Question

How and Why is NAFTA so similar to GATT

Answer 1

The North American Free Trade Agreement (NAFTA) is among Canada, Mexico and the United Nation was intended to encourage the free flow of trade in goods and investment capital throughout the North America which was signed by the leaders of the particapting countries on December 17,1993 . It covers five general areas which are - a)tariff reduction b)the removal of non - tarif trade barriers c)financial investment d)trade rules e)environmental issues.

The General Agreement on Tarifs and Trade (GATT) is intended to encourage and expand the free flow of trade in goods and services among the 128 signatory countries to the 1994 GATT agreement. The three areas of GATT includes a)trade in services b)investment c)intellectual property rights.

The similarities shared by both NAFTA and GATT are as follows -

i) Binding International Agreements - Both NAFTA and GATT are of greater importance to the member nations to accept the multilateral treaty obligations as a part of the binding agreements which in turn enhance the effectiveness of the trade regimes that are embodied in the agreement.

ii) Dispute Settlement Bodies and Panels - Both NAFTA and GATT dispute settlement bodies as both the bodies try to centralize the control over the dispute settlement in an effort to facilitate its importance and effectiveness.

iii)Special Agricultural Safeguards - Both NAFTA and GATT contain safeguard provision to prevent the disruption of domestic industries during the transition period..

iv) Sanitary and Phytosanitary Measures - Both NAFTA and GATT gave Sanitary and Phytosanitary Measures carefull attention as because many countries perceived this to be a hidden trade barriers so both NAFTA and GATT made sure this measures were no longer to be allowed to function as hidden baarriers to trade.