Question

What is NAFTA, which countries are involved, why was it established, and what evidence is there of positive economic outcomes since NAFTA was established?

Answer 1

The North American Free Trade Agreement (NAFTA) is a trade treaty between Canada, Mexico and the United States. It came into effect on January 1,1994.  NAFTA was to expand trade between the United States, Canada and Mexico. Its secondary purpose was to make these countries more competitive in the global marketplace. NAFTA was created to expand trade between the three countries, to promote free trade by reducing trade barriers.

Benefits of NAFTA

NAFTA is the largest free trade area in the world

It quadrapuled trade between the United States, Canada and Mexico.

It eliminated trade barriers like tariff.

Increased economic growth and prosperity. Exports grew and companies prospered.

Jobs were created due to increased manufacturing activity and exports.

Prices were lower because of non-existent of traiffs

Foreign direct investments grew.

Companies would keep costs down by tapping cheaper resources across borders.