North American Free Trade Agreement

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North American Free Trade Agreement (NAFTA)

A regional trade pact among the United States, Canada, and Mexico.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

North America Free Trade Agreement

A controversial free trade agreement between Canada, Mexico, and the United States. Signed in 1993, it was the first free trade agreement between a developing nation (Mexico) and two developed nations. The agreement reduced or eliminated most trade restrictions between the participants. In particular, NAFTA allowed for the more or less free importation and exportation of agricultural products and textiles. Proponents of NAFTA argue that the agreement allowed for cheaper access to goods, especially food, which in turn increased the real incomes in all three countries. Critics contend that the agreement has not substantially reduced poverty in any of the participating countries. Mexican critics complain that NAFTA reduced profits for farmers and agricultural workers unable to compete with American agribusiness.

American organized labor have argued that the agreement has accelerated deindustrialization and caused job losses because it has become cheaper for American companies to move factories to Mexico and hire Mexican workers. NAFTA proponents note that employment in the United States increased between 1993 and 2007, and that factories in the U.S. were closing even before NAFTA was signed.

Canadian opposition to NAFTA has been largely related to environmental concerns, particularly the lack of oversight for the enforcement of its environmental provisions. Because NAFTA allows Canadian water to be bought and sold as a commodity, some environmental groups have been concerned that this would cause the degradation of Canadian wild lands. See also: Maquiladora.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

North American Free Trade Agreement (NAFTA)

a regional FREE-TRADE AREA established in 1989 by the USA and Canada. NAFTA set about removing tariffs on most manufactured goods, raw materials and agricultural produce over a 10-year period, as well as restrictions on cross-border investment, banking and financial services. Mexico joined NAFTA in 1993 with the aim of removing tariffs between Mexico and the other two countries by 2009. NAFTA has a similar market size (population 414 million) as that of the EUROPEAN UNION. See TRADE INTEGRATION.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
In the particular case of Mexico, an additional incentive for joining North American Free Trade area was to ensure that outward looking trade and economic liberalisation policies, introduced by Mexico after many years of protectionist policies followed in the past, become irreversible by tying them within the Free Trade Area arrangement with the U.S.A.
We say that the North American Free Trade Area will not turn into Fortress NAFTA.
DTI has recently opened discussions for possible FTA with Mexico and Canada, both members of the North American Free Trade Area (NAFTA).
At present the EU represents the world's largest trading group, with a population of half a billion; also remember that negotiations are in progress with the North American Free Trade Area.

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