Essay About Foreign Trade And Free Trade

Nafta
Essay title: Nafta
Is NAFTA good or bad for
Canada?
Shehraam Nawaz Janjua
Economics Assignment
Mr. spinelli
18 6 6
What would this island be without foreign trade but a place of confinement to the
inhabitants, who (without it) could be but a kind of Hermits, as being separated from the
rest of the world; it is foreign trade that renders us rich, honorable and great, that gives
us a name and esteem in the world.
Charles Molloy
De Jure Maritimo et Navale, 1676
Even before Charles wrote this in 17th century there was a sense of foreign trade and
its benefits amongst the people. Trade is the reason for the rise of many civilizations such
as the Muslims because the backbone of there economy was the international trade. A
new theory was suggested by a Scottish philosopher Adam Smith in the 18th century that
the economy would grow much quickly if there was no trade barriers, thus this concept
came to be known as ‘Free Trade’.
In today’s world free trade is flourishing and many economies of the world have made
treaties with each other and declared them selves as one market, these are also called
trading blocs. The major one of these treaties is the NAFTA (North American free trade
agreement), it has three members Canada, Mexico and USA.
Background of NAFTA
Mexican’s wanted to make a free trade agreement with USA as Canada did with
CFTA (Can-US free trade agreement), this brought fourth the issue to Canada that either
they would continue the bilateral trade with USA or open there markets further and
include Mexico and turn this agreement into trilateral. So in 1992 the agreement was
made and after a year it was put into affect. NAFTA became the world largest trading
bloc, ‘area of 21,588,638 and a population of 430 million people who produces $12
trillions worth of goods and services yearly’ (1).
When NAFTA was put into affect, it promised many major impacts on each of they
country’s economy but as the time progressed there had been many questions raised by
the individuals of the three countries, like trade deficits, labor issue, lower wage rate and
the environmental issues. So through this essay paper we’ll see that how is one country
like Canada is effected by NAFTA, to determine that if it is good or bad we have to see
its advantages and disadvantages to Canada.
Advantages to Canada
Canadas goals in the negotiation of NAFTA were very simple. They wanted to improve
their access for their goods and services to Mexico and the United