ECONOMICS (CBSE/UGC NET)

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: -Among its three member nations, NAFTA eliminated tariffs and other trade barriers to agricultural and manufactured goods, along with services. It also removed investment restrictions and protected intellectual property rights.

Detailed explanation-3: -As of January 1, 2008, all tariffs and quotas were eliminated on U.S. exports to Mexico and Canada under the North American Free Trade Agreement (NAFTA). Mexico is the United States’ third largest trading partner and second largest export market for U.S. products.

Detailed explanation-4: -North American Free Trade Agreement (NAFTA) established a free-trade zone in North America; it was signed in 1992 by Canada, Mexico, and the United States and took effect on Jan. 1, 1994. NAFTA immediately lifted tariffs on the majority of goods produced by the signatory nations.

Detailed explanation-5: -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.