Free Trade Zone

“Free Trade Zone”

NAFTA stands for North American Free Trade Agreement, is a set of rules that the countries, United States, Canada and Mexico agree, to sell and buy products and services from North America. It is called free trade zone because, due to the rules that they have in place, they decide how and when frontier fees will be eliminated to obtain free access to products and services among the three participating nations.

This agreement was born when the United States and Canada began to materialize in 1965, with the signing of the Auto Pact. For its part, between Mexico and the United States, this union began when in 1965 the program of the maquiladoras in northern Mexico was established. In 1990 Mexico and the United States decided to begin the negotiation of a comprehensive free trade agreement, then Canada showed its interest to be part of this treaty, beginning this way the work with the objective of creating a free trade zone in North America.

NAFTA sought the elimination of customs and border barriers to be able to market freely in the zone of the agreement. Taking as a starting point the doctrine of free trade, promoted competition, the protection of intellectual rights in each country as well as creating the mechanisms that would allow the application of the treaty in each country.

The main objectives of this agreement are, promote conditions for a fair competition, increase investment opportunities, provide adequate protection of intellectual property rights, establish effective procedures for the application of the FTA and for the resolution of disputes, eliminate barriers to trade between Canada, Mexico and the United States, stimulating economic development and giving each country equal access to their respective markets.

Some positive aspects of NAFTA, are that it boosted economic growth, profits, and jobs for all three countries. “Between 1993-2015, trade between the three members quadrupled from $297 billion to $1.14 trillion.” (https://www.thebalance.com/advantages-of-nafta-3306271). Lower tariffs also reduced import prices. Lowered food prices in much the same way. Food imports resulted in lower prices of fresh vegetables, chocolate, fruits, beef, etc. This agreement also created five million new U.S. jobs.  Also, as Mexico's economy grows due to an increase in manufacturing and assembly positions, the country requires skilled laborers, high-tech equipment and training that the U.S. and Canada can supply. This sharing of knowledge increases employment opportunities across the continent.

In Mexico, United States and Canada there has been big gains when it comes to agriculture. For example, American exports of agricultural products to Canada and Mexico have increased since NAFTA came. The U.S. Department of Agriculture has determined that Mexico and Canada, along with China, are the largest consumers of American agricultural products, far outpacing other nations. NAFTA has resulted in overall growth in exports from all three countries, with each benefiting from increased exports of their core agricultural products. NAFTA has brought about general development in exports from every one of the three nations, with each profiting from increased exports of their main agricultural products.