ECONOMICS
BARRIERS TO TRADE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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by reducing barriers to immigration
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by imposing new tariffs on goods
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by creating a common currency
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by eliminating barriers to trade
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Detailed explanation-1: -In short, NAFTA created a large free-trade zone reducing or eliminating tariffs on imports and exports between the three participating countries (the U.S, Mexico, and Canada). Overall, there was an increase in trade between the three countries, and real per-capita GDP also increased slightly.
Detailed explanation-2: -The North American Free Trade Agreement (NAFTA) was implemented in 1994 to encourage trade between the U.S., Mexico, and Canada. NAFTA reduced or eliminated tariffs on imports and exports between the three participating countries, creating a huge free-trade zone.
Detailed explanation-3: -The labor side agreement within NAFTA also affected the ability of workers to organize into unions, which in turn affected the quality of work available for workers. This agreement, along with the rest of NAFTA, made it harder for the Mexican government to neglect following its own labor laws.
Detailed explanation-4: -Since NAFTA’s implementation, U.S. agricultural trade with its partners in the agreement has increased in both size and relative importance. Between 1993 and 2000, U.S. agricultural exports to Canada and Mexico expanded by 59 percent, while corresponding exports to the rest of the world grew only 10 percent.
Detailed explanation-5: -Following the NAFTA agreement, preferential trading with Mexico made it profitable for U.S. and multinational companies to manufacture goods in America, as these could then be exported throughout North America without tariffs. This allowed Mexico to diversify its export economy and shift away from oil significantly.