by James Johnson

Created on: December 08, 2008   Last Updated: December 12, 2008

North American Free Trade Agreement, NAFTA for short, is a trilateral treaty or agreement between the three major countries of North America, Canada, Mexico, and the United States, to remove restrictions and barriers to trade between those countries. NAFTA was first conceived in 1992, signed on December 8th, 1993 and implementation of NAFTA started in January of 1994. It is currently one of the largest, most potent, international trade agreements ever signed. That is NAFTA summarized, but there is much more.

When NAFTA was first proposed, there was a great deal of concern with differing groups worried about how it would be organized and controlled, mainly how it would affect them. Americans worried about an influx of cheap labour from Mexico while Mexico was concerned over cheap agricultural goods driving their farmers out of business. Canadian environmentalists expressed concern over the possible loss of their forests or water being shipped south of the border. It is because of these concerns that while NAFTA started implementation in 1994, the final stages were not instituted until 2008!

Like most things, NAFTA has been both positive and negative. Some concerns were justified. In the United States, NAFTA has been blamed for the loss of jobs in the industrial sector, not from Mexicans moving into the US (That is still restricted), but from businesses heading to Mexico as they no longer pay tariffs shipping things into the U.S. This has resulted in cheaper good throughout North America. Mexico has seen food prices drop, decreasing the poverty level in cities but making it harder for small farmers compete. So far the environmental concerns have been unjustified.

Some argue that the main beneficiaries of NAFTA have been big businesses. International manufacturers have lowered their cost and expanded their markets. They have set up businesses in poor areas and no longer have the tariffs or taxes that were imposed on goods being shipped between nations. But are business the only beneficiaries?

Mexico, with more jobs and food has been a definite winner, but the U.S. and Canada have reaped benefits. They have expanded their markets for agricultural exports, lowered the costs of many products desired by their citizens, and promoted good will. There really were no losers in NAFTA.

Public support for NAFTA is much higher in Canada and Mexico than in the United States. In both of those countries, the majority on the citizens support NAFTA and would like to see it continue. Unfortunately, many in the United States feel food would be cheaper if more was kept in country and they do not realise that many products are cheaper due to NAFTA.

NAFTA, the North American Free Trade Agreement, may or may not continue with the current world situation. Some actually want to expand it to include Caribbean and Central American Countries. Will this happen? As the saying goes, only time will tell!

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