What is NAFTA?

business economy

The North American Free Trade Agreement (NAFTA) is one of the most powerful and wide-reaching treaties in the world. It governs the entire spectrum of North American trade and has at its roots hemispheric cooperation on a scale never before seen.

NAFTA is a treaty between Canada, Mexico, and the United States that was designed to foster greater trade between the three countries. NAFTA has been in effect since 1 January 1994. It has since been updated with two major additions, the North American Agreement for Economic Cooperation (NAAEC) and the North American Agreement for Labor Cooperation (NAALC). A very recent addition was the Security and Prosperity Partnership of North America, designed to foster cooperation on issues of national security.

One important thing that NAFTA did right away was to eliminate a large number of tariffs on goods shipped between the three countries. American goods, mostly, were being sold to Canada and especially to Mexico and carried with them a high tariff. Mexico and Canada did not wish to pay the tariffs, so the goods were not sold in North America. Prime examples of these goods were cars, car parts, computers, and food.

As a result of NAFTA, Mexico especially has purchased goods from the US in much greater numbers than before. This saves Mexican companies money on imports, and it saves American companies money on export shipping costs. Canada has benefited in this way as well, although not nearly to the extent that Mexico has.

One prime benefit of NAFTA is that goods shipped between the three countries have labels printed in three languages: French, Spanish, and English. The English is for Canada and the US, the Spanish is for Mexico, and the French is for Quebec and other French-speaking parts of Canada. Another prime benefit, at least for Mexico, is that the NAFTA agreement ostensibly also encourages greater immigration between the three countries. In recent years, the increased immigration from Mexico to the US has become even more of a flashpoint than it had been previously. The same sort of relationship does not exist between Canada and the US or between Canada and Mexico.

Many observers consider NAFTA to be the same sort of economic and political union that the European Union (EU) is. This is both true and untrue. The EU, like NAFTA, is an economic union that fosters greater trade and cooperation between a large handful of the countries of Europe. EU members, however, have a common currency, while NAFTA members do not. Also, the EU has a political element and its own government, neither of which NAFTA has.

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Reply to: anon25696

I work for Perot Systems corporation, owned by Ross Perot and Ross Perot Jr. Let me tell you something, he outsources too. Our technical support department, and many other jobs have been shipped overseas to India. So shame on Ross Perot too!!! For not backing his words, with actions.

- anon26094
Ross Perot said don't pass NAFTA or we will regret it. What you will hear is a giant sucking sound of jobs heading out of the United States. People made fun of Ross Perot's big ears but Ross was right and the stupid people didn't believe him, they believed a republican. Shame on you people. Look at the following real close If we keep buying foreign, where will our children work !!!!
- anon25696
Yes, the earth has already been divided into ten territories. We are witnessing the stage of the development where a leader is being assigned to each territory/trade zone. Once this Viceroy/king has been selected for each zone/territory they will submit to a parliamentary board....and the New World Government will then be born. The NAFTA zone is now attempting to equalize it's economy and the economic status quo of all of it's people. This is the reason why the US and Canada is having so many economic problems. Another reason is to intentionally reduce the values of our currencies. We now truly do hear talk of a new currency called the Amero being chosen to mainstream all three of our currencies. Eventually one single currency will dominate worldwide, as will one government and one religion......just like the prophet foretold 2000 yrs ago!
- hldowless
Americans and Canadians can just get ready for the obvious; the earth has already been divided into ten areas or territories. We all know them as free trade zone areas. Look all of this up on line. Look to the Euro zone for a hint of NAFTA'S future aspirations. NAFTA is just one horn on the dragons head right along with nine others. Soon NAFTA or the NAA WILL have an appointed president or Viceroy. Nafta will soon be a nation and the three nations simply states. Our government will be Socialist with the Government owning all real estate. That is the real reason for the volatility in the job stability and the job market at large.
- anon23191
The Canadian economy my now be around 6.1 % but we are not talking about the loss of 3 million jobs in the 1990's. These are jobs that never came back, largely in the manufacturing area. These are jobs lost forever bc of the NAFTA agreement. So don't site 6.1% bc that is now after tremendous hardship from the 90's the worst unemployment rates and job losses ever even worse than the 1929 stock market crash. Your lack of knowledge of history is appalling anon14469!!!!!!!!!
- thomas101960
It sounds as though the US needs to abolish NAFTA! The US needs to support made in AMERICA..and let Canada do the same! The imports are killing our Economy as well as Canada's. Greed needs to be realized here. Of course American made products will have to deal with the union wages (or NOT) and then price and produce accordingly. Right now our entire auto industry is suffering from both greed and imports. Many Americans do not understand the way of life in these Countries that have workers who will work for Half of what American workers work for! To begin with in many foreign countries owning a home is not a way of life, up to 15-20 people live together! to save money. They do not feel that they need time off for family, holidays or anything else..they work all the time. work is the only thing that matters to them. While in the US Americans want to live and work. Living to Americans means owning a home, having a job and spending time with their families when they are not working. Canada as well as the US needs to get back to self sufficiency! Certainly at our inception we were able to stand on the premise of "Give me your poor, hungry, and down trodden" We are now given out! We need to slam the door on any further assistance to anyone anywhere and not allow any more people into the US until we get our house in order. We have gotten to the point that we cannot feed, house, employ, or keep safe our own people. America is starting to look like the spoils After a huge raid and that is what under developed Countries have done..taken and taken until they are now built up and we are horribly struggling. This is not to say that those in charge of our commerce have not been greedy and should be handled for their greed. Not jailed, just all of the money that was greedily taken from their companies returned by our government. It needs to happen now. And the US is not the only place this is happening. Look into places like DUBI where they actually have solid gold bathroom fixtures, solid gold dog houses! While their people are starving. NOT a single penny should go to any Country with that sort of greed going on!
- anon21855
What are the major set-backs and other drawbacks that might be surfacing from the progression of NAFTA?
- anon19826
The unemployment rate in Canada, according to government statistics, is 6.1%. This, although slightly higher than America's unemployment, is still a low rate. A lot of people are constantly complaining about the supposed disastrous effects that free trade and outsourcing will have on American and Canadian workers, but this doesn't hold up to the facts. The American unemployment rate has held steadily low, while the Canadian unemployment rate has actually been going down. (Just Google "Canadian Economy" and the official government site is the first listing.)
- anon14469
The NAFTA agreement when it came into Canada caused the loss of 3 million jobs in Canada almost overnight. This was the worst downturn in the Canadian economy in its entire history! This would be the equivalent of 30 million people out of work in the United States. Don't tell me Canada has benefited from the NAFTA deal because what we have lost we will never regain. As a result manufacturing in Canada is largely dead due to the initial shipment of jobs to the United States then to other areas of the world. China for instance where wages are extremely small compared to North America.
- thomas101960
Maybe we aren't functioning on a single currency or unified govt YET, but we will in due time.
- anon9970
Tell us that our government is not working on a "North American Union".
- anon7998
The Euro is the main currency across the EU, but not every country in the EU has converted to it, for example the UK has kept its £ sterling but is still part of the EU and abides by EU regulations.
- anon6575

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