2 As a result of the North American Free Trade Agreement NAF

2) As a result of the North American Free Trade Agreement (NAFTA), many iconic \"American\" cars are not assembled in the United States. Explain why. Provide some examples of U.S. cars that are assembled outside of the United States. 95

Solution

After NAFTA many US cars are assembled outside the US namely Mexico because the labor cost and the wages are cheaper there. A low wage rate allows the companies to benefit from the lower manufacturing cost and ensure them a better profit. For example, a car assembled in Mexico will cost much lesser than a car manufactured in the US. as the wages in the US are much higher than in Mexico.

DODGE and FORD cars are few examples of cars that are not manufactured in the US but are US companies.