North American Free Trade Agreement NAFTA

GENERAL INFORMATION

NAFTA is formed by USA, Canada and Mexico

First question WHY? Second question- are these economies complementary or are they competing? Third question the level of economic development in the three countries leads to co-operation or to division?

Reminder
USA At 3.79 million square miles (9.83 million km2) and with around 315 million people, the United States is the third- or fourth-largest country by total area and the third-largest by both land area and population. The United States is a developed country and has the world's largest national economy, with an estimated 2012 GDP of $15.6 trillion 19% of global GDP at purchasing-power parity, as of 2011. The per capita GDP of the U.S. was the world's sixth-highest as of 2010, although America's wealth inequality was also ranked highest among OECD countries. The economy is fueled by an abundance of natural resources, a welldeveloped infrastructure, and high productivity, and while its economy is considered post-industrial it continues to be one of the world's largest manufacturers. The country accounts for 41% of global military spending and is a leading economic, political, and cultural force in the world, as well as a leader in scientific research and technological innovation.

 The United States has a capitalist mixed economy, which is fueled by abundant natural resources, a well-developed infrastructure, and high productivity. Though larger than any other nation's, its national GDP was about 5% smaller at PPP in 2011 than the European Union's, whose population is around 62% higher. The United States is the largest importer of goods and second largest exporter, though exports per capita are relatively low. In 2010, the total U.S. trade deficit was $635 billion. Canada, China, Mexico, Japan, and Germany are its top trading partners. In 2010, oil was the largest import commodity, while transportation equipment was the country's largest export. China is the largest foreign holder of U.S. public debt.

 In 2009, the private sector was estimated to constitute 86.4% of the economy, with federal government activity accounting for 4.3% and state and local government activity (including federal transfers) the remaining 9.3%. While its economy has reached a postindustrial level of development and its service sector constitutes 67.8% of GDP, the United States remains an industrial power.The leading business field by gross business receipts is wholesale and retail trade; by net income it is manufacturing.

 Personal transportation is dominated by automobiles, which operate on a network of 13 million roads,including one of the world's longest highway systems. The world's second largest automobile market,the United States has the highest rate of per-capita vehicle ownership in the world, with 765 vehicles per 1,000 Americans. About 40% of personal vehicles are vans, SUVs, or light trucks. The average American adult (accounting for all drivers and nondrivers) spends 55 minutes driving every day, traveling 29 miles (47 km).

Canada Canada is the world's second-largest country by total area, and its common border with the United States is the world's longest land border. Canada is a federal state governed as a parliamentary democracy and a constitutional monarchy, with Queen Elizabeth II as its head of state. The country is officially bilingual and multicultural at the federal level, with a population of approximately 35 million as of 2013. Canada's advanced economy is one of the largest in the world, relying chiefly upon its abundant natural resources and well-developed trade networks, especially with the United States, with which it has had a long and complex relationship.

 Canada is a developed country, with the ninth highest per capita income globally, and the 11th highest ranking in human development. Subsequently, Canada ranks among the highest in international measurements of education, government transparency, civil liberties, quality of life, and economic freedom. Canada is a recognized middle power and a member of many international institutions, including the G7, G8, G20, NATO, NAFTA, OECD, WTO, Commonwealth of Nations, Francophonie, OAS, APEC, and the United Nations.

 Canada is a federation composed of ten provinces and three territories. Provinces have more autonomy than territories, having responsibility for social programs such as health care, education, and welfare. Together, the provinces collect more revenue than the federal government, an almost unique structure among federations in the world. Using its spending powers, the federal government can initiate national policies in provincial areas, such as the Canada Health Act; the provinces can opt out of these, but rarely do so in practice. Equalization payments are made by the federal government to ensure that reasonably uniform standards of services and taxation are kept between the richer and poorer provinces.

