Certified Supply Chain Professional (CSCP) Practice Exam

What does NAFTA stand for?

1. National Agreement on Free Trade Access

2. North American Free Trade Agreement

3. Netherlands and Asia Free Trade Agreement

4. North Atlantic Freight Trade Agreement

The correct answer is: North American Free Trade Agreement

The correct answer, North American Free Trade Agreement, accurately reflects the agreement established in 1994 among the United States, Canada, and Mexico. NAFTA was designed to remove trade barriers between these countries, promoting free trade and economic cooperation. By eliminating tariffs and facilitating cross-border exchanges, it aimed to enhance economic growth and competitiveness within the region. This agreement had significant impacts on various sectors such as agriculture, manufacturing, and services, and it laid the foundation for further trade discussions, including the more recent United States-Mexico-Canada Agreement (USMCA), which succeeded NAFTA. The other choices do not correspond to any recognized trade agreements. For instance, “National Agreement on Free Trade Access” and “North Atlantic Freight Trade Agreement” do not represent actual agreements, while “Netherlands and Asia Free Trade Agreement” incorrectly suggests a connection between Europe and Asia that is not represented by NAFTA. Understanding the purpose and impact of NAFTA provides insight into the dynamics of international trade relations in North America.