Nafta

NAFTA

Since the beginning of civilization, trade has been an important issue. Christopher Columbus sailed to the Americas in search of a faster and safer trade route to India. We as Americans fought for our independence over trade related issues, such as tariffs and rules on with whom we were allowed to export and import goods. Our people have always fought for the rights and ability to buy and sell what they want at a reasonable price. The North American Free Trade Agreement, or NAFTA, is yet another attempt at this. NAFTA was signed on December 17, 1992 and put into effect on January 1, 1994 (SICE). It is a trade agreement between Canada, the United States, and Mexico. This paper will explain all the finer points of the agreement, its affects on our economy, and some predictions to the future. I shall end with my opinion of NAFTA based on what I have learned while researching this paper.

To discuss NAFTA with a greater understanding, it is important to realize why the three major governments on the North American continent would want to form a trade alliance. According to the law library at Southern Methodist University “its purpose was to remove tariff barriers between Canada, the United States and Mexico” (North). Removal of these barriers obviously promotes trade between these countries. It also promotes the buy and selling of goods between these countries by making those goods more easily accessible. Sellers can produce with lower costs and buyer can get the end product cheaper than if the tariffs were included in the price. But NAFTA had much loftier goals then just lowering cost and price. It was established “with the goal of fostering greater economic growth in Canada, the United States, and Mexico” (John). The ways in which NAFTA planned to create this spark in the economies of three different nations, was outlined in the actual NAFTA agreement text, in Article 102: Objectives. It states that the purpose of the agreement is to:

eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories[…], promote conditions of fair competition[…], increase substantially investment opportunities […], provide adequate and effective protection and enforcement of intellectual property rights […], create effective procedures for the implementation and application of [NAFTA], […] for the resolution of disputes, and, establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of [NAFTA]. (SICE)

In layman’s terms, NAFTA hoped to encourage trade by eliminating the former obstacles in order to facilitate the ease of goods and services across all borders. It also