Answer to Question 1
The North American Free Trade Agreement (NAFTA), implemented in 1994, effectively merged Canada, Mexico, and the United States into one market of nearly 454 million consumers. NAFTA virtually eliminated all tariffs on goods produced and traded among Canada, Mexico, and the United States to create a free trade area. The estimated annual output for this trade alliance is more than 17 trillion. NAFTA makes it easier for U.S. businesses to invest in Mexico and Canada; provides protection for intellectual property (of special interest to high-technology and entertainment industries); expands trade by requiring equal treatment of U.S. firms in both countries; and simplifies country-of-origin rules, hindering China and Japan's use of Mexico as a staging ground for further penetration into U.S. markets. Canada's more than 35 million consumers are relatively affluent, with a per capita GDP of 45,000. Canada is the single largest trading partner of the United States, which in turn supports millions of U.S. jobs. NAFTA has also enabled additional trade between Canada and Mexico. Mexico is Canada's fifth largest export market and third largest import market. With a per capita GDP of 18,000, Mexico's more than 121 million consumers are less affluent than Canadian consumers.
Answer to Question 2
False
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