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Regional Analysis Of Nafta

908 words - 4 pages

Regional Analysis of NAFTA

January 1, 1994, the United States, Canada, and Mexico entered a trade agreement which removed restrictions on trade between the three countries to encourage free competition, improve investment opportunities, and increase market access. NAFTA has provided some advantages to its members such as the eradication of tariffs, product price reductions, and increased profit margins. By reducing the tariff rate on goods or products, this allows Small and Medium Enterprises (SMEs) to reduce their selling price, thus keeping them competitive with non-NAFTA goods and products sold at a higher price due to imposed tariffs. This also allows SMEs to compete with larger ...view middle of the document...

NAFTA was going to be responsible for a change in the North American economic and transportation patterns (Coy 2014). The business growth along the north-south axis would most likely exceed that along the east-west axis in the United States and that NAFTA would be the cause of the dramatic change (Coy 2014).
According to reports from the U.S. Department of Commerce, trade between NAFTA members have increased 200% and members of NAFTA have purchased a greater number of U.S. products and exports than was purchased in Europe. In addition, since the implementation of NAFTA, the number of SMEs has tripled in the United States due to the increased demand of products and goods. However, in Mexico, the overall employment levels are not high enough to meet the needs of the population with approximately 13 million Mexicans living in extreme poverty. Because of such extreme conditions, this has led to a rise in migration of Mexicans to the United States at an annual rate of 1 million people per year (Moreno, 2007). While Mexico has been slowly becoming more economically stable, the Canadian economy has been steadily increasing with low inflation and declining unemployment rates.
The North American Free Trade Agreement creates a single, North American market of nearly 400 million consumers. This is larger than the 12 countries of the European Community and a combined GDP of $11 trillion. United States, Mexico, and Canada are encouraged to trade amongst one another, free of tariffs and idealistically, free of barriers. NAFTA's lower tariffs and other provisions have provided more choices in foods, goods, and services at competitive prices and has increased the standard of living. The movement of goods and people creates stronger, international linkages among our three countries; facilitating tourism, travel and a greater...

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