12 The North American Free Trade Agreement NAFTA was establi

12. The North American Free Trade Agreement (NAFTA) was established in 1994 under the Clinton administration. a) What was the purpose of NAFTA? b) At the time, political opponents characterized \"the big sucking sound\" as jobs would be lost as a result. Is there any evidence that this was, in fact, the case?

Solution

a) The main purpose of NAFTA is nothing but to remove the barriers to the exchange of goods and services among the three countries namely Canada, USA and Mexico.

b) At the timeof NAFTA politicians like Ross Perot viewed it as a \"big sucking sound\' where the general idea was to express his views that there would be a loss of jobs due to NAFTA. However in the initial stages, there were no evidences to support this argument and however, in the later stages, there are certain issues in the US regarding the unemployment scenario but economists mentioned that it was not a result of NAFTA however.