 Canada is the world's eleventh-largest economy, with a 2012 nominal GDP of approximately US$1.77 trillion. It is a member of the Organisation for Economic Co-operation and Development (OECD) and the G8, and is one of the world's top ten trading nations, with a highly globalized economy. Canada is a mixed economy, ranking above the US and most western European nations on the Heritage Foundation's index of economic freedom, and experiencing a relatively low level of income disparity. In 2008, Canada's imported goods were worth over $442.9 billion, of which $280.8 billion originated from the United States, $11.7 billion from Japan, and $11.3 billion from the United Kingdom. The country's 2009 trade deficit totaled C$4.8 billion, compared with a C$46.9 billion surplus in 2008.

 Since the early 20th century, the growth of Canada's manufacturing, mining, and service sectors has transformed the nation from a largely rural economy to an urbanized, industrial one. Like many other First World nations, the Canadian economy is dominated by the service industry, which employs about three-quarters of the country's workforce. However, Canada is unusual among developed countries in the importance of its primary sector, in which the logging and petroleum industries are two of the most prominent components.

 Canada is one of the few developed nations that are net exporters of energy. Atlantic Canada possesses vast offshore deposits of natural gas, and Alberta also hosts large oil and gas resources. The immense Athabasca oil sands give Canada the world's second-largest proven oil reserves, after Saudi Arabia. Canada is additionally one of the world's largest suppliers of agricultural products; the Canadian Prairies are one of the most important global producers of wheat, canola, and other grains. Canada is a major producer of zinc and uranium, and is a leading exporter of many other minerals, such as gold, nickel, aluminum, and lead. Many towns in northern Canada, where agriculture is difficult, are sustainable because of nearby mines or sources of timber. Canada also has a sizable manufacturing sector centred in southern Ontario and Quebec, with automobiles and aeronautics representing particularly important industries.

Mexico Mexico is a country in North America. Mexico resides under Texas and other American states. Guatemala and Belize are south of Mexico. Mexico is between the Pacific Ocean and the Gulf of Mexico.Covering almost two million square kilometres (over 760,000 sq mi, Mexico is the fifth largest country in the Americas by total area and the 13th largest independent nation in the world. With an estimated population of over 113 million, it is the world's eleventh most populous country and the most populous Spanish-speaking country. Mexico is a federation comprising thirty-one states and a Federal District, the capital city.

 Mexico has the 14th largest nominal GDP and the 11th largest by purchasing power parity. GDP annual average growth for the period of 19952002 was 5.1%. 17% of the population lives below Mexico's own poverty line, ranking behind Kazakhstan, Bulgaria and Thailand. From the late 1990s, the majority of the population has been part of the growing middle class. But from 2004 to 2008 the portion of the population who received less than half of the median income has risen from 17% to 21% and the absolute levels of poverty have risen considerably from 2006 to 2010, with a rise in persons living in extreme or moderate poverty rising from 35 to 46% (52 million persons). This is also reflected by the fact that infant mortality in Mexico is three times higher than the average among OECD nations, and the literacy levels are in the median range of OECD nations. According to Goldman Sachs, by 2050 Mexico will have the 5th largest economy in the world.

 Among the OECD countries, Mexico has the second highest degree of economic disparity between the extremely poor and extremely rich, after Chile although it has been falling over the last decade. The bottom ten percent in the income hierarchy disposes of 1.36% of the country's resources, whereas the upper ten percent dispose of almost 36%. OECD also notes that Mexico's budgeted expenses for poverty alleviation and social development is only about a third of the OECD average both in absolute and relative numbers.

 Mexico is the largest North American auto-producing nation, recently surpassing Canada and the U.S. The industry produces technologically complex components and engages in some research and development activities. The "Big Three" (General Motors, Ford and Chrysler) have been operating in Mexico since the 1930s, while Volkswagen and Nissan built their plants in the 1960s. In Puebla alone, 70 industrial part-makers cluster around Volkswagen. The relatively small domestic car industry is represented by DINA S.A., which has built buses and trucks for almost half a century, and the new Mastretta company that builds the high performance Mastretta MXT sports car.

 Major players in the broadcasting industry are Televisa, the largest Spanish media company in the Spanish-speaking world, and TV Azteca. Mexico reports the 23rd highest tourism-based income in the world, and the highest in Latin America.The vast majority of tourists come to Mexico from the United States and Canada followed by Europe and Asia. A smaller number also come from other Latin American countries. In the 2008 Travel and Tourism Competitiveness Index, fifth among Latin American countries, and the ninth in the Americas.

