Effect of the North American Free Trade Agreement on International Trade and Trade Policies (Essay Sample)

Effect of the North American Free Trade Agreement on International trade and Trade Policies
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Executive Summary
North American Free Trade Agreement (NAFTA) came into force after successful bilateral meetings between the United States and Canada, and later with Mexico. The free trade agreement commenced in 1994 and changed to United States-Mexico-Canada Agreement (USMCA) in 2020. NAFTA eased trade in the three member countries, leading to liberalization and opening of markets, enhanced global competitiveness, more investment opportunities, and protection of intellectual property rights. The agreement has faced diverse challenges, including loss of wages, and has been subject to renegotiations. It is recommended that easing some policies would reduce the pressure on individual countries to improve fairness.
Contents TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc111708467 \h 2Introduction PAGEREF _Toc111708468 \h 4Background PAGEREF _Toc111708469 \h 4History PAGEREF _Toc111708470 \h 4Statistics PAGEREF _Toc111708471 \h 5Trade Instrument PAGEREF _Toc111708472 \h 6NAFTA-trade policies and procedure PAGEREF _Toc111708473 \h 6Critical Review PAGEREF _Toc111708474 \h 8Recommendation PAGEREF _Toc111708475 \h 9Conclusion PAGEREF _Toc111708476 \h 9References PAGEREF _Toc111708477 \h 11
Effect of the North American Free Trade Agreement on International trade and Trade Policies
Introduction
The North American Free Trade Agreement (NAFTA) came into force after successful bilateral meetings between the United States and Canada and later with Mexico (USTR 2022a). The trade zone eliminated all tariffs, duties, and quantitative restrictions. NAFTA aims to reduce trading costs, increase commercial investments, and enhance North America's global competitiveness (Amadeo 2019). In 2020, NAFTA was changed to United States-Mexico-Canada Agreement (USMCA) (USTR 2022b). The paper looks at the trade challenges and barriers that NAFTA policies seek to ease. In light of this, the paper gives a background of NAFTA, its policies and procedures, the barriers and challenges of implementation, and some potential recommendations for improving NAFTA.
Background
History
NAFTA was enacted in 1994, creating a free trade zone for the United States, Canada, and Mexico (IATP 2022). NAFTA eliminated tariffs and quotas on exports and qualitative restrictions on several products by 2008 (IATP 2022). NAFTA enshrines its purpose in diverse goals. First, it grants the signatories a preferential status and facilitates cross-border movements of goods and services (Chatzky et al. 2020). Also, NAFTA seeks to eliminate trade barriers, encourages fair competition, and vouches for increased investment opportunities (Chatzky et al. 2020). In addition, it seeks to protect and enforce intellectual property rights, resolve trade disputes, and enhance trilateral and regional cooperation amongst member states. Chatzky et al. (2020) state that since the implementation of NAFTA, foreign investment has increased in the three countries. Notably, NAFTA was subject to