NAPHTHA is the acronym in English of North American Free Trade Agreement (North American Free Trade Treaty), a economic block formed by the USA, Canada and Mexico.
The main objective with the creation of NAFTA was to reduce or eliminate trade barriers between the three countries that made up North America. The formation of the economic bloc arose as an attempt to compete with the European Union (EU), a bloc formed by European countries and which proved to be a great success in the world economic panorama.
NAFTA was created in 1993, but did not become operational until January 1, 1994. The end of the agreement was declared by the President of the United States in August 2018.
Among the main objectives of NAFTA was the end of customs and economic barriers, reducing trading costs between member countries.
However, unlike what happens in the European Union, NAFTA did not have a single currency between member countries and free transit between citizens was also not allowed.
NAFTA Objectives
The objective of the formation of NAFTA was to create a free trade zone between the countries of the bloc to facilitate commercial transactions between the countries. For this, the following measures were adopted:
- Elimination of trade barriers between member countries;
- End of customs barriers;
- Reduction of import and export trade costs between member countries;
- Development of defense mechanisms for intellectual property produced within countries;
Read more about the meaning of free trade zone.
End of NAFTA
In August 2018, Donald Trump announced the end of NAFTA. However, the economic agreement between the countries did not cease to exist, but it underwent changes.
The countries that were part of NAFTA renegotiated the parameters of their trade agreement, which became known as United States-Mexico-Canada Agreement (USMCA). The new agreement was signed by representatives of the three countries on November 30, 2018.
know more about economic blocks and see the meanings of European Union, BRICS and Mercosur.
Naphtha: fuel source
The word "naphtha" can also mean a petroleum derivative used as a fuel. Also considered one of the raw materials for obtaining ethane, propene, benzene and "synthesis gas", it is used for the production of piped gas in domestic and commercial kitchens.