NAFTA per se
Implementation of the North American Free Trade Agreement (NAFTA) began on January 1, 1994. This agreement removes most barriers to trade and investment among the United States, Canada, and Mexico. Under the NAFTA, all non-tariff barriers to agricultural trade between the United States and Mexico were eliminated. In addition, many tariffs were eliminated immediately, with others being phased out over periods of 5 to 15 years. This allowed for an orderly adjustment to free trade with Mexico, with full implementation beginning January 1, 2008.

NAFTA per se
The agricultural provisions of the U.S.-Canada Free Trade Agreement, in effect since 1989, were incorporated into the NAFTA. Under these provisions, all tariffs affecting agricultural trade between the United States and Canada, with a few exceptions for items covered by tariff-rate quotas, were removed by January 1, 1998. Mexico and Canada reached a separate bilateral NAFTA agreement on market access for agricultural products. The Mexican-Canadian agreement eliminated most tariffs either immediately or over 5, 10, or 15 years. Tariffs between the two countries affecting trade in dairy, poultry, eggs, and sugar are maintained.

NAFTA per se
On January 1, 1994, the North American Free Trade Agreement between the United States, Canada, and Mexico (NAFTA) entered into force. All remaining duties and quantitative restrictions were eliminated, as scheduled, on January 1, 2008. NAFTA created the world's largest free trade area, which now links 450 million people producing $17 trillion worth of goods and services. Trade between the United States and its NAFTA partners has soared since the agreement entered into force.

NAFTA per se
U.S. goods and services trade with NAFTA totaled $1.6 trillion in 2009 (latest data available for goods and services trade combined). Exports totaled $397 billion. Imports totaled $438 billion. The U.S. goods and services trade deficit with NAFTA was $41 billion in 2009. The United States has $918 billion in total (two ways) goods trade with NAFTA countries (Canada and Mexico) during 2010. Goods exports totaled $412 billion; Goods imports totaled $506 billion. The U.S. goods trade deficit with NAFTA was $95 billion in 2010. Trade in services with NAFTA (exports and imports) totaled $99 billion in 2009 (latest data available for services trade). Services exports were $63.8 billion. Services imports were $35.5 billion. The U.S. services trade surplus with NAFTA was $28.3 billion in 2009.

NAFTA per se
Exports The NAFTA countries (Canada and Mexico), were the top two purchasers of U.S. exports in 2010. (Canada $248.2 billion and Mexico $163.3 billion). U.S. goods exports to NAFTA in 2010 were $411.5 billion, up 23.4% ($78 billion) from 2009, and 149% from 1994 (the year prior to Uruguay Round) and up 190% from 1993 (the year prior to NAFTA). U.S. exports to NAFTA accounted for 32.2% of overall U.S. exports in 2010. The top export categories (2-digit HS) in 2010 were: Machinery ($63.3 billion), Vehicles (parts) ($56.7 billion), Electrical Machinery ($56.2 billion), Mineral Fuel and Oil ($26.7 billion), and Plastic ($22.6 billion). U.S. exports of agricultural products to NAFTA countries totaled $31.4 billion in 2010. Leading categories include: red meats, fresh/chilled/frozen ($2.7 billion), coarse grains ($2.2 million), fresh fruit ($1.9 billion), snack foods (excluding nuts) ($1.8 billion), and fresh vegetables ($1.7 billion). U.S. exports of private commercial services* (i.e., excluding military and government) to NAFTA were $63.8 billion in 2009 (latest data available), down 7% ($4.6 billion) from 2008, but up 125% since 1994.

