Wednesday, February 20, 2019

International Partnerships: 3 Reasons NAFTA Boosts Our Economy

NAFTA was signed years ago, yet its impact is just now beginning to be fully realized. This one agreement essentially created the world's largest area of free trade, directly impacting more than 450 millions people. Linking the trade based economies of Canada, Mexico, and the United States has resulted in trillions of dollars in direct impact for each of the three countries. Here are three noticeable ways that NAFTS continues to boost our economy today.

Increased Trade Value

Since its signing in 1993, the value of trade between the three countries involved in NAFTA has increased more than four times over. This represents a real dollar value of $297 billion in 1993 to more than $1.17 trillion in 2018. 

This has resulted in economic growth and an increase in jobs across all sectors of society. When considering the United States alone, the values of exports to Canada and Mexico has increased from $142 billion in 1993 to more than $525 billion today.

Good Imports

The quality of the imports coming into America has increased as well. Mexican and Canadian manufacturers are putting out goods that Americans have grown to love and appreciate. 

Because all three countries are connected, this has effectively opened up international long routes for trucking allowing for international trucking companies like Glider Systems Inc to import goods to the US. That has opened up even more jobs, as the trucking industry continues to flourish. 

As NAFTA has evolved, the lessening of trade barriers means that international companies operating in member nations can freely move their goods across the borders. This benefits the consumer by giving them more choices, and it positively impacts the transportation sector as well.

Lowering of Prices

When tariffs are decreased, as they were under NAFTA, imports from the member nations will have lower prices as well. This means that consumers can buy more, which means more demand. The result is cyclical. A by-product of this has been a decreased risk of inflation. 

This has enabled the Federal Reserve Board to continue to keep interest rates low in the hope of further sparking the economy. Even food prices have become lower as a result of NAFTA given the fact that certain types of fresh vegetables, fruit, and beef can now move more freely across the three borders.

These three reasons alone highlight the boost that NAFTA has given to our economy. There are actually more advantages that can be cited as well. Since its signing in 1993, the impact of the trade agreement between the three major North American countries can definitely be felt in most sectors of the economy.

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