Pros And Cons Of North American Free Trade Agreement

The North American Free Trade Agreement (NAFTA) is an international agreement between Canada, America and Mexico. This agreement took effect in January 1994 and was signed by President Bill Clinton. This agreement brought great changes in trade volumes and open new opportunities for millions of labours. Later, in January 2008 according to the schedule all duties and restrictions were eliminated. About 45,000 tariffs were eliminated in 1994 and only 3000 were left until 1999.

NAFTA is the treaty that created the free-trading zone among the United States, Mexico, and Canada.

In modern economic policy of nations and states, the tariffs a tool to tax goods and services being imported. The principal desired outcome for this tool is to create security for the domestic industry from the imported product, which may be cheaper for consumers to purchase. (McEachern, 2015)

NAFTA renegotiations, beginning on August 16th 2017, includes digital trading on account of a rise in online sales. Digital Trading is defined as the “scale of consumer products on the internet and the supply of online services” (Lighthizer). The Digital Trading issue arose due to the fact that online sales have increased as well as the block that current tariffs that places online trading between NAFTA countries. This block occurs because a tariff is placed on imported goods. A tariff is basically a tax imposed on goods that are imported into a country, whereas duty-free means import goods are tax free (“tariff” and “duty-free”). The Canadian limit on tax free goods is the lowest in the world while the U.S has the highest (Alini). Furthermore, Mexico has a $50 duty-free threshold, Canada a $20, and the United States a $800 (Gillespie). This means that

Northeast: The tariff helps the manufacturers because of competition throughout the market. It’s so hard to keep on top of the market.

“It is important to realize that NAFTA is not the opening up of Mexico,” said Jonathan Heath, a Mexico City economist. “The opening up of Mexico had occurred before NAFTA. NAFTA is the consolidation of that opening up and what it really represents is the locking in of trade liberalization for Mexico.”

control over trade between states and countries. While the purpose of this tariff is completely

The features of the NAFTA include the abolition of tariffs on 99% of traded goods between the United States, Canada, and Mexico, removal of barriers on cross-boarder service flow, protection of intellectual property rights, removal of restrictions on foreign direct investment, application of national environmental standards, and two commissions with the responsibility to impose fines and remove trade privileges (Hill, 2011). The two commissions focused on environmental and labor issues among trading partners. The agreements support “cooperative efforts to reconcile policies, and procedures for dispute resolution between the member states (NAFTA, 2011).

On January 1, 1994, the long-awaited trade agreement between Canada, Mexico, and the United States came into effect. The North American Free Trade Agreement, also known as NAFTA, removes tariff trade barriers between the respective countries by arranging a duty-free trade in a variety of goods. It also protects things like copyrights, patents, and trademarks amid the three countries. The agreement made trading and producing goods easier while also working to make North America a more aggressive player in the global marketplace (Amedeo, 2011). NAFTA opened up barriers for people to reach a bigger market to prosper from.

The North American Free Trade Agreement or as its most commonly known NAFTA “is a comprehensive rules-based agreement between the United States, Canada, and Mexico”, that came into effect on January 1,1994. All three countries signed it in December of 1992; later on November of 1993 it was ratified by the United States congress. NAFTA was not only used in cutting down on tariffs between both countries but it also help deal with issues such as Transportation, Border Issues, and Environmental Issues between these two countries. NAFTA changed some tariffs immediately and within fifteen years other tariffs will fall to zero. NAFTA was not created to just lower tariffs it was also created to open protected sectors in agriculture, energy,

Although tariffs usually cause domestic prices to increase they can have a positive effect on our economy and specifically our domestic producers of steel and their employees. The US trade policy has historically been protectionist in nature, and congress, the principle body of power for import policy, heavily favored domestic firms over their foreign competitors (Irwin 146). As a result, domestic steel producers have had tariffs and quotas in place for many years. An effective tariff raises revenue for our US government and can help to subsidize domestic production at the expense of foreign producers. This is good because the American government receives money from foreign exporters that it would not have otherwise had access to. This money can then be used in domestic government policies and could

Clearly NAFTA has led to widespread job loss, with more than 200,000 U.S. workers certified as NAFTA casualties under just one narrow government program. Since the 1970's, there has been a steady trickle of

There are quite a few forms of tariffs that the government may apply based on the condition of the country’s economic welfare. The pros and cons of these forms of tariffs will be reviewed. Discussion on how these tariffs positively or negatively affects the economic stance of the country will be displayed. Tariffs such as the ad valorem, the taxing a percentage of the value of an item and the specific tariff or tax which is a set amount based on weight or sum of items. (McEachern, 2015)

     NAFTA was born out of the original Canada-US Free Trade Agreement of 1988, which did change the existing agreement concepts, but essentially

In recent years, the US has increased tariffs on the steel industry in order to restrict