NAFTA
Definition
NAFTA (North American Free Trade Agreement) is an agreement between Canada, Mexico, and the United States that eliminates trade barriers among these countries. It promotes free trade by reducing tariffs on goods and services.
Analogy
Think of NAFTA as a giant shopping mall where people from different countries can freely buy and sell products without having to pay extra taxes or fees. It's like having a huge sale where everyone benefits from lower prices.
Related terms
Tariffs: Taxes imposed on imported goods to protect domestic industries.
Globalization: The process of increasing interconnectedness among countries through economic integration, communication, and cultural exchange.
Trade deficit/surplus: A trade deficit occurs when a country imports more than it exports, while a trade surplus happens when exports exceed imports.
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