North American Free Trade Agreement

NAFTA is the product of a natural progression to a global economy. It began with the General Agreement on Tariffs and Trade, continued with the Trade and Tariffs Act, and officially began with the Free Trade Agreement between Canada and the United States and a signed promise for such developments between Mexico and the United States only a year later. Once it was finally ratified in 1992, it enabled free movement, shipment, and trade between the United States, Canada, and Mexico.

One of the primary alterations that NAFTA applies is the standardization of each country’s Customs. Verification, record keeping, and rules of origin are all determined by the NAFTA Secretariat to ensure that there are as few conflicts as possible. Ultimately, it was applied to make the exporting and importing process as well as travel more efficient.

Countries included in NAFTA are Canada, the United States, and Mexico.

The problems surrounding NAFTA are economic and political in nature. It has been suggested that NAFTA is responsible for the loss of jobs in Canada and the United States as well as a reduction in wages and worker rights in Mexico.

NAFTA is essentially a trilateral trade agreement between Canada, the United States, and Mexico that enables free movement, shipment, and trade between the three countries in order to combine the strength of the three economies. Part of the exporting process is verification that persons can legally travel between country lines (usually in the form of passport, travel visa, or other form of verification often accompanied by paperwork) and that the goods being exported or imported can legally enter the country. Under NAFTA, this has been expedited to the effect that those exporting (or importing, but it’s not required by both) must simply apply for a Certificate of Origin. Once this process is completed, the exporter can legally transfer the goods with the benefit of NAFTA sanctions between the United States, Canada, or Mexico with no further need for verification.

NAFTA also grants the provision of temporary entry of business persons, whereby citizens of the three countries can travel freely between them as long as they meet one of five requirements:

- Engagements that are part of the sales or manufacturing process

- Those dispersed from parent companies that are conducting substantial trade within the country to which the business person is being dispersed

- Investors intent on committing a substantial investment within the target country

- Those transferring to another location of a parent company

- Those practicing in specific fields, including economists, attorneys, accountants, and architects, for example

NAFTA, or the North American Trade Agreement, applies to all countries contained within North America, which is Canada, the United States, and Mexico. Canada was initially opposed to a North American Free Trade Agreement despite the fact that it was first to sign a trade agreement with the United States in 1988. Free trade was unpopular among Canadian politicians and Canada felt that it would render itself vulnerable to the shadow of the United States economy.

As an idea born of the United States, NAFTA is probably most aligned with U.S. interests. In fact, NAFTA has oft been accused of an expansion of the U.S. economy rather than a merger between three economies. Nonetheless, many sanctions were offered to protect the interests of Mexico as well as Canada and little has been done by the U.S. government or U.S. organizations that have affected either Canada or Mexico in any negative way.

Reporting economic growth as well as lost wages and jobs, Mexico has generally considered NAFTA bittersweet. Accordingly, just as there are complaints about NAFTA both from Mexican and United States politicians, there have been just as many benefits touted from the same origins. While employment has reduced in some sectors, employment has risen in others; while wages have lowered in some lower-income jobs, the GDP of Mexico overall has seen steady growth since the ratification of NAFTA. The overall consensus remains that NAFTA is a positive influence on North America overall and thus remains in effect.