The North American Free Trade Agreement

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With the growing trend of globalization within supply chains to expand products into foreign countries, understanding the elements of trade blocs that enable open markets between member nations while also decreasing the cost of conducting business within a country is essential in making strategic logistical decisions. The North American Free Trade Agreement (NAFTA) has provided one such trade bloc that encompasses the countries of the United States, Mexico, and Canada. Since the inception of NAFTA in 1994, significant financial results have been achieved regarding increases in trade revenue and increases in the Gross Domestic Product (GDP). While there is a debate on whether NAFTA has achieved its intended goals, growing concerns in the…show more content…
157). One of the main reasons that countries establish trade blocs is to open markets between member nations thereby decreasing the cost of doing business by removing trade tariffs. With the implementation of trade blocs countries experience an increase in the size of consumers for products and services to export and allow organizations easier access for competing within global markets.
In further analyzing the NAFTA, the agreement took effect on 1 January 1994 with the primary objectives comprised of as North American Free Trade Agreement (n.d.) explained, "the liberalization of trade between Canada, Mexico, and the United States, stimulate economic growth, and give the NAFTA countries equal access to each other 's markets" (n.p.). With the provisions and annexes of the NAFTA consisting of twenty-two chapters and compiling over two-thousand pages, NAFTA is the largest free trade agreement ever enacted and has served as a template for future free-trade agreements in addition to having several provisions modeled for inclusion within multilateral trade negotiations.
The NAFTA influences a variety of strategic issues that include market access, removal of nontariff barriers, rules about origin of goods, customs administration, investment, services, intellectual property, government property, and standards. To facilitate market access between the three countries, within the first ten years
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