The North American Free Trade Agreement (NAFTA) was implemented on Jan. 1, 1994. It was a trade agreement between Mexico, U.S and Canada. This has generated both advantages and disadvantages to the three countries.

NAFTA led to a decrease in the trade restrictions making it easier for Americans to import goods from Canada and Mexico.  Canada and Mexico are the second and third largest suppliers of imported goods in America. In particular, America gets vehicles, machinery, crude oil and gold from these two countries.

Another advantage of NAFTA is that it increased trade between the three countries. America alone traded $1.6 trillion in services and goods with the other NAFTA Partners. Trade between America, Canada and Mexico has increased from $337 billion in 1993 before NAFTA was implemented to $1.182 trillion in 2011(Fontinelle, 2012).

A disadvantage of NAFTA is that the Mexican workers have benefited less than expected.  NAFTA encouraged U.S investment in Mexico inform of factories near the border. Mexican workers provide cheap labor for the production of U.S. goods. This arrangement has fallen short in that the Asian workers are proven cheaper than Mexican workers are.  In addition, the working conditions in these factories are very poor (Fontinelle, 2012).

Another disadvantage is that NAFTA lifted the trade tariffs and not the regulations. NAFTA did not do away with the numerous custom regulations that can reduce trade. There are rules that determine the records businesses must keep for trades under NAFTA and for how long.  If a business goods are deemed unqualified, the business can appeal. However, the procedures for NAFTA claims are different in all the countries (Fontinelle, 2012). Even without the tariffs, there are many other government-imposed barriers to trade in the three countries.

References

Fontinelle, A. (2012, December 16). Pros And Cons Of NAFTA | Investopedia. Retrieved March 16, 2016, from http://www.investopedia.com/financial-edge/1212/pros-and-cons-of-nafta.aspx

 
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