The North American Free Trade Agreement (NAFTA) is a free trade agreement that has been a controversial topic for many years, particularly in the United States. The NAFTA is a free trade agreement that was signed in 1993 between the three countries, Canada, the United States, and Mexico. This free trade agreement was formed to eliminate all tariff agreements and increase trade between the three countries.
The NAFTA has raised many issues during elections in both Canada and the United States. It became a major issue in the 2008 presidential elections, in the United States during the campaign debates. Due to this, the citizens of Canada were concerned that the deal would be revised in favor of the Americans. Recently, in October 2017, the NAFTA was changed to the United States-Mexico-Canada Agreement (USMCA).
Trade is Vital
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It can be argued that the North American Free Trade Agreement (NAFTA) is a benefit to Canada, the United States and Mexico because trade is vital and beneficial for an economy to grow. Since the NAFTA reduced and eliminated tariffs, it makes it easy for the three countries to trade. This also helps them and their economic growth. Economic growth is necessary because it allows for more job opportunities to be created which then increases the standard of living for the country.
The NAFTA is still a good resource and is also shows some benefits to this day. In 2017, a research paper revealed that the act has more than tripled trade between the three countries since the agreement was signed (Villarreal & Fergusson, 2017). With trade increasing due to this agreement, it benefits the economies growth which stated above, allows for more job opportunities and an increase in the standard of living for the country.
Overall Effects of The Concern Aboutt the Agreement
The North American Free Trade Agreement (NAFTA) had their advantages and disadvantages while it was in the making. Prior to the North American Free Trade Agreement (NAFTA) becoming official, there were many concerns about the agreement among all three countries, Canada, United States and Mexico. Both Canada and Mexico were wary of the dominance that the United States held and they showed no interest in the deal (Macdonald, 2017).
During these negotiations, Canada was wary and a bit reluctant to give the US market full access to their trade and they also had little interest in Mexico due to the low level of trade between Canada and Mexico (Macdonald, 2017). In the end, Canada decided that it was better for them to be apart of the North American Free Trade Agreement (NAFTA) rather than to be against the negotiation.
Becoming A Reality
Despite the concerns that Canada had, the North American Free Trade Agreement (NAFTA) turned out great for them. The elimination of tariffs allowed Canada to increase their trade between the US and Mexico.
As stated above, the trade between the three countries has tripled since the signing of the agreement. This increase in trade helped lead Canada to their economic growth. From 1993 to 2015, Canada’s per capita GDP increased from 40.3% to $50,001 (Floyd, 2018). This proves that the NAFTA was a good negotiation for Canada’s economy and we are able see the outcomes of it due to their increased standard of living and the innovation that continues to shine through Canada as time progresses.
- Current Analysis of NAFTA. Retrieved from https://lms.virtualhighschool.com/d2l/le/content/61065/viewContent/469197/View
- Floyd, D. (2018). NAFTA's Winners and Losers. Retrieved from https://www.investopedia.com/articles/economics/08/north-american-free-trade-agreement.asp
- Macdonald, L. (2017). Canada and NAFTA | The Canadian Encyclopedia. Retrieved from https://www.thecanadianencyclopedia.ca/en/article/north-american-free-trade-agreement-nafta
- NAFTA’s Economic Impact. (2018). Retrieved from https://www.cfr.org/backgrounder/naftas-economic-impact
- Villarreal, M., & Fergusson, I. (2017). The North American Free Trade (NAFTA). Retrieved from https://fas.org/sgp/crs/row/R42965.pdf
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