with Mexico was more than 20%, with Canada - 10%. Duty-free status has now extended to two-thirds of all US exports to the region, and these opportunities continue to expand. The United States needs such regional economic integration to improve its competitiveness vis-à-vis its major economic rivals, the EU and Japan.

At the same time, various environmental and labor groups in the United States, as well as many members of the US Congress, fear the movement of American business activity to Mexico, with its low labor and environmental standards. In addition, Americans are afraid of the increasing flow of immigrants from Mexico since the 1990s, which in the 2000s already reached 300 thousand people a year. Such “Latin Americanization” of the United States seems to many Americans to be a threat to their civilization, based on the values ​​of Protestant European culture.

Mexico's role in NAFTA. For Mexico, membership in NAFTA means guaranteed access to the American market, which absorbs approx. 80% of all Mexican exports, increased influx of foreign investment. The desire for economic integration with the United States became the impetus for the neoliberal reforms undertaken by the Mexican government in the early 1980s, abandoning the import-substitution development strategy.

Through regional unification with the United States, Mexico began to gradually integrate into the global economy. Of particular importance to her was also the positive resolution of the issue of external debt after significant financial losses incurred in the 1980s: the Mexican government obtained large loans from the United States to implement free trade agreements. Many foreign companies began to move their activities to Mexico in order to penetrate the American and Canadian markets. Foreign direct investment in Mexico doubled between 1993 and 1999 alone.

Participation in NAFTA has turned Mexico into a program of trade liberalization and economic restructuring that makes future withdrawal difficult and a return to economic self-sufficiency virtually impossible.

Canada's role in NAFTA. Canada is an objectively stronger NAFTA member than Mexico, but weaker than the United States. Therefore, Canada is inclined to block with Mexico when defending its interests in order to put pressure on Washington. In the early 1990s, Canada relied on Mexico's support to counter US protectionist actions. In turn, Mexico received Canadian support in 1995 when it turned to the IMF and World Bank when there was a need for urgent intervention to save the Mexican peso.

Canada actively advocates expanding the free trade zone, considering Chile, as well as Colombia and Argentina, as the top candidates for joining the bloc. Demonstrating their independence and determination, the Canadians said they would not wait for the Americans, and in 1996 they entered into a bilateral free trade agreement with Chile modeled on NAFTA, as well as two additional ones on regulation labor relations and about protection environment– modeled on the corresponding tripartite agreements of 1993 between Canada, the United States and Mexico. Canada has concluded various bilateral agreements with many Latin American countries on certain issues of economic cooperation, and persistently promotes the idea of ​​integrating NAFTA with MERCOSUR. Canada's most in an active way joined in the implementation of the plan to create the FTAA. In 1998, she began to chair the negotiations to conclude this agreement, which was declared a priority of Canadian policy in the region.

Thus, in just one decade, Canada has transformed from a rather passive observer to a full and active participant in multilateral processes and activities of the countries of the region. At the same time, Canadians act in their traditional role of mediator between countries with different levels of economic development and different ideological orientations.

In 2000, exports to the United States accounted for approximately 33% of Canada's total GDP, compared to 15% in 1989. The connection to the American market became especially strong in the two largest provinces of Canada in terms of population and economic potential - Ontario (the share of exports to the United States is 40% gross product) and in Quebec (24%).

NAPHTHA- a comprehensive regional agreement uniting three countries located on different levels economic, social and political development; regulates their relations in various aspects - trade in goods and services, investment cooperation, protection of intellectual property, ecology. The agreement was signed in 1994 with the goal of smoothly reducing trade barriers in various sectors of the US economy. Canada and Mexico to ensure and facilitate access of goods and services to the markets of the participating countries and formally meant a single continental free trade system. NAFTA is a free trade zone, all conditions of which apply only to NAFTA members, and in relation to third countries, each state develops an independent foreign economic policy.

North American Free Trade Area (NAFTA)

TO beginning of XXI V. All continents of the earth have their own integration blocs. Let's look at some of them.

North America is embraced by integration within NAPHTHA— North American Free Trade Area. The Canada-United States-Mexico Agreement came into force on January 1, 1994. The phenomenon of the alliance is the association of two developed countries with a relatively backward country. During the period of signing the agreement (1992), the average annual average in the USA was 23.2 thousand dollars, in Canada - 20.7 thousand dollars, in Mexico - 3.5 thousand dollars (or 6.6 times lower than in the USA).