NAFTA per se
The NAFTA countries were the second and third largest suppliers of goods imports to the United States in 2010. (Canada $276.5 billon, and Mexico $229.7 billion). U.S. goods imports from NAFTA totaled $506.1 billion in 2010, up 25.6% ($103 billion), from 2009, and up 184% from 1994, and up 235% from 1993. U.S. imports from NAFTA accounted for 26.5% of overall U.S. imports in 2010. The five largest categories in 2010 were Mineral Fuel and Oil (crude oil) ($116.2 billion), Vehicles ($86.3 billion), Electrical Machinery ($61.8 billion), Machinery ($51.2 billion), and Precious Stones (gold) ($13.9). U.S. imports of agricultural products from NAFTA countries totaled $29.8 billion in 2010. Leading categories include: fresh vegetables ($4.6 billion), snack foods, (including chocolate) ($4.0 billion), fresh fruit (excluding bananas) ($2.4 billion), live animals ($2.0 billion), and red meats, fresh/chilled/frozen ($2.0 billion).

NAFTA per se
U.S. imports of private commercial services* (i.e., excluding military and government) were $35.5 billion in 2009 (latest data available), down 11.2% ($4.5 billion) from 2008, but up 100% since 1994. Trade Balances The U.S. goods trade deficit with NAFTA was $94.6 billion in 2010, a 36.4% increase ($25 billion) over 2009. The U.S. goods trade deficit with NAFTA accounted for 26.8% of the overall U.S. goods trade deficit in 2010. The United States had a services trade surplus of $28.3 billion with NAFTA countries in 2009 (latest data available).

NAFTA per se
Investment U.S. foreign direct investment (FDI) in NAFTA Countries (stock) was $357.7 billion in 2009 (latest data available), up 8.8% from 2008. U.S. direct investment in NAFTA Countries is in nonbank holding companies, and in the manufacturing, finance/insurance, and mining sectors. NAFTA Countries FDI in the United States (stock) was $237.2 billion in 2009 (latest data available), up 16.5% from 2008. NAFTA countries direct investment in the U.S. is in the manufacturing, finance/insurance, and banking sectors.

NAFTA US evaluation
The Bottom Line: NAFTA provides an annual tax cut and income gain - Households enjoy higher income from both an increase in the national income as well as a reduction in taxes resulting from the NAFTA. The following are the annual benefits: NAFTA = $350 to $930 in annual benefits per average family of four. NAFTA Raises GDP and Income - A number of formal mathematical studies of the North American Free Trade Agreement found that the NAFTA, when fully implemented, would raise U.S. GDP by between 0.1% and 0.5%. Relative to the size of the economy in 2000, these estimates suggest and an income gain of between $10 billion and $50 billion. Per an average household of four, this translates into a per year income gain of $140 to $720.

NAFTA USA evaluation

- These studies of NAFTA benefits understate the gains from trade because of high product aggregation, incomplete accounting of the growth effects of trade and the inability to measure the effects of many non-tariff measures, rules changes and trade in services. NAFTA lowers prices - NAFTA/CFTA (U.S.-Canada Free Trade Agreement): Had NAFTA/CFTA tariff rates been applied to 1999 U.S. imports, duty collections would have an estimated $ 14.2 billion higher. The NAFTA/CFTA tariff cuts were thus similar to a $210 tax cut for an average household of four.

NAFTA USA evaluation

How has NAFTA benefited the United States? Trade and Investment Flows Have Substantially Increased From 1993 to 2006, trade among the NAFTA nations climbed 198 percent, from $297 billion to $883 billion. U.S. merchandise exports to our NAFTA partners grew more rapidly at 157 percent than exports to the rest of the world, at 108 percent. As of 2006, each day the NAFTA countries conducted nearly $2.4 billion in trilateral trade. Canada and Mexico accounted for 35 percent of total U.S. exports. For agriculture, Canada and Mexico alone account for 50 percent of the increase in U.S. agricultural exports to the world since 1993. NAFTA has been good for Mexican agriculture. Trade growth has been remarkably balanced, with U.S. agricultural exports to Mexico increasing by $7.3 billion and U.S. agricultural imports from Mexico increasing by $6.7 billion during the last 13 years. Result: U.S. Economic Growth during the 14 years of NAFTA Has Been Strong

NAFTA USA evaluation

Jobs. U.S. employment rose from 112.2 million in December 1993 to 137.2 million in December 2006, an increase of 25 million jobs, or 22 percent. Manufacturing. U.S. manufacturing output rose by 63 percent between 1993 and 2006, exceeding the 37 percent increase achieved between 1980 and 1993. Average real compensation grew at an average annual rate of 1.6 percent from 1993 to 2006, compared to just 0.9 percent annually between 1980 and 1993. Investment. Productive investment, central to rising living standards, has increased. Even excluding housing, U.S. non-residential fixed, or business, investment has risen by 107 percent since 1993, compared to a 45 percent increase between 1980 and 1993.

