Trade Agreement Of Nafta

Proponents of NAFTA in the United States have stressed that the pact is a free trade agreement and not an economic agreement. [37] The free movement of goods, services and capital based therein did not extend to labour. By proposing what no other similar agreement had attempted to open up to industrialized countries to “a great third world country”[38] – NAFTA renounced the establishment of a common social and employment policy. The regulation of the labour market and/or employment remained the exclusive responsibility of national governments. [37] Some small businesses have been directly affected by NAFTA. In the past, large companies have always had an advantage over small ones, because large companies could afford to build and maintain offices and/or production sites in Mexico and avoid so many old trade restrictions on exports. In addition, the laws established before NAFTA that the United States must establish a physical presence for small businesses. Small businesses were stuck, they couldn`t afford to build, and they couldn`t afford export tariffs. NAFTA aligned the conditions of competition by allowing small businesses to export to Mexico at the same cost as large companies and removing the requirement that a company establish a physical presence in Mexico to do business there.

The lifting of these restrictions has suddenly opened up huge new markets for small businesses that previously only operate in the United States. This was seen as particularly important for small businesses that were manufacturing goods or services that had matured in U.S. markets. One of the main NAFTA provisions granted to products imported from other NAFTA countries is the status of “domestic goods”. No national, provincial or local government could impose taxes or customs duties on these goods. In addition, either tariffs were eliminated at the time of the agreement or should be phased out in 5 or 10 equal steps. The only exception at exit was the specified sensitive stations, for which the end-of-life period is 15 years. When NAFTA negotiations began in 1991, the goal for the three countries was to integrate Mexico into the developed high-wage economies of the United States and Canada. .

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