Certified Supply Chain Professional (CSCP) Practice Exam

What was a significant outcome of NAFTA?

1. Immediate increase in tariffs

2. Gradual elimination of trade tariffs

3. Complete cessation of trade with non-member countries

4. Formation of mandatory tariffs

The correct answer is: Gradual elimination of trade tariffs

The significant outcome of NAFTA (North American Free Trade Agreement) was the gradual elimination of trade tariffs. Implemented in 1994, NAFTA aimed to foster trade between the United States, Canada, and Mexico by reducing or eliminating duties on goods traded among these countries. This reduction in tariffs was a critical aspect of NAFTA, as it encouraged increased trade flows, economic integration, and competitiveness among the member nations. Over time, this gradual elimination helped lower prices for consumers and opened up new markets for businesses in all three countries. By reducing barriers to trade, NAFTA facilitated cross-border investment and created an environment for more significant cooperation in various sectors, including agriculture, manufacturing, and services. The focus on gradual rather than immediate tariff reduction allowed industries time to adjust and adapt, thereby mitigating potential disruptions that could arise from sudden changes in trade policy.