The North American Free Trade Agreement (NAFTA) is a treaty of the United States, Canada and Mexico. it came into force on 1 January 1994. (Since 1989, there has been free trade between the United States and Canada; NAFTA has extended this regime.) On that day, the three countries became the largest free market in the world – the combined economies of the three nations were $6 trillion and directly affected more than 365 million people. NAFTA was created to remove customs barriers for agriculture, manufacturing and services; Eliminating restrictions on investment protection of intellectual property rights. This should be done while respecting environmental and labour concerns (although many observers point to the fact that the three governments have been negligent in environmental and safety at work since the agreement came into force). Small businesses were among those expected to benefit the most from the removal of trade barriers, as this would reduce trade activity in Mexico and Canada and reduce the administrative burden associated with importing or exporting goods. The highly organized opposition to NAFTA has focused on the fear that the removal of trade barriers will encourage U.S. companies to get carried away and settle in Mexico to use cheap labour. This concern increased in the early years of the 2000s, when the economy experienced a recession and the subsequent recovery turned out to be a „recovery in unemployment“. Opposition to NAFTA was also strong among environmental groups, who said that the anti-pollution elements in the treaty were woefully inadequate. This criticism has not wavered since the implementation of NAFTA. In fact, Mexico and Canada have been cited on several occasions for environmental infidelities.
Other NAFTA provisions are expected to provide U.S. and Canadian companies with better access to Mexican markets in the banking, insurance, advertising, telecommunications and trucking sectors. U.S. Department of Commerce. Bureau of Census, foreign trade statistics. „New data updates 2005.“ Available at www.census.gov/foreign-trade/statistics/. Appeal on April 17, 2006. 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 U.S. markets. A government does not need to take concrete steps to promote free trade. This upside-down attitude is called „laissez-faire trade“ or trade liberalization. Supporters have capped NAFTA because it has 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. L