Quick Definition

NAFTA is a treaty made between the United States, Canada, and Mexico to eliminate most tariffs on products traded among them, thereby increasing trade and investment.

Examples

• 1A Canadian company exporting agricultural products to Mexico without facing high tariffs.
• 2A U.S. automotive manufacturer setting up a plant in Mexico to take advantage of lower labor costs and tariff-free access to the Canadian market.
• 3Mexican textile companies exporting clothes to the U.S. and Canada without significant import taxes.

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