Agreements like NAFTA and CAFTA have been hot topics in the news over the past few years. These agreements have the potential to significantly impact international trade, as well as the economies of the countries involved. But what exactly are NAFTA and CAFTA, and how do they differ? Let`s take a quizlet-style look at these agreements and see what we can learn.

1. What is NAFTA?

NAFTA, or the North American Free Trade Agreement, is an agreement between the United States, Canada, and Mexico that was signed in 1992 and went into effect in 1994. The agreement eliminated or reduced tariffs, or taxes on imported goods, between the three countries. It also sought to facilitate investment and promote economic growth.

2. What are the benefits of NAFTA?

Supporters of NAFTA argue that it has led to increased trade and job creation, as well as lower prices for consumers. The agreement has also helped to integrate the economies of the three countries, making it easier for businesses to operate across borders.

3. What are the criticisms of NAFTA?

Critics of NAFTA argue that it has led to job losses in certain industries, particularly in manufacturing. They also claim that it has led to environmental degradation and a race to the bottom in terms of labor standards.

4. What is CAFTA?

CAFTA, or the Central American Free Trade Agreement, is an agreement between the United States and five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) that was signed in 2004 and went into effect in 2006. The agreement sought to expand trade and investment between the United States and these countries.

5. How does CAFTA differ from NAFTA?

While NAFTA covers primarily North America, CAFTA covers Central America. Additionally, while NAFTA eliminated or reduced tariffs on a wide range of goods, CAFTA focused more on agricultural products and textiles.

6. What are the benefits of CAFTA?

Supporters of CAFTA argue that it has led to increased trade and job creation, particularly in the agricultural sector. It has also helped to integrate the economies of the Central American countries with that of the United States.

7. What are the criticisms of CAFTA?

Critics of CAFTA argue that it has led to job losses and environmental degradation in Central America. They also claim that it has benefited primarily large corporations at the expense of small farmers and workers.

In conclusion, agreements like NAFTA and CAFTA are complex and have both benefits and drawbacks. As with any trade agreement, it is important to carefully consider the potential impacts on all parties involved. By understanding the similarities and differences between these agreements, we can better evaluate their effectiveness and make informed decisions about future trade policies.