North American Free Trade Agreement
The establishment of the North American Free Trade Agreement was effected on 1st January 1994. Abbreviated as NAFTA, it is ranked as the largest free trade region globally. The agreement was signed between Mexico, Canada and the United States to enhance economic growth and prosperity for the region. Over the years, NAFTA has demonstrated the ability of free trade to enhance competitiveness and increase wealth. The benefits of the agreement have been experienced across all sectors ranging from manufacturers, workers, consumers, farmers, families to several others.
Currently, the North American Free Trade Agreement links a larger population of people and also produces goods and services worth trillions of dollars. For instance, statistics show that as at 2012, the United States’ goods and services traded with its NAFTA partners was estimated at $1.2 trillion. This is an indication that indeed, NAFTA’s performance has been soaring over the years and is expected to even do much better in the future.
The North American Free Trade Agreement is a comprehensive agreement that has clear rules and guidelines aimed at enhancing trade between the USA, Canada and Mexico. The body’s activities are overseen by various institutions tasked with ensuring its provisions are properly interpreted and implemented. The agreement ensures that businesses in North America have better access to materials, investment capital, technologies and even talent.
Businesses in North America have been able to benefit in quite a number of ways sine the establishment of NAFTA. The agreement has laid down measures to ensure that tariffs are on the low to enhance export opportunities for businesses in the region. It has also been effective in eliminating technical barriers to trade. As a result of this, businesses in North America have been able to acquire the opportunity of making competitive products for the regional market as well as the rest of the world.
There are several institutions of NAFTA that work together towards the smooth implementation of the agreement’s policies. These institutions include the Free Trade Commission, NAFTA coordinators, NAFTA Secretariat, Commission for Labor Cooperation and Commission for Environmental Cooperation among others. Each of these bodies is assigned specific duties that it is required to undertake so that the objectives of the North American Free Trade Agreement are achieved.
There are quite a number of provisions of NAFTA that are detailed in the agreement. Precisely, the 2,000 page document is made up of eight sections and 22 chapters. Some of the main provisions of the agreement include market access for goods, protection for foreign investment, protection for intellectual property, easier access for business travelers, commitment to labor cooperation, commitment to the environment and access to government procurement.
North American Free Trade Agreement has its specific rules of origin that are used to determine the eligibility of products for preferential treatment. Over the years, the partners in the agreement have continued to implement measures aimed at liberalization and expansion of the list of products that should qualify for the preferential treatment.
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