NAFTA and USMCA

These flashcards summarize key terms and concepts related to NAFTA and the transition to USMCA, focusing on their impact, objectives, and associated challenges.

NAFTA

North American Free Trade Agreement, an agreement between Canada, Mexico, and the United States that came into effect on January 1, 1994.

Goals of NAFTA

To promote trade and economic activity between member countries, and to create a free trade zone.

Market Expansion under NAFTA

Global corporations aimed to enter new markets for growth.

Cost Efficiency in NAFTA

Objective to reduce production and operational costs for global corporations.

Resource Acquisition under NAFTA

Gaining access to materials and expertise for business operations.

Profit Maximization

Increase profitability as an objective for global corporations under NAFTA.

Investment Opportunities due to NAFTA

Boost in foreign direct investment (FDI) resulting from reduced trade barriers.

Supply Chain Integration

Facilitated easier cross-border production and logistics under NAFTA.

Automotive Industry Case Study

Companies like Ford and GM integrated production across North America, achieving cost savings.

Agricultural Sector Case Study

Increased trade in agricultural products, benefiting farmers and consumers.

Challenges of NAFTA

Included increased competition, regulatory compliance issues, labor issues, and environmental concerns.

Income Inequality from NAFTA

Benefits of NAFTA were not evenly distributed among populations.

Transition to USMCA

The United States-Mexico-Canada Agreement replaced NAFTA with updated trade rules.

Key Changes in USMCA

Included stricter rules of origin, stronger labor/environmental standards, and enhanced intellectual property protections.

Opportunities under USMCA

Offered modernized trade rules and stronger protection for innovation and intellectual property.

Challenges under USMCA

Included higher compliance costs and the need to meet new labor and environmental requirements.