The North American Free Trade Agreement Essay

2011 Words9 Pages
The North American Free Trade Agreement      Since the birth of this great nation in 1776, the United States has remained a dominant world power in many aspects. The American standard of living has been the envy of the world, powered by an economy rivaled by nearly no one. Our economy continues to be the rock with which the global economy can lean on, as evidenced by nations that rely on huge reserves of the dollar because of its stability as a means of settling international debts. Unfortuneatly, despite the solidity that our economy is so often associated with, we have accumulated a 5 trillion dollar (that's 9 zeros) national debt. Something has to be done about this colossal problem to ensure that the United…show more content…
This seems to make sense considering that 86% of the companies listed on Fortune magazine's top 500 list has operations in Mexico. With the support of current president, Bill Clinton, the NAFTA passed through Congress late in 1993.      The 2,000 page NAFTA plan details many things, one of the most important clauses being the reduction of tariffs. Over the next 15 years all internal tariffs will be reduced to zero for trade amongst the United States, Canada, and Mexico. Tariffs on "sensitive" goods such as agricultural products that require a longer adjustment period will remain in place for the full 15 years, while being subjected to incremental decreases each year. All in all there are 4 tariff classes, quite cleverly lettered A, B, C, and C+, to be reduced to zero eventually. Tariffs for the "A" class were void as of January 1, 1994. The "B" category will diminish at a rate of 20% for five years, the "C" class at a rate of 10% a year for 10 years, and finally the "C+" category which will stretch tariff reductions out over the full 15 years. Other than tariffs, NAFTA also eliminates things such as the costly need to convert drivers as merchandise rolls over the borders of a neighboring country.      What all of this could do for the United States is quite clear. The most important objective is to improve the efficiency and productivity of
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