Trade Aggreement

North American Free Trade Area (NAFTA)

Establishment: January 1, 1994

Member Countries: 3 (Canada, Mexico, United States)

The North American Free Trade Area is the trade bloc created by the North American free Trade Agreement (NAFTA) and its two supplements, the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC) whose members are Canada, Mexico and the United States. It came into effect on 1 January 1994. It is the world’s largest free trade area.

NAFTA has two supplements:

• The North American Agreement on Environmental Cooperation (NAAEC) and
• The North American Agreement on Labor Cooperation (NAALC).

Commission for Labor Cooperation

• Created to promote cooperation on labor matters among NAFTA members and the effective enforcement of domestic labor law.

• Consists of a Council of Ministers (comprising the labor ministers from each country) and a Secretariat, which provides administrative, technical, and operational support to the Council and implements an annual work program. Departments responsible for labor in each of the three countries serve as domestic implementation points. 

 Commission for Environmental Cooperation

• Established to further cooperation among NAFTA partners in implementing the environmental side accord to NAFTA and to address environmental issues of continental concern, with particular attention to the environmental challenges and opportunities presented by continent-wide free trade.

• Consists of a Council (comprising the environment ministers from each country), a Joint Public Advisory Committee (a 15-member, independent volunteer body that provides advice and public input to Council on any matter within the scope of the environmental accord), and a Secretariat (which provides administrative, technical, and operational support).

Exercises

1. What does NAFTA stand for?   Or NAFTA stands for   DBBL (MTO): 2009

A.    North African Free Trade Act

B.      North American Transportation Association

C.     New Arkansas Free Transam Act

D.    North American Free Trade Agreement

Answer: D

Note: NAFTA stands for North American Free Trade Agreement. NAFTA was very much misunderstood for quite a while, after it was implemented. This was the first "North American accord", Reagan said.

2. Who signed NAFTA when it was first implemented (subject to approval by the legislatures of the countries concerned)?

A.    Mulroney, Gortari, George H. W. Bush

B.      Mulroney, Kennedy, Gortari

C.     Mulroney, Gortari, Nixon

D.    Carter, Gortari, Mulroney

Answer: A

Note: Mexico, United States, and Canada benefited greatly from this North American free trade agreement. Prime Minister Brian Mulroney signed the agreement for Canada, President George H. W. Bush for the United States, and President Carlos Salinas de Gortari signed for Mexico.

3. Which American president actually signed the NAFTA following approval by Congress?

A.    Jimmy Carter

B.      George W. Bush

C.     Bill Clinton

D.    George H. Bush

Answer: C

Note: At the very beginning, George H. Bush did the negotiating for the NAFTA, but Bill Clinton was the president who actually signed the agreement itself.

4. What presidential candidate opposed NAFTA?

A.    Al Gore

B.      Bill Clinton

C.     Richard Nixon

D.    Ross Perot

Answer: D

Note: Ross Perot, at the time, was running for president. He was so opposed that he wrote a book called "Save Our Jobs, Save Our Country". Ross wasn't the only one against NAFTA though. Many labor unions were against NAFTA.

5. When did United States, Mexico, and Canada sign the NAFTA?

A.    December 17, 1992

B.      July, 30 1992

C.     January 20, 1993

D.    November 25, 1992

Answer: A       

Note: Canada, Mexico, and the United States signed the North American Free Trade Agreement December 17, 1992. On December 17, Prime Minister Brian Mulroney of Canada, President Carlos Salinas de Gortari of Mexico, and the President of the United States George H. Bush signed the North American Free Trade Agreement.

6. The regional trade agreement between the USA, Canada and Mexico is known as-

A.    Mercosur

B.      NAFTA

C.     ASEAN

D.    the EU

Answer: B

7. The North American Free Trade Agreement came into effect on 1 January-

A.    2004

B.      1994

C.     1984

D.    1974

Answer: B

Mercosur

Headquarter: Montevideo, Uruguay.

Official languages: Portuguese, Spanish, Guarani

Membership: 4 members (Venezuela is a full member but has been suspended since December 1, 2016).

Mercosur or Mercosul is a Regional Trade Agreement (RTA) between Brazil, Argentina, Uruguay, Venezuela and Paraguay, founded in 1991 by the Treaty of Asuncion, which was later amended and updated by the 1994 Treaty of Ouro Preto. It is known as the Common Market of the South. Its purpose is to promote free trade and the fluid movement of goods, peoples, and currency. Venezuela is a full member but has been suspended since December 1, 2016. Associate countries are Bolivia, Chile, Colombia, Ecuador, Guyana, Peru and Suriname. Observer countries are New Zealand and Mexico.