Economists are not concerned about these cyclical trade deficits or surpluses. Moreover, they are not worried when there is a deficit, because the country borrows heavily abroad to finance investments that will then be repaid. During the 19th century, the United States remained in this position, when it invested heavily to build railways across the continent, steel mills and other long-term investments. That is not the situation in the United States today. Today, it borrows many other countries to finance short-term consumption, such as the newest and largest HDTVs in Japan or South Korea, and these purchases do not generate income to pay off their debts in the future. The main provisions of NAFTA required a gradual reduction in tariffs, tariffs and other trade barriers between the three Member States, with some tariffs to be abolished immediately and others over a 15-year period. The agreement guaranteed duty-free access for a wide range of industrial products and goods traded between the signatories. “Domestic goods” have been granted to products imported from other NAFTA countries and prohibit all governments, local or provincial, from imposing taxes or tariffs on these products. NAFTA has not eliminated regulatory requirements for companies wishing to act internationally, such as rules of origin and documentation obligations, that determine whether certain products can be traded under NAFTA.
The free trade agreement also provides for administrative, civil and criminal sanctions for companies that violate the laws or customs procedures of the three countries. The North American Free Trade Agreement (NAFTA), signed by Prime Minister Brian Mulroney, Mexican President Carlos Salinas and U.S. President George H.W. Bush, came into force on January 1, 1994. NAFTA has created economic growth and a rising standard of living for the people of the three member countries. By strengthening trade and investment rules and procedures across the continent, Nafta has proven to be a solid foundation for building Canada`s prosperity. NAFTA replaced Canada-U.S. Free Trade Agreement (CUFTA). Negotiations on CUFTA began in 1986 and the agreement entered into force on 1 January 1989. The two nations agreed on a landmark agreement that put Canada and the United States at the forefront of trade liberalization. For more information, visit the Canada-U.S. Free Trade Agreement information page.
The North American Free Trade Agreement (NAFTA) was inspired by the success of the European Economic Community (1957-1993) in removing tariffs to stimulate trade among its members. Supporters argued that the creation of a free trade area in North America would bring prosperity through increased trade and production, resulting in the creation of millions of well-paying jobs in all participating countries.