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.

Service Marketing Definition and Characteristics

When it comes to marketing everything is not about selling a product for a company. There is another thing called services. Which are like teaching, Consultants, Software designer, accounting, cleaning, medical treatment, etc which are non-physical. And what is service marketing definition? and characteristics of services.

Service Marketing Definition

Economic activities whose output is not a physical product, is generally consumed at the time it is produced, and provides added value in forms that are essentially intangible concerns of its first purchaser is called services.

Today’s world service sector is growing faster than any other sector. Services sectors are creating more employment and high contribution to GDP in many countries.

Service Marketing Definition

Here is the service definition by American Marketing Association(AMA).

The activities, benefits or satisfactions which are offered for sale are provided in connection with the sale of goods.

Service Definition by American Marketing Association (AMA)

Activities of Promoting and selling of the services is known as services marketing.

Characteristics of the Services

The differences between goods and services are based on these Characteristics. And many of the strategies, tools, and frameworks are been developed for these characteristics of services. Following are the Characteristics of the services:

1) Intangibility

The most basic thing which differentiates characteristics of services is intangibility. Because services are performance or actions rather than objects. Which are cannot be seen, felt, tasted, or touched in the same manner that you can sense tangible goods.


A patient gets treatment by the doctor. The Patient cannot see or touch the services. Although a patient may able to see or touch other components like equipment or hospital room.

2) Heterogeneity

Because services are performances, frequently produced, consumed, and often co-created by humans, no two services will be precisely alike. People may differ in their performance from day to day or even hour to hour.

Heterogeneity also results because no two customers are precisely alike; each will have unique demands or experience the service in a unique way.

Because services are often co-produced and co-created with customers, customer behaviors will also introduce variability and uncertainties, resulting in heterogeneity of outcomes.


A Chef cannot make food twice exactly taste alike, because there will be some minor different in taste.

3) Simultaneous Production and Consumption

Whereas most goods are produced first, then sold and consumed, many services are sold first and then produced and consumed simultaneously. Customers that are present while the services are being produced and thus view and may even take part in the production process as co-producers or co-creators of services.

Simultaneously also means that customers will frequently interact with each other during the service production process and thus may affect each other’s experiences.


An automobile can be manufactured in the USA, shipped to India, sold two later, and consumed over a period of years. But restaurant services cannot be provided until they have been sold, and dining experience is essentially produced and consumed at the same time.

4) Perishability

Perishability refers to the fact that services cannot be saved, stored, resoled, or returned. In contrast to goods that can be stored inventory or resold another day, or even returned if customer is unhappy. Bad haircut could not be returned or can not be resold to another customer.


A seat in airplane or in a restaurant, an hour of lawyer’s time, or space in a shipping container not used or produced cannot be reclaimed and used or resold at a later time.


The service marketing definition is all about providing marketing to services. And these characteristics which make different from products. Based on characteristics of services many of the strategies, tools, and frameworks are been developed. These will characteristics apply to all services.