Class notes
North American Free Trade
- Course
- BBB4M
- Institution
- 12th Grade
Written with Virtual high school (VHS)
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What is NAFTA? The North American free trade agreement also known as NAFTA is anagreement that was placed from 1994 to 2020. The agreement was later replaced by the Canada
United States Mexico agreement also known as CUSMA. The reason for this agreement is to
promote trade between the US, Mexico and Canada. This agreement slowly lessens or removes
all tariffs between all 3 countries, this is great becuase all countries can trade for free without
expenses (Kenton, 2021).
What is CUSMA? The Canada United States Mexico agreement also known as CUSMA was the
biggest free trade agreement in the world. This agreement created economic growth which
helped to make the standard of living in all 3 countries better (Government of Canada).
How did NAFTA benefit the US and Canada? The 2 countries would remove all tariffs on items
and services and have free access to each other's markets without a problem. Canada cannot limit
sales of energy resources to the US with the exception of shortages, Canada must also provide a
portion of what is available to America (Virtual highschool).
What were the arguments for unlimited trade with the US? Some of the arguments were that
trade is important for Canada’s economy to grow. The US trades a lot with Canada and Canada
should take advantage of this opportunity. Free trade would increase productivity because
Canada has access to the US market with no limits (Virtual highschool).
What were the arguments against unlimited trade with the US? Some arguments against
unlimited trade makes only large businesses better, Canadian culture and sovereignty is
threatened, if companies moved to the US from Canada jobs would be lost (Virtual highschool).
Which concern do I stand with? The concern I stand with that has to do in favor of free trade
with the US. My argument is “Trade is vital to the growth of the Canadian economy.”
How did this concern affect Canada and its trade? Canada experienced a better trade effect with
the US than Mexico as a result of NAFTA, while Mexico did not benefit much Canada enjoyed a
mild trade surplus with the US. Recently “Canada sold more to the US than it buys at a $26.8
deficit in 2019, a services trade surplus of $29.32 billion balances everything out, (Investopedia,
2022)”. Canada also enjoyed a 404% genuine increase in foreign direct investment from the US
in between 1993 and 2013.
How did NAFTA affect the US and its economy? Unemployment rates: When NAFTA was
created in 1994, Ross Pront said that when people move to the southern border because of job
opportunities the economy will suffer due to unemployment rates, he was right. The
unemployment rate by the end of 1993 was 6.5%, when NAFTA was created in 1994 the
unemployment rate dropped slowly from 1994 to 2001. The US was able to keep the
unemployment rate above 6.5% until March 2014, in December 2017 the unemployment rate
was 4.1% which is lower than that of 1993. Manufacturing jobs: The development of NAFTA
caused a fall in people getting hired for manufacturing. The lowest was 16.8 million jobs in 1940
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