NAFTA a Canadian Evaluation

A Foundation for Canadas Future Prosperity The North American Free Trade Agreement (NAFTA), signed by Prime Minister Brian Mulroney, Mexican President Carlos Salinas, and U.S. President George H.W. Bush, came into effect on January 1, 1994. Since 1993, NAFTA has generated economic growth and rising standards of living for the people of all three member countries. By strengthening the rules and procedures governing trade and investment throughout the continent, NAFTA has proved to be a solid foundation for building Canadas future prosperity.

NAFTA a Canadian Evaluation

Canada's merchandise trade with its NAFTA partners reached nearly $626.3 billion in 2008. Canadian merchandise exports to the United States grew at a compounded annual rate of almost 6.3% between 1993 and 2008. Canadas bilateral trade with Mexico was close to $23.8 billion in 2008. Approximately eighty percent of Canadas total merchandise exports were destined to NAFTA partners in 2008. Total merchandise trade between Canada and the United States more than doubled between 1993 and 2008. Trade between Canada and Mexico has more than quadrupled over the same period. Trade in services has also increased under NAFTA. Canada's trade in services with the United States and Mexico grew has doubled from $42.9 billion in 1993 to $86.5 billion in 2005. Canadas trade in services with the United States reached $91.3 billion in 2008, up from $42.3 billion in 1993. Two-way trade in services between Canada and Mexico reached $1.8 billion in 2006.

NAFTA a Canadian Evaluation

In turn, the enhanced economic activity and production in the region have contributed to the creation of jobs for Canadians. One in five jobs in Canada is related in part to trade. More than 4.3 million net new jobs have been created in Canada between 1993 and 2008. For Canadians, it is important that trade and investment liberalization proceed hand in hand with efforts to protect the environment and improve working conditions. Under NAFTA, the three countries have been able to introduce the successful approach of parallel environmental and labour cooperation agreements.

NAFTA a Canadian Evaluation

The economic collaboration promoted by NAFTA has spurred better environmental performance across the region. Through the North American Agreement on Environmental Cooperation, the three partners agreed to promote the effective enforcement of environmental laws. Through the North American Agreement on Labour Cooperation, the three partners agreed to work together to protect, enhance and enforce basic workers rights. A strong, modern and flexible NAFTA is important for the continent to maintain its competitiveness in an increasingly complex and connected global marketsplace. Canada and its NAFTA partners will continue to work together to reduce the costs of trading within the region and to improve the competitiveness of North America.

NAFTA a Canadian Evaluation

The Program for North American Mobility in Higher Education provides funding that aims to improve and increase: the quality of human resource development and ways to prepare students for work in the global economy; North American student mobility; institutional partnerships among post-secondary schools in Canada, the United States and Mexico; and a trilateral exchange of knowledge and expertise in higher education and training.

NAFTA a Canadian Evaluation The Program was established in 1995, in keeping with the spirit of the North American Free Trade Agreement (NAFTA), to encourage co-operation in higher education and training among the three countries with a focus on student mobility. Since its inception, universities and colleges from all regions of Canada have participated in a wide range of trilateral projects with institutions in the United States and Mexico. The trilateral partnership activities include the innovative use of new learning technologies to maximize student participation

NAFTA a Canadian Evaluation

Key Outcomes Canadian students acquire employment-related international skills, knowledge and expertise, including linguistic and cultural understanding, within a North American context; Canadian universities and colleges develop academic credit transfer agreements with partner institutions in the United States and Mexico which facilitate student mobility; Students' knowledge and understanding within their disciplines of study is strengthened and enhanced through trilateral development of curriculum, courses, and teaching materials.

