Currently, the United States is regionally integrated with Mexico and Canada through the North American Free Trade Agreement (NAFTA), which was replaced by the United States–Mexico–Canada Agreement (USMCA). “The USMCA agreement also mandates that by 2023, 40 percent of parts for any tariff-free vehicle must come from a so-called high-wage factory. Those factories must pay a minimum of $16 an hour in average salaries for production workers, which is about triple the average wage in a Mexican factory right now” (Hill, 2022, p. 295). Is this a good idea? Why or why not?
Currently, the United States is regionally integrated with Mexico and Canada through the North American Free Trade Agreement (NAFTA), which was replaced by the United States–Mexico–Canada Agreement (USMCA). “The USMCA agreement also mandates that by 2023, 40 percent of parts for any tariff-free vehicle must come from a so-called high-wage factory. Those factories must pay a minimum of $16 an hour in average salaries for production workers, which is about triple the average wage in a Mexican factory right now” (Hill, 2022, p. 295). Is this a good idea? Why or why not?
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Currently, the United States is regionally integrated with Mexico and Canada through the North American Free Trade Agreement (NAFTA), which was replaced by the United States–Mexico–Canada Agreement (USMCA). “The USMCA agreement also mandates that by 2023, 40 percent of parts for any tariff-free vehicle must come from a so-called high-wage factory. Those factories must pay a minimum of $16 an hour in average salaries for production workers, which is about triple the average wage in a Mexican factory right now” (Hill, 2022, p. 295). Is this a good idea? Why or why not?
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