NAFTA (North American Free Trade Agreement)
Definition
NAFTA is an agreement signed by Canada, Mexico, and the United States in 1994 creating a trilateral trade bloc in North America.
Analogy
Imagine three friends who decide they will freely share their toys with each other without any restrictions or conditions. That's what Canada, Mexico, and the United States did with their goods through NAFTA - they agreed not to impose taxes or tariffs on most goods traded among them.
Related terms
Tariff: A tax imposed on imported goods and services.
Free Trade Zone: An area within which goods may be landed, handled, manufactured or reconfigured, and re-exported without the intervention of customs authorities.
Protectionism: The theory or practice of shielding a country's domestic industries from foreign competition by taxing imports.
"NAFTA (North American Free Trade Agreement)" appears in:
Study guides (1)
Are you a college student?
Study guides for the entire semester
200k practice questions
Glossary of 50k key terms - memorize important vocab
Resources
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.