NAFTA THE WAY AHEAD

Investment By establishing a strong, certain, and transparent framework for investment, the NAFTA creates an environment of confidence and stability required to make long-term investments. As a result, investment has poured into each of the NAFTA countries since 1994. In 2006, foreign direct investment (FDI) by each of the NAFTA partners in the other countries reached USD 533 billion, more than triple the USD 138 billion figure registered in 1993. NAFTA has also stimulated increased investment from countries outside of NAFTA. In 2005, North America received USD 151.3 billion in new investment, or 17 percent of the worlds total. In 2005, the current stock of FDI in North America was USD 2.2 trillion, or 21.6 percent of the worlds total.

NAFTA THE WAY AHEAD

Expanding prosperity while Enhancing security Recognizing that economic prosperity and security must be mutually reinforcing, Canada, Mexico and the United States launched the Security and Prosperity Partnership (SPP) in 2005. The SPP builds upon existing trilateral mechanisms and relationships to enhance cooperation on issues that affect the security and prosperity of North America, and the quality of life of its citizens. The SPP initiatives form an agenda for cooperation among the three countries of North America in areas such as combating crime and terrorism, competitiveness, and public health and safety. For example, the NAFTA Free Trade Commission manages the SPP initiative to facilitate the movement of goods. Since 2005, the NAFTA partners have implemented two sets of changes to liberalize the rules of origin and make it easier for traders to qualify for dutyfree treatment under the NAFTA. The total value of trade covered by these changes exceeds USD 60 billion per year.

NAFTA THE WAY AHEAD

Leaders in International Trade The NAFTA has demonstrated that trade liberalization plays an important role in stimulating economic growth. They reaffirm their commitment to a successful marketopening outcome for the World Trade Organization Doha Development Agenda, one that spurs meaningful new trade flows, economic growth and development. At the regional level, their vision remains of the hemisphere in a Free Trade Area of the Americas. At the bilateral level, each of our countries has built on the NAFTA experience to negotiate additional free trade agreements. Since 1994:

NAFTA THE WAY AHEAD

Canada has free trade agreements with Israel, Chile, and Costa Rica, and has concluded free trade agreement negotiations with the members countries of the European Free Trade Association (EFTA: Iceland, Liechtenstein, Norway and Switzerland). Canada is currently in the process of negotiating free trade agreements with four countries in Central America (El Salvador, Guatemala, Honduras and Nicaragua), Singapore, Korea, and has recently launched free trade agreement negotiations with the Andean Community countries of Colombia and Peru, the Dominican Republic and the Caribbean Community (CARICOM).A Deep and Comprehensive Free Trade Agreement with the EU is in a final phase of negotiations.

NAFTA THE WAY AHEAD

The United States has free trade agreements with Jordan, Chile, Singapore, Australia, Morocco, Bahrain, the Dominican Republic and five countries in Central America (CAFTA-DR: Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Costa Rica has not yet ratified the agreement). The United States has recently signed free trade agreements with Peru, Colombia, Panama, and Korea, and is currently negotiating a free trade agreement with Malaysia. The U.S.-Oman Free Trade Agreement will enter into force upon Omans completion of its domestic procedures. A Free Trade Agreement has been finalized with the Republic of Korea, but not concluded yet.

NAFTA THE WAY AHEAD

Mexico has concluded free trade agreements with Chile, the European Union, the European Free Trade Association, Israel, Bolivia, Colombia, Nicaragua, the Central America Northern Triangle (El Salvador, Guatemala, and Honduras), Costa Rica, Uruguay and Japan.

NAFTA THE WAY AHEAD

Protecting the Environment The NAFTA partners are committed to protecting the environment. Business integration has spurred better environmental performance across the region by facilitating the transfer of green technologies and marketbased solutions to environmental problems and, ultimately, by increasing national wealth. In addition, through the Commission for Environmental Cooperation (CEC), created under the North American Agreement on Environmental Cooperation, the NAFTA partners have promoted policies and actions that provide mutual benefits for the environment, trade, and the economy.

