N.A.F.T.A: The Effect and Future Introduction N.A.F.T.A is the North American trade agreement and is an agreement which includes Mexico, Canada and the United States which came into effect on January 1st, 1994. The beginnings of N.A.F.T.A can be traced to the Presidency of Ronald Reagan whose campaign pushed for a North American common market. A common market is a group of countries that has reduced or removed trade barriers, standardized trade policy with non-members, and allows open resource movement between member countries. Ronald Reagan campaigned for this in his 1981 and later in his presidency began negotiations with the then Canadian Prime Minister Mulroney. These talks gave birth to the Canada-US Free Trade Agreement which was signed …show more content…
First and foremost it is to establish a free trade area amongst its members. Furthermore it is to eliminate barriers to trade in, and facilitate the cross-border movement of goods and services between the territories of the parties. It is to also promote conditions of fair competition within the free trade area, increase substantially investment opportunities in the territories of the parties, and provide effective and adequate protection and enforcement of intellectual property right in each party’s territory. As well as create effective procedure for the implementation and application of this agreement, for its joint administration and for the resolution of disputes and finally, establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of the agreement. Article 102 also says that all the provisions of this agreement must be interpreted according to the above …show more content…
However between the parties intraregional trade have increase by 810 billion dollars since it was signed into law by President Clinton. Investment and travel also have also increase significantly across the borders. The United States now trades more goods and service between the member nations than it does with any others. A large portion of this growth can be traced to increased trade with Mexico where the trade balance has shifted from a 1.7 billion surplus to a 61.4 billion deficit since N.A.F.T.A came into effect. Before N.A.F.T.A came into effect many were worried about the effect on the US job market one presidential candidate even said “You're going to hear a giant sucking sound of jobs being pulled out of this country.”(Perot,1992) However the effect has proven to be much smaller than expected as the trade with Mexico and Canada represents only a small portion of the US economy. Many economist will say that you will experience more beneficial effects in the long term after taking some short term hits like movement of jobs as companies move to Mexico to save on