Everything about NAFTA


NAFTA: North American Free Trade Area

North American Free Trade Agreement, English North American Free Trade Area [n ɔ ː.theta ə mer ɪ kən fri ː tre ɪ d eər ɪ ə], through the North American Free Trade Agreement (North American Free Trade Agreement, acronym NAFTA on Abbreviationfinder.org) between the US, Canada and Mexico created free trade area.

Signed December 17, 1992, in force since January 1, 1994; replaces the Free Trade Agreement of 1989 between the USA and Canada (Canada-US Free Trade Agreement, abbreviation CUSFTA).

The free trade zone for commercial goods and services as well as the movement of capital is to be implemented within 10 to 15 years through a gradual reduction in customs tariffs and quotas. Due to the strong economic gap between Mexico and the two North American countries, the tariff dismantling was asymmetrical. While 84% of Mexican exports to the US were duty-free when the treaty went into effect, only 43% of US exports to Mexico became duty-free with immediate effect. For trade between Mexico and Canada, the corresponding figures were 79% and 41%.

In 2008, as planned, the last remaining trade restrictions between the member states were abolished. The agreement also provides for a liberalization of the service markets, the facilitation of investments and joint ventures, uniform regulations for the protection of intellectual property and a mutual right to have a say in the formulation of standards and technical regulations.

Further political cooperation between the member states based on the example of the EU is not planned. NAFTA organs are three main commissions (for business, labor and the environment) as well as the equal arbitration tribunal for the settlement of trade disputes.


Union of South American Nations

Union of South American Nations, Spanish Unión de Naciones Suramericanas, Portuguese União das Nações Sul-Americanas, abbreviation UNASUR, Community founded on May 23, 2008 in Brasilia with the aim of creating a union based on the European model. The member countries of Mercosur – Argentina, Bolivia, Paraguay, Uruguay – and the Andean Community – Bolivia, Ecuador, Colombia, Venezuela, Peru – as well as Chile, Guyana and Suriname are involved. With around 384 million residents and a gross domestic product of more than 2.6 trillion. The new confederation ranks third behind the EU and NAFTA. The aim is, inter alia, a single currency, a common passport, a supreme court, a parliament as well as uniform external tariffs, a common market and a uniform appearance on international issues. The secretariat is in Quito.

At the third South American summit in December 2004, the twelve states formed a loose association called the South American Community of Nations (Comunidad Sudamericana de Naciones, CNS). In April 2007 it was decided to rename it the Union of South American Nations and to work out a founding treaty.


Mercosur, short for Mercado Común del Sur, German Common Market of the South, regional economic community in Latin America.

Founded on March 26th, 1991 by the Treaty of Asunción (Paraguay). Founding members include Argentina, Brazil, Paraguay and Uruguay. Venezuela became a full member in the summer of 2012. Associate members are Chile (since 1996), Bolivia (since 1997), Peru (since 2003), Ecuador and Colombia (since 2004) as well as Guyana and Suriname (since 2015). In August 2017, Venezuela was suspended indefinitely.

The aim is to gradually create a common market. There are i.a. the following obligations for the member states: Enforcement of the free movement of goods and services through gradual dismantling of tariffs, among other things. Trade barriers between the member states, creation of a common external tariff system and a common foreign trade policy, coordination of economic policy and approximation of legal provisions with regard to intra-Community trade. The highest body is the Council of the Common Market, consisting of the Foreign and Economic Ministers; it meets annually as a summit conference with the state presidents. The Common Market group serves as the executive; the trade commission is responsible for technical issues relating to free trade. The seat of the secretariat is in Montevideo; the seat of arbitration is in Asunción.

The member states of Mercosur officially form a customs union since 1.1.1995. Mercosur is the second largest economic association on the American continent after NAFTA). The main problems facing Mercosur are the different stages of development of the economies involved, certain rivalries between Argentina and Brazil and the coordination of macroeconomic policies.

The association agreements with Bolivia, Peru, Ecuador and Colombia have strengthened relations with the Andean Community. Negotiations are under way to bring Mexico closer together. By intensifying trade relations with other countries in South and Central America, the Mercosur states want to create a counterweight to NAFTA.

On December 15, 1995, the heads of state and government of the EU and Mercosur countries signed an international framework agreement on political, cultural, economic and trade policy cooperation aimed at the gradual establishment of a free trade area (originally planned for 2006, not implemented) and the liberalization of the Agricultural trade as well as capital movements should lead. There are also plans to cooperate in the areas of environmental protection, transport, science and research. In June 2019, the EU Commission and the representatives of the Mercosur countries agreed on a treaty that must be ratified by the European Parliament and all EU countries.

The Mercosur states are also members of the South American community of states.