In January 1994, the United States, Mexico, and Canada implemented the North American Free Trade Agreement (NAFTA). The goal of NAFTA is to create better trading conditions through tariff reduction, removal of investment barriers, and improvement of intellectual property protection. NAFTA continues to gradually reduce tariffs on set dates and aims to eliminate all tariffs by the year 2004. Before NAFTA was established, investing in Mexico was a difficult process. Investors needed the Mexican Government's approval and were also required to meet specific investment guidelines. These requirements necessitated investors to export a set level of goods and services, utilize domestic goods and services, and transfer technology to competitors. Under NAFTA, investors no longer need government approval to invest and are treated as domestic investors. NAFTA has also increased intellectual property rights and allowed companies to obtain patents in Mexico and Canada. In the past, companies were hesitant to export research and development intensive goods; with increased intellectual property protection, however, exports of these goods has shown a definite increase. As a result of better trading conditions, exports and imp
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Agreements with the EFTA reduce tariffs between countries, enhance and allow for more stable foreign investment, and support the removal of trade barriers. By promoting the reduction of tariffs in the sectors of the economy important to the United States, industries will be able to expand and grow. NAFTA, MERCOSUR, GATT, and the EFTA, overall, have created founded many positive aspects in international trade. The success of free trade is unique to each individual trade organization. There have been tariff reductions ranging from 50 to 100% on important electronics software (US report on GATT 2). Argentina has gone from a recession in 1988 through an incredible recovery through to 1996. However, GATT is more inclusive of the international economy. mills invest hundreds of millions of dollars to build plants in Mexico as an effect of the reduced tariffs and shipping time. In 1986 Argentina and Brazil signed a Treaty for Integration, Cooperation, and Development which was originally set up to remove tariff barriers and tie together the macroeconomic policies of the two countries. The reverse happens when the tariff is reduced. Quantity supplied will increase, that is more goods will be produced for trade. The free trade established by MERCOSUR also involves countries within South America.
Approximate Word count =
3730
Approximate Pages =
15 (250 words per page double spaced)
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