These agreements between three or more countries are the most difficult to negotiate. The larger the number of participants, the more difficult the negotiations. They are, by nature, more complex than bilateral agreements, insofar as each country has its own needs and requirements. For Mexico, the starting point is the 1982 debt crisis, which triggered a period of prolonged economic stagnation. At the time, Mexico imposed many of the same policies as Venezuela today – the nationalization of banks, the introduction of capital controls and the closing of severe trade barriers. This has resulted in years of negative growth per capita. President Clinton`s announcement on January 31, 1995 that mexico would provide approximately $50 billion in U.S. and international loan loans and guarantees has been greatly facilitated in Mexico and in the U.S. business community. After receiving the news, the peso appreciated and Mexican interest rates on 28-day government bond certificates fell.

Although economic indicators fluctuated to some extent after the announcement, greater stability was achieved. The package included a $20 billion line of credit from the United States, $17.759 billion from the International Monetary Fund, $10 billion from the Bank of International Settlement, $1 billion from Canada, $1 billion from Latin American countries and $3 billion from the International Trade Bank. Michael Porter, a contemporary trade theorist, says a nation`s main economic goal is to create a high and growing standard of living for its citizens. Porter says the ability to do so depends on the productivity with which a nation`s resources are used. Productivity is defined as the value of production produced by a unit of work or capital. It depends on both the quality and characteristics of the products and the efficiency with which they are manufactured. Therefore, the ability to export many goods produced with high productivity allows a nation to import many goods with lower productivity. This is desirable because it translates into higher national productivity. Whether your supply chain for small businesses could be affected by a trade agreement could be resolved by whether your small business is an importer (or buys imported goods) or an exporter (or sold exported goods) or none. This helps increase U.S.

exports to the rest of the world, where 95% of our potential customers live. Increased U.S. exports are driving up business turnover, boosting our economy and adding to the 38 million U.S. jobs currently dependent on trade. If your small business before NAFTA was making labour-intensive products in the U.S. and you saw contractors relocating that type of production to Mexico to take advantage of lower labour costs, you can see the impact of that trade agreement. The North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP) are two of the well-known trade agreements, but there are many others that govern trade between countries. Most free trade agreements owe their success, at least in part, to the prior removal of trade barriers between contracting parties.

For example, integration and cooperation in the iron, steel, coal and nuclear energy sectors set a precedent for Western Europe to remove barriers in other sectors. The U.S.-Canada Free Trade Agreement was preceded in 1965 by the Automotive Products Trade Act (APTA), which authorized duty-free trade between the United States and Canada in almost all vehicles and parts. This has led to a complete integration of automotive production between the two countries. Similarly, many U.S. companies use the Mexican maquiladora program and the U.S. tariff supply 9802.00.80, as evidenced by the increasing use of assembly operations in Mexico by these companies.