Apr 12

Suppose That The North American Free Trade Agreement

The three NAFTA countries have developed a new collaborative business classification system that compares business statistics across North America. The North American Industry Classification System organizes and separates industries according to their production processes. Under NAFTA, the three countries reduced their import tariffs on virtually all industrial products traded between them to zero. Second, NAFTA eliminated many tariffs on imports and exports between the three countries. Tariffs are taxes that are used to increase the cost of foreign goods. NAFTA has developed specific rules to regulate trade in agricultural products, motor vehicles and clothing. NAFTA has had three major advantages. U.S. food prices were lower due to duty-free imports from Mexico. Oil imported from Canada and Mexico has prevented the rise in gas prices. NAFTA has also increased trade and economic growth for all three countries.

NAFTA was supplemented by two other regulations: the North American Environmental Cooperation Agreement (NAAEC) and the North American Agreement on Labour Cooperation (NAALC). These tangential agreements should prevent companies from moving to other countries in order to use lower wages, more moderate health and safety rules and more flexible environmental rules. The Clinton administration took office in 1993 and negotiated two new ancillary agreements. As soon as these labor and environmental agreements were concluded, NAFTA was submitted to Congress, where more Republicans voted for NAFTA than Democrats. Through NAFTA, the three signatories agreed to remove barriers to trade between them. By removing tariffs, NAFTA has increased investment opportunities. Trump`s public statements have focused on the bilateral trade deficit with Mexico. He used Twitter to call U.S. companies like Carrier, Ford and General Motors for building or moving production sites in Mexico. And he has sometimes threatened Mexico with a 35 percent import tariff and other types of marginal taxes.

First, tariff reductions on Mexican trade under NAFTA were introduced in most other countries when the United States joined the World Trade Organization (WTO) in 1995.