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Retaliatory tariffs Mexico placed under NAFTA - Research Paper Example

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The high level of bilateral trading relationship between the United States and Mexico due to the proximity between the two nations has been of great importance for the policy makers of the nations. It is also advantageous to maintain a cordial association with a prosperous and…
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Retaliatory tariffs Mexico placed under NAFTA
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Retaliatory tariffs Mexico placed under NAFTA

Download file to see previous pages... Major impact has been on agricultural trading relation between USA and Mexico. According to trade statistics Mexico exports 80% of its agricultural exports to USA, and since the implementation of NAFTA, agricultural exports between USA and Mexico have increased by 9% every year, thus asserting that NAFTA has benefited both the nations (Agricultural trade, n.d.). The retaliatory tariffs that Mexico implemented on various imported goods from USA continued from March 2009 to October 2011. These tariffs were imposed when USA failed to meet the trucking provisions of NAFTA. Mexico initiated these tariffs keeping within the structure of dispute resolution process of NAFTA. In July 2011, a formal agreement was signed that made decisions regarding implementation of trucking provisions of NAFTA (Zahniser, et al, 2011, p.2).
NAFTA came into force on January 1, 1994. It created a trilateral trading relation between USA, Canada and Mexico creating the largest single market of goods and services with these neighbouring nations as the members. The customer base of this treaty was nearly 440 million. The objective was to remove all tariffs on goods that are traded between the three nations thus creating a free trade area by the year 2009. The estimated annual valuation of traded goods between these nations was $ 14 trillion. (Ferrell, et al, 2011, p.98)
NAFTA implementation has brought immense changes in the economic and trading relations between USA and Mexico and all these have had great trade impacts in USA. When NAFTA was signed by the three nations, the USA-Canada free trade agreement was already in practice for five years. There were amalgamations of many industries in USA and Canada. Mexico in the pre-NAFTA era was following a policy to produce goods that would substitute imported goods from the USA. One such example was Mexican automotive industry which was ruled by many decrees pronounced ...Download file to see next pagesRead More
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