Nafta And Theu.s. North American Free Trade Agreement
1063 Words5 Pages
Introduction The formation of NAFTA (North American Free Trade Agreement) has brought many advantages among the nations of the U.S., Canada, and Mexico. Since its inception in 1994, it is difficult to see the great effect NAFTA has economically whether it is good or bad due to currency fluctuations, and economic growth (Villarreal & Fergusson, 2014). This is why the paper will go into the advantages that NAFTA has brought to the countries mentioned above. The advantages that will be discussed are the reducing or elimination of tariffs amid the three nations, and production domestically (Ebert & Spielmann, 1994; Villarreal & Fergusson, 2014).
The NAFTA Advantage of Tariff Reduction One of the important advantages involving NAFTA was…show more content… In agriculture NAFTA’s goal was to establish different cross-border engagements in regard to the agriculture trade. As one engagement would be established between the U.S. and Mexico, the other would be set up between Canada and Mexico. NAFTA in regard to the trade in agriculture involving the U.S. and Mexico did away with the majority of the barriers not having nothing to do with tariffs. This was accomplished by converting them to ordinary tariffs, or by tariff-rate quotas. Tariffs placed on corn and sugar where done away with in 15 years between the two nations (Villarreal & Fergusson, 2014). One-half of the agricultural trade between the U.S., and Mexico was duty free when NAFTA was established. This was an advantage to both nations due to the fact that before NAFTA exports from the U.S to Mexico in agriculture were under the control of requirements in licensing imports that were restrictive (Villarreal & Fergusson, 2014). Next in regard to the automotive industry, NAFTA did away with the auto decree in Mexico that was so restrictive. This involved the doing away of tariffs from Mexico on products from Canada and the U.S., and importation tariffs from the U.S. on Mexico as long as they followed the stipulations involving the rules of origin. These were sixty percent in regard to parts for other