Study Notes for NAFTA

What is the North American Free Trade Agreement?

Introduction:-

The North American Free Trade The agreement is a settlement between Canada, Mexico, and the United States. That makes NAFTA the world's biggest unhindered commerce understanding. The agreement came into force on January 1, 1994

Establishment: 1 January 1994

Membera: Canada, mexico and united states

Official language: English, French, Spanish.

The objective of NAFTA?

1. To eliminate the trade barrier and facilitate the cross- border movements of goods and services between the parties

2. To promote conditions of fair competition

3. To provide adequate and effective protection and enforcement of intellectual property rights in each territory

4. To substantially increase investment opportunities

5. To create effective protection for the implementation and application of this agreement, for its joint administration & for resolution of disputes

6. To establish a framework for further trilateral, regional and multilateral co-operation to expand and benefits of this agreement.

Provisions of NAFTA?

NAFTA also seeks to eliminate non-tariff trade and to protect the intellectual property right of the products.

1. intellectual property:

NAFTA made some changes to the copyright law of the united states foreshadowing in the Uruguay round agreements act of 1994 by resorting copyright (within NAFTA) in certain motion pictures which had entered the public domain.

2. environment:

A side agreement was negotiated on the environment with Canada and Mexico, the North American agreement on environment cooperation, which led to the creation of the commission for environmental cooperation in 1994.

3. transport infrastructure:

NAFTA established the CANAMEX corridor for road transport between Canada and Mexico, also proposed for use by rail, pipeline, and fiber optic telecommunications infrastructure. This became a high priority corridor under the U.S. intermodal surface transportation efficiency act of 1991.

4. Agriculture:

Three separate agreements were signed between each pair of parties. The Canada-U.S. agreements contain significant restriction and tariff  quotas on agricultural products(mainly sugar, dairy, and poultry products), whereas Mexico-U.S. pact allow for a wider liberalization within a framework of phase-out periods (it eas the first north-south FTA on agriculture to be signed).

Benefits of NAFTA?

1. Benefits the importers by reduced or duty-free goods.

2. Trade and investment levels in North America have increased, bringing strong economic growth, job creation, and better pries and selection in consumer goods.

3. There has been a great increase in trade among the three countries and market access within each country also increased considerably.

4. Improved economic stability in the U.S. marketplace

5. a marketplace that is increasingly driven more by supply and demand than by barriers to commerce.

Limitations of NAFTA?

1. It has a negative impact on farmers in Mexico who saw food prices fall based on cheap imports from u.s. agro-business

2. It has a negative impact on u.s. workers in the manufacturing and assembly industries who lost jobs

3. Critics also argue that NAFTA has contributed to the rising levels of inequality in both the U.S. and Mexico

4. Some economists believe that NAFTA has not been enough to produce an economic convergence, nor to substantially reduce poverty rates