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Government: The North American Free Trade Agreement


Regulatory - Trade: Customs Duties | NAFTA - Intro | Features of NAFTA

Market Access from Canada

The 1994 North American Free Trade Agreement (NAFTA), together with its 1989 predecessor, the Canada-U.S. Free Trade Agreement, have eliminated most barriers to trade within Canada, the U.S. and Mexico, easing the cross-border flow of goods, services, capital and technology. NAFTA formed the world's largest free trade area and has resulted in economic growth and rising standards of living for all three partner countries.

NAFTA has opened up vast new business opportunities, not only for companies located within one of the three partner countries, but also for foreign firms interested in the huge North American market. As a result, international investors now can access the entire North American market from a Canadian location.

The North American Market

The North American market is one of the richest in the world. Companies based in Canada have preferred access to a market of 461 million people, with a combined GDP of over US $17 trillion.

There are especially important regional market clusters along the Canada-U.S. border that can be well served from a Canadian location. Winnipeg is just 17 hours by road from Chicago and 8 hours from Minneapolis. With increasingly efficient transportation routes, even the southern American states are considered to be close to major Canadian cities.

Key features of NAFTA include:

  • tariff elimination on trade between Canada the U.S. and Mexico;

  • provision of a standard of "national treatment" for foreign investors in other signatory countries;

  • ensured secure market access;

  • improved the dispute settlement mechanism;

  • increased access to government procurement opportunities, for companies located in member countries;

  • improved cross-border movement of business people and professionals among the signatory countries; and

  • stronger protection of intellectual property rights.

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