NAFTA
3.1)
North American Free Trade Agreement
3.2)
Countries in the NAFTA ? Economy Situation
3.1)
North American Free Trade Agreement
The
North American Free Trade Agreement (NAFTA) entered into force with Canada, the
United States and Mexico on January 1, 1994. Designed to foster increased trade
and investment among the partners, the NAFTA contains an ambitious schedule for
tariff elimination and reduction of non-tariff barriers. It created the world's
largest free trade area with 380 million people producing nearly $8 trillion
dollars worth of goods and services. The NAFTA did not affect the phase-out of
tariffs between Canada and the U.S. under the Canada-U.S. Free Trade Agreement (FTA),
which was completed on schedule on January 1, 1998. As of that date, virtually
all tariffs on Canada-U.S. trade in originating goods were eliminated. Some
tariffs remain in place for certain products in Canada?s supply-managed
sectors (e.g. dairy and poultry). The NAFTA provides for nearly all tariffs to
be eliminated on trade in originating goods between Canada and Mexico by January
1, 2003. Upon the Agreement's entry into force, half of all U.S. exports to
Mexico became eligible for duty-free treatment. Remaining tariffs are scheduled
for elimination on a five, ten or fifteen year schedule. At the same time,
Mexico has actually increased tariffs on many items for non-NAFTA Countries.
3.2)
Countries in the NAFTA ? Economy Situation
The
North American Free Agreement (NAFTA) bonds Canada, Mexico, and the United
States in a trade agreement that was created to expand and secure a market for
the goods and services produced in the three countries.
United
States with victories in World Wars I and II and the end of the Cold War in
1991, the US remains the world's most powerful nation-state. The economy is
marked by steady growth, low unemployment rate, low inflation (import goods?
price were low), and rapid advances in technology. The US Economy has the most
powerful, diverse and technologically advanced economy in the world with a per
capita GDP of $31,500, which is the largest among major industrial nations. In
this market-oriented economy, private individuals and business firms make most
of the decisions. Government buys needed goods and services mainly in the
private marketplace.
For
Canada, a land of long distances and rich natural resources. From 1867, Canada
has enjoyed independence even to the present day. Economically and
technologically, the nation has developed in parallel with the US. Its political
problem continues to be the relationship of the province of Quebec, with its
French-speaking residents and unique culture to the remainder of the country.
Its area of 9,976,140 sq. km is slightly larger than the US. As a rich and
high-tech industrial society, Canada Economy today closely resembles the US in
its market-oriented economic system, pattern of production and high living
standards.
Mexico
has a free market economy with a mixture of modern and outmoded industry and
agriculture, increasingly dominated by the private sector. The number of
state-owned enterprises in Mexico has fallen from more than 1,000 in 1982 to
fewer than 200 in 1998. A strong export sector helped to cushion the economy's
decline in 1995 and led the recovery in 1996 and 1997. In 1998, private
consumption became the leading driver of growth, which was accompanied by
increased employment and higher wages.