The North American Free Trade Agreement (Nafta) Increased Restrictions On

Nafta has been structured to increase cross-border trade in North America and stimulate economic growth for each party. A 2007 study showed that nafta had “a significant impact on the volume of international trade, but a modest impact on prices and prosperity.” [62] Supporters supported NAFTA because it opened up Mexican markets to U.S. companies like never before. The Mexican market is growing rapidly, which promises more export opportunities, which means more jobs. However, proponents have struggled to convince the American public that NAFTA would do more good than harm. Their main efforts have been to convince citizens that all consumers have as wide a choice of products at as low a price as possible, which means that consumers would be the main beneficiaries of lowered trade barriers. The U.S. Chamber of Commerce, which represents the interests of small businesses, was one of THE most active supporters of NAFTA and organized small and medium-sized business owners and employees to support the agreement. This support was essential to counter the efforts of organized work to put an end to the agreement.

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. Some small businesses have been directly affected by NAFTA. In the past, large firms have always had an advantage over small businesses, as large firms could afford to build and maintain offices and/or production sites in Mexico, which avoided many of the old trade restrictions on exports. In addition, pre-NAFTA legislation provided that U.S. service providers who wanted to do business in Mexico had to establish a physical presence there, which was simply too expensive for small businesses. Small businesses were stuck, they could not afford to build, and they could not afford export tariffs either. NAFTA eliminated the competitive conditions by giving small businesses the opportunity to export to Mexico at the same costs as larger firms and removing the requirement that a company establish a physical presence in Mexico to do business there. The lifting of these restrictions meant that large new markets were suddenly open to small businesses that had previously done business only in the United States. This was considered particularly important for small businesses that produced goods or services that had matured in the United States.