North American Free Trade Agreement

North American Free Trade Agreement

I decided to do my research on the North American Free Trade Agreement (NAFTA). I remember hearing about this agreement but never really understood the full agreement or exactly what it was or what was included.

NAFTA was signed between the United States, Mexico and Canada on January 1, 1994. NAFTA eliminated tariff and nontariff trade barriers between the three countries. It allows the three countries to invest, sell services, and bid on government contracts in all three countries and protect intellectual property rights. It was expected to take 10 years to remove all the United States to Mexico tariffs. In regards to an agricultural trade there was a new trade agreement between the United States and Mexico and Canada and Mexico. However, there was not a new agricultural trade between the United States and Canada because they had just ratified an agreement in 1989. Some of the agricultural tariffs would take up to 15 years to abolish.

When goods and services cross international lines the price that is paid for them is dependent on the quotas limiting the quantity imported. There are also non-tariff barriers, such as registration or labeling requirements, which create road blocks. This is where trade comes in. When goods and services can move across international lines and are considered “free” or “open” the price is determined by supply and demand. The overall intention of NAFTA was to increase the flow of goods, services and investments among the three countries.(1) There were specific objectives of this agreement that are as follows(2):

* the elimination of import tariffs

* the elimination or reduction of nontariff trade barriers

* the establishment of clear, binding protection for intellectual property, which includes patents and copyrights

* fair and fast dispute settlement

* to increase cooperation for improving working conditions in North America

During the first year of the NAFTA...