NAFTA

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NAFTA

NAFTA (pronounced /ˈnæftə/), or the North American Free Trade Agreement, is a trilateral trade agreement between Canada, Mexico, and the United States that was implemented in 1994.

Etymology

The term "NAFTA" is an acronym derived from the initial letters of the North American Free Trade Agreement. The agreement was named as such because it encompasses the three major countries in North America.

Definition

NAFTA is a trade agreement that was designed to reduce or eliminate trade barriers between the United States, Canada, and Mexico. This includes the reduction or elimination of tariffs, quotas, and other trade restrictions on goods and services traded between these countries.

Related Terms

  • Trade Agreement: A trade agreement is a wide-ranging tax, tariff and trade treaty that often includes investment guarantees. It exists when two or more countries agree on terms that helps them trade with each other.
  • Tariff: A tariff is a tax imposed by a government of a country or of a supranational union on imports or exports of goods.
  • Quota: In international trade, a quota is a government-imposed trade restriction that limits the number, or in certain cases the value, of goods and services that can be imported or exported during a particular period.
  • Free Trade: Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade.

External links

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