The NAFTA was framed on January, 1994. The three countries, namely, Mexico, Canada and the United States of America entered into the NAFTA or the North American Free Trade Agreement to form the biggest free trade zone in the world. NAFTA or North American Free Trade Agreement, has propelled growth in the economy of the three member nations since the year 1994. NAFTA has also led to the increase in the standards of living of the people of its member nations.
Implementing NAFTA has ensured removal of several obstacles with regard to investment and trade in the Canada, Mexico and United States of America.
Effects of implementing the NAFTA:
Agriculture sector:
# Non tariff obstacles pertaining to trade in agriculture between Mexico and United States of America were dissolved. In addition to this, there were other tariffs, which faced removal soon after its implementation.
# It has also been anticipated that majority of the agricultural provisions are likely to be brought into force by the year 2008.
# Agricultural provisions of United States-Canada Free Trade Agreement, which was in force since the year 1989, was included in NAFTA.
Effect of NAFTA on investment:
Implementation of NAFTA, influenced investments in a positive manner. The data given below shows the investment trend with regard to Canada. The other two member partners also registered a healthy growth in investment.
Since the year 1994, stock of FDI or foreign direct investment in Canada has been approximately, USD279 billion(yearly). In the year 2005, the overall foreign direct investment in Canada was USD415 billion. Foreign direct investment by United States of America in Canada escalated to approximately, USD266 billion in the year 2005. Conversely, direct investment by Canada in other NAFTA member nations also showed an increase and attained the USD$213.7 billion mark in USA and USD3.14 billion in its other member nation- Mexico.
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