NAFTA Myths vs Facts

Ever since the North American Free Trade Agreement was signed over 20 years ago, a lot of speculation on whether the treaty brought more benefits than downsides to the three countries involved arouse.

Many politicians, investors, finance executives and business owners have given their opinion on how this agreement has improved or affected their ventures, but truth is that only by the use of numbers we can reveal the extent to which its critics have been proven wrong:

 

Myth

  • The US has experienced job losses since NAFTA came into effect
  • NAFTA has not resulted in any benefits for the US agriculture
  • NAFTA has made the US lose its sovereignty and independence
  • NAFTA negatively impacts the North American manufacturing base
  • The treaty has given rise to Environmental Damage

 

Fact

  • Commercial trade with Mexico and Canada has originated over 14 million US jobs and around 35% of these jobs come as a result of the constant increase in NAFTA commerce.
  • Canada and Mexico accounted for 37% of the total growth of US agricultural exports during the first 15 years since the treaty was signed.
  • NAFTA has allowed American farmers to increase their commerce. In average, one in every ten acres is destined for Canada and Mexico exports.
  • NAFTA as any other international treaty, is an agreement signed voluntarily between countries, in which each of their own governments ratified, meaning that Canada. Mexico and the US are forced to comply with the agreement by International Law and are not ruled by the laws of the rest of the countries.
  • NAFTA has opened doors for new sources of materials, technologies, capital and more competitive talent acress North America.

 

NAFTA members created the North American Agreement on Environmental Cooperation (NAAEC) and some of its initiatives include:

  • Handling practices for toxic chemicals;
  • Creation of the first Mexican National Air Emissions Inventory;
  • The North American Bird Conversation Initiative
  • Promotion of best practices to perform commercial trade without affecting the environment.

Border crossing to Mexico Steps Made Simple

Trade across borders between the US, Canada, and Mexico has been done even before the North America Free Trade Agreement existed. Nowadays, NAFTA enables the border crossing process be faster and simpler.

 

The border crossing process breaks down into the following 7 steps:

  1. The US carrier picks up the load at the US shipper’s facilities.
  2. The US carrier arrives at the border and drops off the at the US Customs Agent’s yard.
  3. The US agent inspects and validates the load description and details and dispatches it for clearance.
  4. The Mexican agent does the import clearance and coordinates the border crossing.
    ** Make sure the payment of taxes, fees, and duties were made in advance to the customs broker in order to perform clearance and border crossing
  5. The Mexican customs may inspect the load and then release it. Selection of loads for inspection is done randomly based on a stop light system.
  6. The Mexican carrier receives the load from transfer and dispatches the truck to final destination.
    **Not applicable in direct shipments.
  7. The Mexican carrier delivers at final destination in Mexico.