Discussion Question 1:
Before NAFTA, the manufacturing firm benefited from lower labor laws as well as a reduction in the cost of real estate in Canada. Also, the company benefited from reduced transportation costs and a lowered cost index ( Government of Canada, 2016) . Also, before NAFTA, the company had an opportunity to invest where there were reasonably low labor and environment standards ( Hakobyan & McLaren, 2016) . Also, the company had a lot of investment decisions since there were no threats to invest, which forced the government to lower labor standards to attract and retain new businesses. A reduction in the labor standards contributed to increased levels of economic performance.
It is necessary to research the company’s records. However, since it is a practice firm, it is appropriate to go off statistics concerning the changes after the establishment and implementation of NAFTA agreement based on the situation provided in the portal ( Next Galaxy, 2016) . Also, before the establishment of the trade agreement, the company benefited by an easy process for transportation of partially manufactured products which will be associated with less strict FDA regulations. According to Hakobyan and McLaren (2016), there are additional sources such as power, capital, and technology, which were available at a comparatively reduced cost, which will make the production cost-effective. Hence, before the establishment and implementation of the NAFTA agreement, the firm was able to increase investment, especially on research and development, which will increase the production cost. However, there were no provisions of anticompetitive practices, especially by monopolies and state enterprises. Also, there were no principles that were set to offer guidance to financial services. Currently, it is very cumbersome for the organization to comply with the set rules and regulation under the NAFTA agreement.
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Discussion Question 2
After the implementation of the NAFTA agreement, the company had greater advantages by establishing manufacturing facilities in Canada. For instance, the agreement provided an opportunity for free trade agreements between Canada, the US, and Mexico. Has such, the key advantages are in the areas associated with transportation as well as trade agreements. The agreement eliminated the barrier of duty on international export and import between the three countries. The company benefited from improved easy market access in the three countries. The next advantage after the establishment of NAFTA was a reduced manufacturing cost. Hence, the agreement improved how the company develops manufacturing centers in Canada. The third advantage is associated with research and development. The company benefits in low cost research and development infrastructure in Canada that persists after the establishment and implementation of the trade agreement ( Hakobyan & McLaren, 2016) . The company also benefits from the availability of a skilled workforce in the field of pharmacy in Canada, which is a greater advantage for the company. Consequently, employees also benefit in an increase in wages due to reduced cost of transportation, flexible taxation, as well as an increase in job satisfaction.
In Canada, there are several researchers in the health and medical field. The medical and health manufactures have customers both in local and international markets. As such, the company will benefit from a reduced cost of manufacturing. Canada is characterized by the low cost of research and development for pharmaceutical products and services ( Hakobyan & McLaren, 2016) . Also, the services are available at a reduced cost for clinical trials and supervision, biomedical research, and product testing. The company will also benefit from easy market access. In this regards, the company will take advantage of the logistics infrastructure with a highly developed transportation system. Therefore, the company will benefit from market access in the pharmacy products and transportation of products which will be cheaper.
References
Government of Canada. (2016). Global Affairs. Retrieved from http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/nafta-alena/questions.aspx?lang=en.
Hakobyan, S., & McLaren, J. (2016). Looking for local labor market effects of NAFTA. Review of Economics and Statistics , 98 (4), 728-741. Retrieved from https://www.mitpressjournals.org/doi/abs/10.1162/REST_a_00587.
Next Galaxy. (2016). Advantages and Disadvantages of NAFTA. Retrieved from http://thenextgalaxy.com/the-advantages-and-disadvantages-of-nafta/.
