Why Was NAFTA Created?

Why Was NAFTA Created?

The North American Free Trade Agreement is an eight-chapter, 22-section and a couple of thousand-paged document that reflects the conformity between Canada, the United States of America and Mexico that was put into action on 1994 and is agreed to take effect for fifteen more years. The aim of NAFTA is to decrease, if not eliminate, the very large taxes imposed and collected from goods that are imported between the three countries. This uses a strict process of documenting and certifying the tariff rates depending on the kind of product. This will then hopefully increase the amount of trade that goes along the three North American countries.

The products, including car parts, computers and food, that come from the US usually take with them very high amount of tax which prevent them from being entering the Mexican and even the Canadian market. Stern rules govern these transactions and a heap of paperwork’s needs to be accomplished to ensure swift trade. Auditing of the Customs agency of each of these countries will determine whether each requirement is met. Economists, on the other hand, put emphasis on the fact the there is more to free trade than just tariffs.

With a promise of generating new jobs to the three players, NAFTA caused a spark in the economies, with Mexico being enticed to purchase bigger amounts of products than before. America and Canada, on the other hand, was interested into lower costs of labor and services.

Many opposed the this agreement claiming that it is harmful for the environment, that it paved the way in giving reasons for Mexicans to go and migrate to the United States. Many, however, see the improvement in the economy of North America and its countries’ markets upon the institutionalization of this Free Trade agreement.