The initiator and leader of the association is the United States, which combined its financial and innovative power with the rich natural and cheap labor resources of Mexico and fundamentally expanded the markets for American competitive products. American ones permeate all of North America. Not the least role is played by the geopolitical ambitions of the United States, which views Mexico as a gateway to Latin America - the start of the creation of a Pan-American free trade area covering the entire American continent (FTAA).

Mexico's benefit is that the flow of capital flowing from the United States, especially direct investment, made it possible to restructure the economy and gave impetus to the development of infrastructure (roads, bridges, telecommunications, etc.). Specific gravity American TNCs in the total amount of foreign investment amounted to approximately 2/3. In northern Mexico, the main economic units were “maquiladoras” - assembly plants of American multinational corporations. This allowed Mexico to sharply increase export volumes finished products in USA. The US share of Mexican foreign trade has risen to 90%. Every year, up to 500 thousand Mexican braceros enter the United States. Their financial transfers to their homeland reach $10 billion a year, which is comparable to Mexico's income from oil exports.

However, there were also losses: the ruin of small producers, a sharp drop in the exchange rate of the peso, and increasing dependence on the conditions of the American market. The currency crisis was overcome with an emergency loan issued under US pressure.

The Canada-US free trade area was created back in 1988. The creation of NAFTA increased trade turnover between Canada and Mexico, but the asymmetry of their relations and the dominant position of the United States still remain.

NAFTA has not created supranational governance structures like . The institutional structure of NAFTA includes a number of commissions and committees, the main of which is the Free Trade Commission at the level of the trade ministers of the three countries.

The terms of reference of the tripartite agreement include:

• eliminating barriers to trade in goods and services;
• creation of a system for the protection of intellectual property rights;
• liberalization of investment flows (non-discriminatory regime);
• formation of a mechanism for resolving disputes between member countries.

The reduction of tariffs occurs in stages, with the preservation of protectionist measures for “particularly sensitive goods” in each country. There are still exceptions to free trade rules, especially for agricultural products. So, Mexico protects against imports domestic production beans, USA - vegetables and fruits, Canada - dairy products. Exemptions in the service sector include transportation (air, sea, land), radio broadcasting, healthcare, legal services and some others.

It is important that NAFTA establishes general rules determining the country of origin of the goods. This is a country where the product has undergone significant processing, and the share of local components is not lower than 50%.

The agreement does not provide for the creation customs union, although it includes elements that go beyond the Free Trade Area.

11.1. Background and history of the creation of NAFTA

The association is one of the world's largest regional free trade zones with a territory of 21.78 million km 2 and a population of more than 450 million people. and a total GDP of about 16.5 trillion US dollars in 2008 (at the time of formation, 390 million people and 8.04 trillion dollars, respectively).

The agreement on the creation of NAFTA is the result of more than half a century of movement of these countries, and especially the USA and Canada, towards trade, economic and political unification (Table 1). Throughout the 20th century. economic boundaries between USA and Canada through relative liberalization of the movement of goods, capital and labor. A qualitative change in economic relations between the United States and Canada occurred in 1988, when the American-Canadian Free Trade Agreement (FTA) was concluded at the interstate level, designed to provide Canadian goods with guaranteed and privileged access to the US domestic market.

Table 1. Stages of development of trade and economic relations in North America

	Agreement	main idea
	Adoption of the Abbott Plan	Stimulating US investment in leading sectors of the Canadian economy
	Agreement on joint military production	Introduction of American standards into Canadian production of military equipment
	Agreement on the Liberalization of Trade in Automotive Products (Avtopact)	Stimulating the integration of many other industries. The desire to liberalize the goods and capital markets
Late 1970s	Line for organizing a trade and political unification of the United States. Canada and Mexico	Initially, an energy union of three countries. Since 1979, the prospects for creating a North American Free Trade Area have been studied
	US-Canada Free Trade Agreement (FTA)	Formation of a free trade zone between the two countries within 10 years
1992 (1994)	The Agreement establishing the North American Free Trade Area (NAFTA) was signed (entered into force)	Formation of a free trade zone in goods between the three countries, consideration of issues of trade in services. investment movements, intellectual property rights

Features and main activities of NAFTA

Key provisions of the NAFTA agreement (Table 2):

• Phase out all customs duties on goods traded between the United States, Canada, and Mexico by 2010.
• Easing the regime for North American capital in Mexico.
• Liberalization of the activities of American and Canadian banks in the financial market in Mexico.
• Protecting the North American market from the expansion of Asian and European companies trying to avoid US tariffs by re-exporting their goods to the US through Mexico.
• Creation of the American-Canadian Arbitration Commission.

