The North American Free Trade Agreement (NAFTA) was an agreement signed between Canada, United States and Mexico in 1992 and took effect in 1994. The trade agreement’s main goal was to build the largest free trade region across the globe. Thanks to NAFTA, Canada and United States currently exchange nearly $1.5 billion in goods and services each day. The North American Free Trade Agreement has opened pathways to Canadians and also to the rest of North America. Since the signing of the North American Free Trade Agreement, Canada has been affected positively by the increase in the levels of trade, expansion of job and pay, and improved pricing and selection for Canadian consumers.
Imports and exports in trade have grown significantly since the signing of the North American Free Trade Agreement. Under the North American Free Trade Agreement, the trade of goods between the United States, Canada and Mexico has tripled, reaching approximately one trillion dollars CAD in 2008. Particularly in Canada, NAFTA has increased the imports of goods over the past five years in the following fields: machinery and equipment, communications equipment, and automotive equipment. This has caused Canada’s automotive industry to rise significantly, allowing the economy to increase positively. Exports of goods from Canada have likewise grown significantly. For example, in 1998, the increase in Canada’s exports to the NAFTA regions was approximately equivalent to the entire value of our exports to Japan and to the 15 nations of the European Union combined. These simple statistics can easily show how the North American Free Trade Agreement has impacted the imports and exports to Canada positively. Due to such economic growth, the North American Free Trade Agreement has helped create jobs and higher paychecks for Canadian workers.
Along with the better economy, the North American Free Trade Agreement increased jobs and brought better pay for Canadian workers. One in five jobs in Canada is linked to international trade , which makes NAFTA an important part of trade at a global scale. With the savings from tax and tariff elimination between the three NAFTA regions, Canada is able to spend money on hiring more workers. With more workers, Canada receives more income and with more income, Canada receives more profit which in turn leads to a better economy. It is a large cycle that has been happening since the signing of the North American Free Trade Agreement. Along with the signing of the North American Free Trade Agreement, a side agreement was signed. This side agreement is known as the North American Agreement on Labour Cooperation (NAALC) and the objectives of this agreement highlight the need of workers and working conditions in the NAFTA regions. The main objectives of the NAALC are to improve the living conditions and living standards of the workers and to encourage publication and exchanging information on the laws and institutions governing labour in each of the nations. NAFTA has also made it easier to receive temporary work opportunities for those who are in business association within the three nations. Under Chapter 16 of NAFTA, citizens of Canada, the United States and Mexico can gain quicker, easier temporary entry into the three countries to conduct business or investment activities. An excerpt of chapter sixteen of the North American Free Trade Agreement which explains the ease of work opportunities for the NAFTA regions reads as follows, “Each Party shall grant temporary entry to business persons who are otherwise qualified for entry under applicable measures relating to public health and safety and national security, in accordance with this Chapter, including the provisions of Annex 1603.” The North American Free Trade Agreement not only affects the rates of occupation in Canada, but also improved the selection and cost of goods for consumers.
At a consumer’s perspective, NAFTA has created cheaper pricing and better selection and quality of goods for all of North America. The main reason for cheaper and better quality goods is the ability of duty free trade of goods tagged as household effects (household effect goods include items such as furniture, carpets, paintings, tableware, etc.) within the NAFTA regions. Savings from such duty free imports add up resulting in Canada having excessive money to spend on importing more goods of variety, allowing consumers to have a better selection of foods and products at a cheaper cost. NAFTA also brought the introduction of multilingual labelling on products, labelling products with multiple languages. This was not only appealing to customers, but also to global trade. Since Canada has two national languages (French and English) and labels according, Canada can not only trade with the United States, but also with other countries that speak those languages, like United Kingdom, France or other parts of Europe, for example.
The North American Free Trade Agreement’s goals have been met and are increasing their expectations overall. It was a great success and was the reason of economic growth not only for Canada, but also for United States and Mexico. The agreement has also brought many jobs and higher pay for workers between the three regions. NAFTA has also brought a better selection of goods and cheaper prices for consumers. Due to the North American Free Trade Agreement, the advantages for Canada have been significantly growing and continue to do so.
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