Utilising a PEST framework, explore the ways in which your chosen regional organisation shapes the environment for business in that region.

NAFTA

Contents_____________________________________ Page
Executive summary....................................................................................... pg
Introduction..................................................................................................... pg
1.0 Aims and Objectives…………………………………………………………. pg
PEST analysis............................................................................................... pg
2.0 Political ……………....................................................................... pg
2.1 Economical
Agricultural sector in Mexico raised concerns when corn produced in Mexico faced competition from American corn. Mexican consumers began purchasing American corn which meant Mexican farmers could no longer make a sustainable living due to the lack of demand of their produce leading to the displacement of rural farmers which led to the increase in migration in urban centres for people in search of employment. Since the effects of NAFTA, rural to urban migration was inevitable “modernization of Mexico’s economy,” which shifted from rural agriculture to urban manufacturing (Sanchez 2000, Cameron 2005)
Corn dumping has been possible due to the subsidies which the U.S. government give its farmers, “In 2003, U.S. government subsidies to the corn sector totaled $10.1 billion.” (Foreign affairs + international trade, 2004). This has allowed them to sell their produce for less than it cost to produce, giving increased competition to Mexican Farmers. “Farmer in the U.S. sell without corn subsidies at $3.13 and with subsidies it allows them to sell at $2.20” as said by “(Small ,2010)
Approximately 1.3 million farmers (2003) have been displaced in Mexico due to Globalisation; Illegal immigration from Mexico to the U.S. has doubled to 5000,000 from 1996 and 2003. This drastic rise has in some ways helped the U.S. businesses as they are now able to fill lower paid jobs with relative ease; however the loss of so