Why Was the North American Free Trade Agreement (Nafta) Established

The North American Free Trade Agreement (NAFTA) was established in 1994, after years of negotiations between the United States, Canada, and Mexico. The primary goal of NAFTA was to promote economic growth and increased trade between the three countries by eliminating barriers to trade and investment.

NAFTA was created as a response to the changing global economic landscape of the 1990s. At the time, Europe was expanding its economic integration through the creation of the European Union, and many countries in Asia were experiencing rapid economic growth. In order for North America to remain competitive in the global economy, the three countries recognized the need to work together to increase trade and investment.

The agreement aimed to eliminate tariffs on goods traded between the three countries, which would make it easier and cheaper for companies to do business across borders. It also included provisions to protect intellectual property rights, encourage investment, and establish mechanisms for resolving disputes.

Despite some initial criticism, NAFTA has been credited with promoting economic growth and increasing trade between the three countries. According to the Office of the United States Trade Representative, U.S. trade with Canada and Mexico has more than tripled since the agreement was signed, reaching $1.4 trillion in 2018.

However, the agreement has been controversial at times, with some critics arguing that it has led to job losses and wage stagnation in certain industries. In recent years, there has been renewed discussion about whether to renegotiate or replace NAFTA, with the United States, Canada, and Mexico agreeing to a new trade deal called the United States-Mexico-Canada Agreement (USMCA) in 2018.

Despite the controversy and ongoing debates, it is clear that NAFTA was established with the goal of promoting economic growth and increased trade between the United States, Canada, and Mexico. Whether or not the agreement has been successful in achieving that goal may be up for debate, but its impact on the North American economy is undeniable.


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