NAFTA

A trade agreement that conveys the positive outcomes of international trade is the General Agreement on Trade and Tariffs (GATT). It was created in 1947 and like NAFTA promotes international trade through the reduction of tariffs. Today, GATT encompasses over one hundred countries and 90% of the world's trade goods (Sabir 1). There have been eight different versions of GATT, each resulting in a new trade agreement. The most recent is referred to as the Uruguay Round and is one of the largest and most comprehensive trade pacts in history (Deng 1). The Uruguay Round Agreement cuts tariffs by one-third, increases coverage for textiles, clothing and agriculture and creates a new World Trade Organization (Congressional Digest 258). The WTO settles dispute settlements, regulates the policies agreed upon and reviews countries' trade practices and policies. In addition, the Uruguay round proposes reductions in nontariff protective barriers to trade (Gottheil 350). The Uruguay Round and WTO make up an important part of GATT. GATT as a whole is based on principles that ensure all participating countries receive benefits. These principles include nondiscrimination, protection of domestic industries and provision of stable basis for trade (Congressional Digest 258). With such a solid foundation, the policies of GATT have taken force. Much like NAFTA, GATT proposes to increase trade through the reduction of tariffs. However, GATT is more inclusive of the international economy. As NAFTA, MERCOSUR, and GATT establish free trade throughout the Americas and other parts of the world, the European Free Trade Agreement (EFTA) represents countries throughout Western Europe. It was initially formed in 1960 by Austria, Denmark, Norway, Portugal, Sweden, Switzerland, and the UK. The overall objective of the EFTA and of these founding states was to remove trade barriers throughout Western Europe, such as import tariffs and quotas, and to uphold open practices in world trade (EFTA Page).