The agreement establishing NAFTA assumes that participating countries maintain national customs tariffs in trade with third countries. But in mutual trade, after a transition period of 10 (in some cases - 15) years, in this economic zone there should be free circulation of goods that qualify as manufactured in the USA, Canada and Mexico. Implementation of the agreement will lead to the elimination of all tariff and non-tariff barriers to trade. It is envisaged to improve trade in services, establish fair rules for mutual investments and public procurement, strengthening the protection of intellectual property rights, creating a mechanism for resolving disputes.

Table 2. Key provisions of the NAFTA agreement

Aspects entrepreneurial activity regulated by the NAFTA agreement	Key points of the Agreement
Access to markets	Eliminate all customs duties on goods traded between the United States, Canada and Mexico by 2010. The gradual elimination of a significant number of non-tariff barriers to trade in goods and services. Protecting the North American market from the expansion of Asian and European companies trying to avoid US tariffs by re-exporting their goods to the US through Mexico
Investments	Easing regime for North American investment in Mexico. Liberalization of the activities of American and Canadian banks in Mexico. Five basic principles for the protection of foreign investors and their investments in the free trade zone: non-discriminatory treatment; removal of special requirements for investments or investors; free movement of financial resources related to investments; expropriation only in accordance with international law: right to appeal to the International Court of Justice in case of violation of the Agreement
State procurements	Establishing fair rules for public procurement
Intellectual Property Rights	Strengthening the protection of intellectual property rights. A universal approach to preventing non-competitive and monopolistic actions has been defined. Establishes the world's highest standards for protecting intellectual property rights, including copyrights, patents and trademarks
Dispute Resolution	Establishment of a US-Canadian Arbitration Commission and Dispute Resolution Mechanism
	Improvement and development of trade in services. NAFTA covers all types of services, including financial
Temporary entry for businessmen	Relocation of business representatives

At the same time, NAFTA establishes protectionist rules against off-continental producers in the textile and automobile industries.

While eliminating tariffs and other protectionist barriers, NAFTA has a number of limitations (exceptions):

• Installs restrictive trade regulations a number of goods and investments in some sectors of the economy, especially “sensitive” to foreign competition, and differences in tariff reduction schedules. It refers to agriculture, energy, automotive products, textiles. In the Agreement, all goods are divided into three large groups— industrial (excluding textile goods), agricultural and textile products, including clothing. Duty reduction schedules have been developed for each group, and immediate removal of duties has been provided for and implemented for a number of industrial goods.
• Contains clauses to temporarily restore protection to industries harmed by imports of affected products.
• Contains exceptions to the free trade regime. Thus, the following remain: Mexico's right to prohibit foreign activities in the oil sector: Canada's right to protect certain culturally important sectors (radio broadcasting, production of films, records, books, etc.); US right to support domestic prices and maintaining the agricultural commodity procurement system.

Differentiated conditions for trade liberalization are also provided for individual countries participating in the integration bloc. For example, Mexican tariffs on imports of American manufactured goods were eliminated within 10 years. Approximately half of the Mexican tariffs were eliminated when the Agreement entered into force. Subsequently (within five years), up to 70% of all goods from the United States were imported into Mexico duty-free. For its part, Mexico received easier access to most of the North American market; The removal of duties within five years covered almost 90% of industrial products.

At the same time, tariffs on a small number of products “sensitive” to American industry were not eliminated until almost the end of the 15-year period. Tariffs on trade between Mexico and Canada were also phased out over 10 years. In mutual trade between the United States and Canada, there was an agreement not to change the tariff reduction schedules previously developed within the framework of a bilateral agreement between them in 1989.

conclusions

NAFTA does not have permanent supranational bodies. As a rule, all decisions are made by the highest officials partner states. The main provisions of the Agreement boil down to the elimination of tariff barriers to trade in goods and services between the United States, Canada and Mexico.

