North American Free Trade Agreement (NAFTA)

Gordon H. Hanson
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
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Abstract

The North American Free Trade Agreement (NAFTA) eliminated trade barriers on most products between Canada, Mexico, and the United States. NAFTA included provisions to remove restrictions on cross-border investment, expand service trade, and address environmental and labour standards. Post-NAFTA increases in trade between member countries were matched by comparable decreases in their trade with the rest of the world. Freer trade has brought a shift in economic activity within Mexico and the United States towards their shared border and an increase in direct investment from the United States to Mexico. In Mexico these developments have contributed to greater wage inequality.
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How to cite this article

Hanson, Gordon H. "North American Free Trade Agreement (NAFTA)." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 30 March 2017 <http://www.dictionaryofeconomics.com/article?id=pde2008_N000145> doi:10.1057/9780230226203.1203

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