1. $5 $7 $8 $6 Question #1 Who would you buy your hammer from, an American business, a South American business, an African business or a European business?

2. Question #2 Who would you buy your hammer from, an American business, a South American business, an African business or a European business? $5 $7 $9 $4

3. The United States Congress passes a law stating that any African company that sells hammers in the United States must pay a $2 tax for every item sold. $5 $7 $9 $4 + $2 Question #3 How does this new law affect your decision? Which company will you buy the hammer from now? Question #4 What would happen to the American company if this law were taken away?

4. $5 $7 $9 $4 Something that is made (or grown) in another country and sold in the United States. Import:

5. Something that is made in the United States and sold in another country. Export:

6. $5 $4 + $2 A tax on an item that is made in another country and sold in the United States (an import). Tariff: The purpose of tariffs is to protect American businesses.

7. When countries do not place tariffs on products from other countries. Everyone can trade freely without taxes. Free Trade:

8. Free trade is good for the economy because it lets people buy things for the cheapest possible price, no matter what country they were made in.

9. $5 $4 Free trade can be bad for some American businesses because they cannot compete with foreign companies. Out of Business

10. Think, Pair, Share! Do you think that free trade is a good thing or a bad thing? Who might it benefit? Who might it hurt?

11. Stop and Jot Record your thoughts on the pros and cons of free trade. You have 3 minutes.

12. NAFTA NAFTA The North American Free Trade Agreement (NAFTA) is a free trade agreement between the United States, Mexico, and Canada.

13. NAFTA  NAFTA requires free trade between the U.S., Canada, and Mexico.  These three countries have promised not to put tariffs on each other’s products.  “We won’t tax your stuff if you don’t tax ours.”

14. Play video

15. Hola! Me llamo… oh, lo siento. I mean, Hi! My name is Gabriela, and I am going to tell you all about what happened to my family following the North American Free Trade Agreement.

16. My grandfather used to own a huge corn farm, and when he died, he left it all to my father, Hector. For awhile, we made a lot of money off of the corn farm. Look, there’s a picture of my dad! Question #1: What kind of technology is Gabriela’s father using to harvest the corn?

17. Corn is very important to the culture of Mexico. Here, we use corn in a variety of traditional foods. Question #2: How is corn important to the culture of Mexico? What traditional foods does it provide?

18. Things were good for my family. We were making lots of money because stores from all over Mexico were buying our corn and selling it in different stores. There were basically no rules about how much we could pay the workers on our farm, so we were able to produce corn quickly and cheaply. Question #3: This was before NAFTA was created in 1994. What do you think is going to happen with Mexico opens trade with the United States?

19. Then, in 1994, the United States, Mexico and Canada signed the North American Free Trade Agreement. This meant that now we could import goods and export goods without tariffs! We were hopeful because we thought we could sell a lot of corn to Americans, too, and expand our market! Question #4: What is a tariff? Question #5: Why might NAFTA be good for growing businesses in Mexico?

20. We were excited, but what we didn’t realize is that there are a lot of corn farmers in the United States. And even though we could produce it a lot cheaper in Mexico, the U.S. Government was watching out for THEIR best interest!

21. Question #6: What region of the United States sells the most corn?

22. In MexicoIn the United States It costs $4 to export 1 lb of corn It costs $6 to export 1 lb of corn You see, we were so happy because it costs less for Mexico to export corn, so we thought the U.S. would be our biggest customer! Instead…

23. The U.S. government gave subsidies to farmers. This is a payment so that they will lower their prices. In MexicoIn the United States It costs $4 to export 1 lb of corn It costs $6 to export 1 lb of corn It STILL costs $4 to export 1 lb of corn It only costs $3 to export 1 lb Gee, thanks.

24. In MexicoIn the United States It costs $4 to export 1 lb of corn It costs $6 to export 1 lb of corn It STILL costs $4 to export 1 lb of corn It only costs $3 to export 1 lb Question # 7: Who would you rather buy corn from, Mexico or the United States? Why?

25. Even Mexico now buys corn from the United States. Now my family does not have very much money. My father had to send all of the workers home because he could not afford to employ them. Question #8: How does NAFTA affect Gabriela and her family?

26. But, good news! My father’s sister, Aunt Elsa, just moved to the United States. She says that we can move up there and stay with her while my dad finds new work. He thinks maybe he can work on a farm and someday own his own farm again. Question # 9: How might the United States’ booming economy affect immigration from Mexico to the United States?

27. Question #10: What are the advantages and disadvantages of the North Atlantic Free Trade Agreement? Back up your answers with evidence from today’s lesson. Minimum: 6 sentences. We will be sharing!

28. HSA Drill #1 2008, Question 31 Which of these is the main economic cost of the federal government removing taxes on imported goods? A. a decline in the number of people who visit the United States B. a reduction in the number of countries willing to trade with the United States C. a reduction in the ability of United States businesses to compete with foreign companies D. a decline in employment opportunities for United States workers with foreign companies

29. HSA Drill #2 2006, Question 39 Why did the United States government most likely sign the North American Free Trade Agreement (NAFTA)? A. to expand the economy B. to establish a military alliance C. to provide direct funding to foreign countries D. to improve the transportation system between member countries

30. HSA Drill #3 2004, Question 9 “If a foreign country can supply us with a product cheaper than we ourselves can make it, better buy it from them.” -Adam Smith, Wealth of Nations Based on the excerpt, which of these government actions would the author most likely support? A. raising taxes on imported goods B. entering into free trade agreements C. increasing wages paid to workers D. passing strict regulations on businesses