NAFTA THE WAY AHEAD

For example, the Council, the CECs governing body, recently welcomed discussions among the three governments to promote long-term competitiveness and environmental sustainability in North America. It also supported efforts to improve cooperation between the CEC and the Free Trade Commission on issues concerning increased trade and improved environmental performance. In addition, the CEC recently completed a pilot program that helped small and medium-size businesses improve environmental performance, and thereby improve competitiveness. Participating businesses reported overall savings of nearly USD 2 million. The CEC is currently applying lessons learned in this program to improving the production chains in the automotive and electronics sectors, two of the 10 most globally competitive productive sectors in North America.

NAFTA THE WAY AHEAD

Respecting Labour Rights The North American Agreement on Labor Cooperation (NAALC) adds a social dimension to the NAFTA. Through the supplemental labor agreement, the NAFTA partners seek to improve working conditions and living standards and to promote a broad set of labor principles, and commit themselves to promote compliance with and effectively enforce their labor laws. To accomplish these goals, the NAALC creates mechanisms for cooperative activities and intergovernmental consultations, as well as for independent evaluations and dispute settlement related to the enforcement of national labor laws.

NAFTA
NAFTA is a comprehensive trade agreement that improves virtually all aspects of doing business between Canada, Mexico, and the United States. Upon NAFTAs entry into force on January 1, 1994, Mexico immediately eliminated tariffs on nearly 50 percent of all industrial goods imported from the United States and removed many non-tariff barriers. Virtually all tariffs on industrial goods were eliminated by 2003 and tariffs on U.S. exports of certain agricultural products to Mexico were phased out on January 1, 2008. With the exception of tariff rate quotas on certain supply-managed agricultural products, all Canada-U.S. trade has been duty free since 1998. Canada and Mexico are the first and second largest export markets for U.S. goods.

NAFTA Before and After NAFTA: Overall Trade in Goods among the United States, Canada and Mexico has grown from $297 billion in 1993 to $930 billion in 2007, an increase of 213 percent. U.S. goods exports to Canada and Mexico grew from $142 billion in 1993 to $385.4 billion in 2007, an increase of 171 percent. U.S. goods imports from Canada and Mexico grew from $151 billion in 1993 to $523.9 billion in 2007, an increase of 247 percent.

NAFTA
Benefits of NAFTA: Investment: With limited exceptions, NAFTA requires U.S. investors to be treated in Mexico and Canada as well as those countries treat their own investors or investors of any other country in the establishment, acquisition, and operation of investments. NAFTA also guarantees investors the right to receive fair market value for property in the event of an expropriation. The protections of NAFTAs Investment Chapter are backed by a transparent, binding international arbitration mechanism, under which investors may, at their own initiative, bring claims against a NAFTA government for an alleged breach of the chapter.

NAFTA

The NAFTA Parties have agreed to make public their submissions in investor state disputes, and to make arbitral hearings open to the public. Tribunals are also authorized to accept amicus submissions from non-disputing parties.

NAFTA
Services: NAFTA establishes a solid framework for trade in services through the elimination of barriers in nearly all service sectors and enhancement of regulatory transparency. U.S. firms have been well positioned to take advantage of NAFTAs new market access opportunitiesservices exports have more than doubled under NAFTA and greatly exceed services imports. With service industries often highly regulated, regulatory transparency is essential. Under NAFTA, regulatory authorities have to use open and transparent administrative procedures, consult with interested parties, and publish all regulations.

NAFTA
Government Procurement: The government procurement provisions of NAFTA apply to the procurement of goods, services, and construction services. U.S. suppliers are granted nondiscriminatory rights to bid on contracts to supply most Canadian and Mexican central government entities. This increases opportunities for U.S. exports to Canada and Mexico in such sectors as construction, environmental and computer software and design services, oil and gas field equipment and services, heavy electrical equipment, communications and computer systems, electronic, pharmaceutical products, and medical equipment.

NAFTA IPR: NAFTA recognized early the importance of intellectual property protection and enforcement within the context of international trade agreements, having been signed nearly two years before the WTO Agreement on TradeRelated Aspects of Intellectual Property Rights (TRIPS). NAFTA provides for the protection and enforcement of a broad range of intellectual property rights, including patents, trademarks, copyrights and test data.