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Closing Case Martin's "Jtiles Website — http://www.mac.doc.gov/nafta/nafta2.htm Case Discussion Questions
Internet Exploration Question This case focuses on a dilemma facing John Martin, the CEO of Martin Textiles, a New York based textiles company. The case begins on August 2, 1992, the day that the U.S., Canada, and Mexico agreed in principle to the North American Free Trade Agreement (NAFTA). Martin Textiles is a family business, and was started by JohG great-grandfather in 1910. Today, the company employs 1,500 people in three New York facilities. John's dilemma, which is particularly troublesome to him because he feels a sense of loyalty to his company's longtime employees, is this. NAFTA will remove all tariffs on the trade of textiles between the U.S., Canada, and Mexico within 10 years. Textiles manufacturing is a low-skilled, labor-intensive business. As a result, the simple economics of the industry suggests that the under the auspices of N7aA, the majority of textile manufacturing in the U.S. will move to Mexico, where wage rates are considerably lower than in the U.S. When he first realized the full implications of the NAFTA agreement, John thought to himself, "My God! Now I'm going to have to decide about moving my plants to Mexico." John dilemma is how to cope with this realization. If he moves his plants to Mexico, he'll have to let go many of his loyal employees. If he doesn't move, he risks going out of business. V Undoubtedly, this same type of dilemma confronted many businesses when NAFTA was announced and is still confronting businesses today. For companies that have questions about any aspect of the NAFTA agreement, the U.S. Department of Commerce has setup a website called the "NAFTA Homepage" at {http://www.doc.doc.gov/nafta/nafta2.htm}. Spend some time navigating this site and then answer the following questions. First, has thsepartment of Commerce done a good job setting up a mechanism for U.S. companies that have complaints about access to Mexican or Canadian market to get their complaint heard? If so, how does the process work? Second, does the website provide up-to-date information about the implementation of the NAFTA agreement? If so, what is something that has occurred in regard to NAFTA recently? Finally, read the material that is available through the link at the bottom of the site entitled, "NAFTA: What it MeK for U.S. Consumers." Is there anything in this information that surprised you about the impact of NAFTA since the agreement went into effect? If so, what was it? |
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