Deb\'s Auto Alarms has sold car alarms in the United States for 15 years. Owner

Question

Deb's Auto Alarms has sold car alarms in the United States for 15 years. Owner Deborah Lefkowitz has read about the opportunities that globalization presents for businesses, and she is thinking about seeking entry to several international markets. She asks you for advice: I've heard about free trade agreements among different groups of countries: World Trade Organization (WTO), the North American Free Trade Agreement (NAFTA), the European Union (EU), the Association of Southeast Asian Nations (ASEAN), Mercosur in Latin America, the African Free Trade Zone (AFTZ) . . . In general, it seems as though these agreements have had positive effects on economic growth, but they have also been controversial in some ways. What can you tell me about them? Based on your knowledge of international trade organizations, answer the following question Which of the following statements correctly describes the North American Free Trade Agreement (NAFTA)? Check all that apply. O Businesspeople in the United States, Canada, and Mexico have mixed opinions about whether NAFTA has been a success. O NAFTA reduced the amount of trade among the countries involved NAFTA dramatically reduced tariffs on goods traded among the United States, Canada, and Mexico. A drawback of NAFTA is that it has erected barriers to the entry of small businesses into the international market

Explanation / Answer

While both (1) and (2) are true. (1) is true because many businesspersons have an opinion in favor of NAFTA as they think that it had a stimulating effect on the business. While others think that it has an adverse effect on employment. (2) is true in that the main purpose of NAFTA is to reduce the tariffs of export/ import.

We cannot agree with (3). (3) is not correct because due to NAFTA, the amount of trade has increased substantially. (4) is also correct because due to NAFTA and its administrative barriers, small businesses have felt barriers in international trades.

So, the correct option seems (1), (2), and (4)

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