The Success of the North American Free Trade Agreement (NAFTA) :: Business Economics

The Success of the North American Free Trade Agreement (NAFTA) On January 1, of 1994 a new approach to trade amongst North American countries took effect. With the aid of the United States Congress, President Bill Clinton was able to form a contract between The North American Countries of Canada, Mexico, and The United States of America. This contract, known as the North American Free Trade Agreement (or Nafta for short) was designed with many economic results in mind. Hopes were that not only would trade be easier, cheaper, and more abundant for all countries evolved, but economic wealth and growth would follow. Support for Nafta was split among most citizens of this country. One side seeing the proposal as having the potential for great economic success in each country involved. The other announcing that this plan would prove to be terribly detrimental to United States employment. Nearly six years after coming into effect the question still remains Is Nafta in the best interest of the United States? And what can we expect of it in the fu ture? Since the implication of free trade between the three countries of North America back in 1994 the effects of that agreement are just now becoming apparent, both short term and long term. There was little doubt as to how both Canada and most definitely Mexico would benefit from Nafta. What was yet to be seen was the impact it had on previous concerns of the United States.(Contesting Globalization) Most economists and even ordinary citizens could understand Canada and Mexico’s enthusiasm when free trade, destroying tariffs, was proposed. After all, the United States has long been the major consumer of exported goods in both countries. No longer having to pay taxes on goods imported into the United States meant larger sales and more profits for all Canadian and Mexican businesses. These profits were foreseen as perpetual economic boosts in their respective country. These boosts created opportunities for more workers to be hired, lowering unemployment and helping to improve t he quality of life of citizens in both countries. Not only did removing the tariffs make it possible for companies and manufacturers of Canada and Mexico to increase profits it also lowered to price of foreign goods. These new lower prices were now able to compete with the domestic products in the United States.