Question

Topic: Production & Global Trade - USA & NAFTA Partners

1. Introduction: Include an overview. ( 1-1.5 pages)

·         The history of NAFTA signing with time, place and participants.

·         After NAFTA, how much trade (by percentage) has been increased among the members since beginning.

·         Key goals of NAFTA

Answer 1

The North American Free Trade Agreement (NAFTA) came into effect on January 1, 1994, creating the largest free trade region in the world at that time, generating economic growth and helping to raise the standard of living for the people of all three member countries.

History, Time & Participants: The North American Free Trade Agreement's history began in 1980. Its purpose is to reduce trading costs, increase business investment and help North America is more competitive in the global marketplace. The agreement is between Canada, the United States, and Mexico. The impetus for NAFTA began with President Ronald Reagan, who proposed a North American common market in his campaign. In 1984, Congress passed the Trade and Tariff Act. In 1991, Canada requested a trilateral agreement, which then led to NAFTA. In 1992, NAFTA was signed by President George H.W. Bush, Mexican President Salinas and Canadian Prime Minister Brian Mulroney. In 1993, concerns about the liberalization of labor and environmental regulations led to the adoption of two addendums. President Bill Clinton signed it into law December 8, 1993.

After NAFTA, how much trade (by percentage) has been increased among the members since beginning?

Since the implementation of NAFTA, the North American economy has expanded, with the combined GDP for Canada, the U.S. and Mexico reaching USD $20.7 trillion in 2015. Canadian merchandise exports to the United States grew at an annualized rate of almost 4.6 percent between 1993 and 2015. Canada’s bilateral merchandise trade with Mexico nearly reached CA$37.8 billion in 2015. Some 78 percent of Canada’s total merchandise exports were destined to our NAFTA partners in 2015. Total merchandise trade between Canada and the United States more than doubled between 1993 and 2015. Trade between Canada and Mexico has increased over 8-fold over the same period. In 2015, total trilateral merchandise trade, as measured by the total of each country’s imports from its other two NAFTA partners, amounted to over USD $1.0 trillion – more than a threefold increase since 1993. In 2015, NAFTA partners represented 28% of the world’s gross domestic product (GDP) with less than 7% of the world’s population. Between 1993 and 2015, Mexico-Canada merchandise trade grew 8-fold to almost CA$37.8 billion in 2015, showing an average annual growth rate of 10.1 percent. Services trade between Canada and Mexico has increased six-fold during the NAFTA period, to nearly $3.9 billion in 2015. In 2015, Mexico was Canada’s 3rd largest trade partner and was Canada’s 3rd largest supplier and 5th largest export market for merchandise trade.

key objectives of the NAFTA?

1. To lessen boundaries to exchange.
2. To build participation for enhancing working conditions in North America.
3. To make an extended and safe market for products and enterprises delivered in North America.
4. To build up clear and commonly profitable exchange rules.
5. To help create and extend world exchange and give an impetus to more extensive universal participation.