NAFTA was an agreement signed in 1992 between the United States, Canada, and Mexico to establish a free trade zone and eliminate barriers to trade and investment between the countries. It aimed to promote competition and allow free movement of goods, services, and capital. While NAFTA increased trade between the countries and benefited some businesses and economic elites, it also resulted in job losses in some industries and increased inequality and poverty in Mexico. There continues to be debate around its overall economic and social impacts.

1. NORTH AMERICAN FREE TRADE
AGREEMENT
Presented By : VAIBHAV K. KADU
MCOM – I Roll No :

2. NAFTA : WHAT ?
NAFTA was written to create a Free Trade Area in
North America
 “Free Trade” means that countries may freely
trade goods with each other without having to
pay a tariff (tax) on those goods.
 In other words, “free trade’’ means no trade
barriers.

3. INTRODUCTION
 NAFTA is the extension of Canada-U.S. Trade Agreement (CUSTA)
of 1988 for eliminating all tariff barriers. Later in 1993, Mexico
joined them to form the NAFTA.
 NAFTA was signed by U.S. President George H.W. Bush, Mexican
President Carlos Salinas de Gotari, and Canadian Prime Minister
Brian Mulroney in 1992.
 It was ratified by the legislatures of the three countries in 1993.
 NAFTA was signed into law by President Bill Clinton on December
8, 1993.

4. AGREEMENT AFFECTS
 NAFTA covers Canada, the U.S. and Mexico making it the world's
largest free trade area in terms of GDP.
 Prior to NAFTA, Mexican tariffs on U.S. imports were 250% higher
than U.S. tariffs on Mexican imports.
 In 1991, Canada requested a trilateral agreement, which then led to
NAFTA.
 In 1993, concerns about liberalization of labour and environmental
regulations led to the adoption of two addendums to NAFTA.
 As of January 1st, 2008, all tariffs between the three countries have
been eliminated.

5. OBJECTIVES
The Purpose of The Agreement is to:
 Allow free movement of goods and services among the
countries.
 Promote competition in the free trade areas.
 Protect the property rights of people and businesses in each
country.
 Be able to resolve problems that arise among the countries.
 Encourage cooperation among countries.

6. ADVANTAGES OF NAFTA
 Benefit’s the importers by reduced or duty free goods.
 Can make the exporters more competitive than other non-
participating countries.
 There has been great increase in trade among the three countries and
market access within each country also increased considerably.
 Mexico's poverty rate decreased and real income increase, even after
economic crises 1994-1995
 NAFTA has been beneficial to business owners and elites in all three
countries

7. DISADVANTAGE OF NAFTA
 Increase in productivity and growth is not very high
 NAFTA resulted in net loss of 394,834 jobs in first three years itself
 Many Canadian and Mexican people migrated to USA under
temporary status & Treaty’s National Dependant Status (TDS)
 Yet there is no Net increase in employment level

8. LIMITATIONS
 It has negative impact on farmers in Mexico who say food prices fall
based on cheap imports from US agribusiness
 It has negative impact on US workers in manufacturing and
assembly industries who lost jobs
 Critic also argue that NAFTA has contributed to the rising levels of
in equality in both the US and Mexico
 Some economist believe that NAFTA has not been enough (or
worked fast enough) to produce an economic convergence, nor to
substantially reduce poverty rates

9. CONCLUSION
NAFTA has played an important role in the overall development of the
three nations
- Dispute resolution
- Commitment to intellectual property & environment legislation
- Mutual entry into government bidding & the financial and other
service sector
- The progressive elimination of tariffs and trade barriers
But on the other hand it is also responsible for causalities like loss of
jobs, migration, raising level of inequality and many other