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samson98 eNotes educator| Certified Educator

Established in 1994, the purpose of the North American Free Trade Agreement (NAFTA) is to eliminate trade and investment barriers between its member countries, specifically the United States, Canada, and Mexico. By reducing and eventually eliminating tariffs, the signatories hoped the NAFTA would better the American, Canadian, and Mexican economies.

Evidence seems to indicate that all three member countries have experienced benefits from the NAFTA. In addition to having the ability to export more items to the other two countries, each nation has experienced an increase in direct foreign investment from citizens of its fellow NAFTA signatories.

However, the NAFTA has been criticized for several reasons. First, the NAFTA has resulted in a number of job losses in the United States as some U.S. companies have relocated factories to Mexico (however, the increase in free trade has enabled more small businesses to operate, recouping some net jobs). The NAFTA also hurt Mexican corn farmers. Because the U.S. government subsidizes corn production, U.S. farmers could export it to Mexico at prices far cheaper than the local Mexican farmers could afford to compete with.

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