The NAFTA agreement had a constructive impact on the economic relations of the participating countries. The treaty aims to liberalize relations between the United States and Mexico and between Canada and Mexico, as relations between the United States and Canada were liberalized within the framework of a bilateral free trade area created in 1988.

The provisions of the Agreement in the field of investment cooperation establish a non-discriminatory regime for investors of participating countries when creating enterprises (FDI), acquiring companies, their expansion and management. Investors have the right to repatriation of profits and capital, to receive fair compensation in the event of expropriation, and to settlement of disputes in government arbitration. This removal of barriers has led to a significant increase in investment within NAFTA.

The main sources of investment in NAFTA are. Their activities are concentrated mainly in knowledge-intensive industries (in the USA and Canada) and in manufacturing (in Mexico). As a result of the Agreement, the volume of mutual investments in the period 1994 to 2008 increased 6 times. Investment cooperation was carried out according to the USA - Canada, USA - Mexico scheme.

The sectoral structure of mutual investments in the USA, Canada and Mexico is different. Mutual FDI from the United States and Canada, like other developed countries, is mainly concentrated in the services sector - banking and finance, while in Mexico these countries invest predominantly in the manufacturing sector.

Have a positive impact on the economy of the host country only if there is a clear and competent government program for interaction with foreign investors. In the absence of such a program, FDI may negatively impact the country's future economic growth.

Integration under NAFTA greatly contributed to the development of trade, specialization of production and the introduction modern technologies in various sectors of the economy. Intrazonal trade grew at a faster rate than US, Canal, and Mexican trade with other countries. NAFTA also contributed to the process of integration in the services sector (financial sector, trade, transport, health care and communications) and in matters of intellectual property protection.

The asymmetry of NAFTA development includes the asymmetry of: the industrial potential of the participating countries, resulting from the fact that the United States accounts for about 85% of GDP and industrial production three countries; levels of development between highly developed countries (USA and Canada) and developing Mexico; intensity of bilateral economic relations (USA - Canada, US - Mexico); lack of mature economic relations between Canada and Mexico.

The United States considers Latin American countries to be one of the priority areas for the development of integration processes with the participation of NAFTA. NAFTA in the future could become the basis of a future Inter-American Free Trade Area (IFTA), the creation of which has been postponed for now. The Caribbean and Central American regions are now more integrated within NAFTA than with their grouping partners, not only along the lines of trade and finance, but also at a deeper level of industrial integration.

The term "naphtha"

Naphtha is a mixture of liquid carbohydrates, which is obtained by oil refining. 15-18% of the finished product is obtained from the initial raw materials. Naphtha is also called naphtha in another way. It appears as a yellow liquid that is insoluble in water. Previously, naphtha was used as a fuel for tractors, but due to their transition to diesel, it lost this use.

The term "Naphtha" was first attributed to Pliny the Elder in the first century AD and the product was used exclusively by alchemists, who defined liquids with low temperatures boiling. Karl Benz used naphtha as a fuel in his first automobile journey. In addition, the product was sold as a cleaning product in pharmacies.

Naphtha is heavier than gasoline, but lighter than kerosene. Varieties of naphtha may differ from each other in the following characteristics: density, content of olefins, paraffins, naphthenes, isoparaffins, sulfur, aromatics, Rhine vapor pressure, the amount of additives that contain oxygen, and the amount of mercury.

Currently, the main use of naphtha is as a feedstock in the petrochemical industry for the production of olefins. Naphtha is used as an additive for the production of gasoline, and also as a raw material for the production of high-octane additives. In fact, it is a component of gasoline, jet fuel, and lighting kerosene. Also used as diesel fuel, a solvent in the paint and varnish industry, as gasoline for some types of lamps, for removing greasy stains and caruration of air. Naphtha extract is used as a filler for liquid instruments such as monometers.

Straight-run naphtha is used for aviation kerosene and gasoline. This is a straight-run petroleum distillate that does not contain olefins and has a boiling point of 170 to 240 degrees Celsius.

Highlight the following types naphtha in production:
- light naphtha – without olefins;
- light virgin naphtha is light straight-run naphtha;
- heavy naphtha is heavy naphtha;
- full range naphtha – this is unrefined naphtha;
- naphtha open specification – quality characteristics are not well defined.