Why was NAFTA created?

Why was NAFTA created?

The NAFTA stands for North American Free Trade Agreement it is one of the biggest trading blocks. Why was NAFTA created?

NAFTA is created to eliminate the barriers of import and export between the countries. The NAFTA consist of three countries that is Canada, Mexico, and the United States.

How has NAFTA affected the U.S. economy?

As it is into the NAFTA, the barriers are low and the tariff which was implied on the import and export are less. So it also increases the trading between the countries and which has a positive impact on the GDP of the U.S by around 0.5 percentage ($80 billion).

It is also having a negative impact on the U.S because as the trading increase the people are losing their job because of availability of the cheaper product from the other countries (15 to 20 percent more on average than the jobs that were lost ).

How has it affected the Mexican economy?

The Mexican economy is very diverse in nature. There are two parts which were divided the Mexican economy. As it is a fast-growing economy with globally competitive multinationals with which having cutting-edge manufacturing plants and other is traditional enterprises. Here both the economy is moving in a different direction the traditional market is going into a huge loss due to global tradings in NAFTA and the other multinationals are growing with having sustainable growth

What impact has it had on Canada?

The NAFTA helped in boosting the Canadian economy. Which is also helped in lowering tariff barriers between the countries in cross-border gains. The Mexican investment in Canada becomes almost triple after the NAFTA. As well as the U.S investment holds more than 50% in total FDI (foreign direct investment) stock of Canada.

The Canadian export to the U.S also grew ($110 billion to $346 billion) under the effect of NAFTA.

What’s next for NAFTA?

In 2016 Donald Trump criticizing the pact for bringing U.S. job losses. Trump increased the import tariff coupon on steel and aluminum.

In early 2018 and threatening to do the same with autos.

In August 2018 U.S administration struck a deal with Mexico and Canada which Trump has labeled the U.S.-Mexico-Canada Agreement (USMCA). And all the parties agreed to the number of changes. Instead of having a sixteen-year timeframe, with a review after six years. There are New labor stipulations that are added to automobiles factories which are paying at least $16 per hour.

What is China’s one-child policy?

China flag
China flag

What is China’s one-child policy? how and why China introduced this policy? how it is good for the economy of the country? Why it is important? Is China’s one-child policy have any negative impact on the economy?

China’s one-child policy was part of birth planning program introduced to control the population of the country. Where it is actually to the setting of a limit of one child that the government could allow parents to have.

. It is actually to set a limit of one child that the parents could have.

Why china introduced one-child policy?

The rapid increase in the population during the period of the 1950s. At that time the government encouraged families to have as many children as possible. Because of Mao Zedong (he ruled as the Chairman of the Communist Party of China during the 1949-1976) believed that population growth will empower the country. And preventing the implementation of family planning programs in earlier development of China.
Moreover, the population was rising under Mao Zedong. The population increased from around 540 million in 1949 to 940 million in 1976. Moreover, the population was rising.

birth rate after one-child policy
Birth rate and Death rate of during the great leap forward and one-child policy

Infant mortality falls from 227 per thousand births in 1949 to 53 per thousand in 1981, and life expectancy suddenly increased from around 35 years in 1948 to 66 years in 1976 under the leadership of Mao.


There are some advantages to the one-child policy. Which helped to develop the country economic status. Following are the advantages:-

  • Population control:- Most common advantage of One-child policy is control of the population. Where there will be a decrease in the birth rate.
  • Increase in Employment Opportunites:- Due to the decrease in birth rate, there will be increased employment opportunities in futures. Children who are growing during this period will able to find jobs easily in the future.
  • Incentives:-People who follows the One-child policy, for them Chinaines government is providing incentives and additional benefits.


As there are some ups, there are also some downs to the one-child policy. These downs can affect on the country in every aspect socially and economically. As follows:-

  • Abortions:- Most of the parents prefer a boy than a girl. So there was been an increased rate of abortions in China because of a girl child. And to also escape from the penalties of baring the second child.
  • Imbalance in sex ratio at birth:- Because of the preference of boy more than girl by parents. Which led to more imbalance between a male and female ratio. This can affect both socially and economically.
  • Decreasing in growth rate:-Due sudden decrease in birth rate, there will less working labor which might affect the Country GDP(Gross Domestic Product) or economic growth in the future.
  • Imbalance in demand and supply of labor:- In future there will increase in the demand for the labor. But due to the one-child policy, there will be a decrease in the supply of labor, which can cause the imbalance in demand and supply of labor.

End of China’s one-child policy

In October 2015, China’s Government announced plans to abolish the one-child policy. The law was started on 1st January 2016. Now a family can have two children. The Decision was taken by the communist party of China in address to balance of male and female sex ratio.


Every country needs to plan future population control. Where in China’s one-child policy is more suitable for the short term. There are advantages for short term and downs are for the future. Where there should be a limit of 2 children per family for better population control.