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North American Free Trade Agreement (NAFTA) - Essay Example

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Name Instructor Course Date North American Free Trade Agreement (NAFTA) Introduction The North American Free Trade Agreement (NAFTA) continues to generate issues or concerns. Its implementation embarked on January 1, 1994 and the agreement aimed at eliminating most blockades to trade and outlays among the North American countries; the United States, Mexico, and Canada…
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North American Free Trade Agreement (NAFTA)
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Download file to see previous pages The U.S.-Canada agricultural provisions for Free Trade Agreement were incorporated into the NAFTA in 1989. With the creation of NAFTA all tariffs affecting agricultural trade between the United States and Canada were all removed but with very few exceptions for items covered by tariff-rate quotas. Moreover, Mexico and Canada also reached a separate bilateral NAFTA harmony on market entree for farm products. The Mexican-Canadian agreement also served in the elimination of a number of tariffs. However, some tariffs remained in force between countries such as those affecting trade in dairy, poultry, eggs, and sugar products. This paper intends to highlight some of the reasons behind Canada, the US, and Mexico, entering into the NAFTA, the concerns of each nation, and finally determine whether these concerns materialized. The Conception of the NAFTA Idea The most significant characteristic of the manner in which the free trade within the Western Hemisphere had influenced the trading system was a culmination of efforts to bridge the gap between the Northern and Southern Divide. NAFTA ensures that there is free trade between a major developing country and two developed countries that have undergone significant industrial revolution. This agreement in its entirety is usually based fully on reciprocal commitments. For instance, Mexico, in its own self-interest decided to open its market to far better degree as compared to United States and Canada. Mexico made this move because its tariffs accompanied by other border restriction were much higher at the onset. In addition, some of the areas of commitment that were extremely significant to Mexico include intellectual right to property, unrestricted procurement, ventures, and free transportation. It is worth noting that the sharp peculiarity between developed and developing nations, which permeated the General Agreement on Tariffs and Trade (GATT) and currently the World Trade Organization (WTO) and which held the history of preferential trade considerations was not included within NAFTA. Furthermore, the outlook for a Free Trade Area of the America (FTAA) agreement aims at continuing with this non-special/non-differential affiliation. Even the small countries are certain to receive special and fair treatment since the implementation of free trade commitments and such regional integration on non-preferential basis is likely to have a considerable impact on the future of NAFTA. In fact, this process of developing a comprehensive free trade area within the Western Hemisphere through closing down the gap between the developed and developing nations or countries is compatible with the continued transformation of the multilateral World Trade Organization. However, there were various reasons behind Canada, Mexico, and US joining North American Free Trade Agreement (NAFTA), which are discussed hereunder: Reasons behind Canada’s Entry into NAFTA Upon the introduction of NAFTA, Canada did not welcome the idea of expanding the Free Trade Agreement (FTA) to a third country. In Ottawa, politicians were reticent in regards to the FTA and therefore they questioned the insight of additional tribulations. Nevertheless, through absolute expediency, Canada realized that the Mexico and U.S. were more than willing to sign an agreement in the midst of ...Download file to see next pages Read More
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