Agreement on Tariff and Trade (GATT) is a common term in international trade. However, when it comes to North America, there is another term that is more commonly used: the North American Free Trade Agreement (NAFTA). NAFTA is an agreement between the United States, Canada, and Mexico that governs the trade of goods and services between the three countries.
NAFTA was signed in 1992 and went into effect on January 1, 1994. The agreement eliminated tariffs on goods traded between the three countries, allowing for easier and more efficient trade. It also provided for the protection of intellectual property rights and established a dispute resolution mechanism to settle disagreements over trade issues.
NAFTA has had a significant impact on the economies of the three countries involved. It has led to increased trade and investment, as well as job creation in certain industries. For example, the automotive industry is heavily reliant on the agreement as goods move between the three countries during production.
However, NAFTA has also been the subject of much criticism. Some argue that the agreement has led to job losses in certain industries, especially in the United States. Others have criticized the environmental and labor standards set by the agreement, claiming that they are not strong enough to protect workers and the environment.
In recent years, NAFTA has been renegotiated by the three countries, resulting in the United States-Mexico-Canada Agreement (USMCA), which went into effect on July 1, 2020. The agreement maintains many of the provisions of NAFTA but also includes updates to reflect changes in technology and the economy.
Overall, NAFTA has had a significant impact on North American trade and has shaped the economies of the three countries involved. While the agreement has been the subject of criticism, it remains an important part of international trade relations. As such, it is important for trade professionals and business leaders to have a good understanding of NAFTA and its impact on trade between the United States, Canada, and Mexico.