NAFTA

INTRODUCTION

The north America free trade agreement (NAFTA) is a comprehensive trade agreement that sets
the rules of trade and investment between Canada , ant the united states and Mexico
• NAFTA has systematically eliminated most tariff and non-tariff barriers to free trade and
investment between the three NAFTA countries
• Establishment : 1 January 1994
• Members : Canada , Mexico and united states
• Official languages : English , French and Spanish
• Secretariats : Mexico city , Ottawa, Washington D.C>
• NAFTA supplement : NAAEC & NAALC
OBJECTIVE OF NAFTA

• To eliminate trade barriers & facilitate the cross-border movements of goods and services between the
parties
• To promote conditions of fair competition
• To substantially increase investment opportunities
• To provide adequate and effective protection & enforcement of intellectual property rights in each
territory
• To create effective procedures for the implementation and application of this agreement ,for its joint
administration & for resolution of disputes
• To establish a framework for further trilateral, regional and multilateral co-operation to expand and
enhance benefits of this agreement
HOW DOES NAFTA WORKS?

• NAFTA is a formal agreement that establishes clear rules for commercial activity between Canada, the
United States, and Mexico.
• It is overseen by a number of institutions that ensure the proper interpretation and smooth implementation
of the Agreement’s provisions. 
• Free Trade Commission
• NAFTA Coordinators
• NAFTA working groups & committees
• NAFTA Secretariat
• Commission for labor Cooperation
• Commission for Environmental Cooperation
North America Agreement On Environmental
Co-operation (NAAEC)

•  The North American Agreement on Environmental

Cooperation (NAAEC) is an environmental agreement 
between the United States of America, Canada and  Mexico as a side-
treaty of the North American Free Trade  Agreement. 
• The agreement came into effect January 1, 1994.
• The agreement consists of a declaration of principles and 
objectives concerning conservation and the protection of 
the environment as well as concrete measures to further 
cooperation on these matters between the three countries. 
North America Agreement On Labour
Co-operation(NAALAC)

• The  North  American  Agreement  on  Labor  Cooperation  (NAALC)  was  signed  on  September  14, 
1993,  by  the  Presidents of Mexico and the United States, and the  Prime 
Minister of Canada, as one of the supplementary accords  to the North America 
Free Trade Agreement (NAFTA).
• It entered into force on January 1, 1994.
• The NAALC was the first international agreement on labor 
to be linked to an international trade agreement.
• It provides a mechanism for member countries to ensure 
the effective enforcement of existing and future domestic  labor  standards  and  laws  without  interfering 
in  the  sovereign  functioning  of  the  different  national  labor 
systems, an approach that made it novel and unique. 
PROVISIONS

NAFTA also seeks to eliminate non-tariff trade barriers and to 
protect the intellectual property right of the products
• Intellectual Property :   
  NAFTA  made some changes to the Copyright law of the 
United States foreshadowing the Uruguay Round Agreements 
Act of 1994 by restoring copyright (within NAFTA) on 
certain motion pictures which had entered the public domain.
• Environment :      A side agreement was negotiated on the environment with 
Canada and Mexico, the North American Agreement on 
Environmental Cooperation (NAAEC), which led to the 
creation of the Commission for Environmental  Cooperation(CEC) in 1994 
• Transportation infrastructure:
NAFTA established the CANAMEX Corridor for road transport 
between Canada and Mexico, also proposed for use by rail, 
pipeline, and fiber optic telecommunications infrastructure. This 
became a High Priority Corridor under the U.S. Intermodal Surface 
Transportation Efficiency Act of 1991.
• Agriculture:
three separate agreements were signed between each pair of parties. The
Canada-U.S. agreement contains significant restrictions and tariff quotas on
agriculture products (mainly sugar , dairy , and poultry products) , whereas the
Mexico – U.S. pact allows for a wider liberalization within a framework of
phase-out periods (it was the north- south FTA on agriculture to be signed).
BENEFITS OF NAFTA

• Benefits the importers by reduced or duty free goods.

• Trade and investment levels in North America have increased, bringing strong
economic growth, job creation, and better prices and selection in Consumer goods.
• There has been great increase in trade among the three countries and market
access within each country also increased considerably.
• Improved economic stability in the U.S. marketplace
• A marketplace that is increasingly driven more by supply and demand than by
barriers to commerce
 LIMITATIONS

• It has negative impacts on farmers in Mexico who saw food prices fall based on
cheap imports from U.S. agro business
• It has negative impacts on U.S. workers in manufacturing and assembly industries
who lost jobs.
• Critics also argue that NAFTA has contributed to the rising levels of inequality in
both the U.S. and Mexico.
• Some economists believe that NAFTA has not been enough (or worked fast enough)
to produce an economic convergence, nor to substantially reduce poverty rates
CONTRIBUTON TO NAFTA

MEMBER COUNTRY CONTRIBUTION/SUPLLY

Technology, Services, and data
UNITED STATES processing, medical and space research
and capital
Mineral, forest products, energy and
CANADA technological expertise
Labors, Petroleum and agricultural
MEXICO products
CONCLUSION

• The North American Free Trade Agreement (NAFTA) revolutionized trade

and investment in North America, helping to unlock our region’s economic
potential.
• it has helped to stimulate economic growth and create higher-paying jobs
across North America.
• It has provided North American businesses with better access to materials,
technologies, investment capital, and talent available across North America.
• It has proven that trade liberalization plays an important role in promoting
transparency, economic growth, and legal certainty.