Since its origin, NAFTA has been a major reason for financial development and job creation in the United States, Canada, and Mexico. It has offered uninterrupted options for the unprecedented business collaborations between the partners who are in this agreement. All this has caused to the creation of a platform that allows companies from the United States, Mexico, and Canada to produce products together, than just purchase and sell to each other.
NAFTA came to its origin in 1994, offering facilities to create the largest free-trade region the world had ever seen before. It stirred financial growth and helped raise the living standards for the residents of all the members.
After the NAFTA regulations were re-assessed and strengthened, it proved to boost prosperity in the three nations and set a good example to help nations enjoy benefits via trade liberations. The four major industries which benefitted since NAFTA’s inception are:
1. Automotive industry
When discussing NAFTA, the automotive sector is the one they highlight has actually benefitted from this trade agreement. Since its origin, the automotive industry Mexico has risen to become the seventh biggest producer of cars worldwide and the numbers continue to increase. One of the first US firms to benefit from the uncollected potential of assembling vehicles in Mexico was General Motors. Since then automotive companies have transferred their operations in Mexico especially in Guanajuato and Toluca.
2. Retail
The retail industry developed enormously after the inception of NAFTA. One major example of this is Walmart. Walmart set its base in Mexico three years before the member countries signed the deal, and this retail giant is one of the biggest companies in its segment. The sales have soared exponentially throughout the decade.
When NAFTA ended the import taxes, a lot of foreign products such as Heinz and Procter and Gamble came to Mexico.
3. Food
The food industry has grown a lot because of NAFTA. All the member nations are seen exporting raw material and exporting end items. A major example is Bimbo- the Mexican pastry company which is the biggest baker business across the globe. Till 1999, it wasn’t known in Canada but after setting up profitable ventures in the United States, it opened its operations in Canada also. There are many other examples along with it.
4. Technology
UTC is the best example of how NAFTA benefitted the technology sector. It is known for producing defense, aerospace and home appliances. Hence, the developing manufacturing sector in Mexico has overall benefitted after signing NAFTA. The company made some great investments in the nation, adding to its GDP.
All in all, train your employees proved to be a revolutionary deal that help countries like America, Canada and Mexico become great trading partners. Its effect is visible in all the countries and their growth. With more bargains set to take place and make things go more in favor, it can be expected that there will be better growth and development in all three nations. So, if you are thinking of relocating your manufacturing there, then this is the time to do it!
