North American Free Trade Agreement

North American Free Trade Agreement
University of Phoenix
Global Business Strategies

North American Free Trade Agreement
      The North American Free Trade Agreement (NAFTA) is an agreement reached in 1994 by the United States, Canada, and Mexico that instituted a schedule for the phasing out of tariffs and eliminated a variety of fees and other hindrances to encourage free trade between the three North American countries. This paper will deliberate the disadvantages and advantages of the integration of the agreement. Effect in January 1, 1994, (NAFTA) has been a major force in increasing the agricultural trade among the three countries and it is the largest trade bloc in the world in terms of combined gross domestic product (GDP) of its members. Since implemented, the United States, Canada, and Mexico have improved their trades to over $333 billion throughout the existence of the unification.
          The advantage of integration regionally is that there are no imposed restrictions on the trade. This will allow countries to focus on the services and produced goods in a more efficient manner to drive down cost, which will boost the economy. The free trade without restrictions allows lowering of prices of goods, which increases output of goods that are in demand by other countries, which will create jobs increased goods lower operating cost. Also with compiling resources with the neighboring country will allow expansion in an economic outlook.
    NAFTA created the world’s largest free trade area, linking 444 million people and producing $17 trillion in goods and services annually. Estimates are that NAFTA increases U.S. GDP by as much as .5% a year.   The North American Free Trade agreement eliminates tariffs and creates accords on international rights for business investors. This reduces the cost of trade, which spurs investment and growth, especially for small business. Eliminating tariffs decreases the cost of imports and...