What is NAFTA preferential treatment?

NAFTA preferential treatment refers to the reduced tariffs and trade barriers among the United States, Canada, and Mexico that were established under the North American Free Trade Agreement (NAFTA). This agreement aimed to facilitate trade between the three countries by allowing for smoother and more cost-effective importation of goods. Under NAFTA, products that meet specific rules of origin are eligible for lower tariffs or even duty-free treatment, which significantly benefits businesses and consumers in these countries by promoting trade.

This preferential treatment helps to create a more integrated and competitive economic environment among the three nations, encouraging companies to source materials and products from within the region rather than from outside sources that may have higher costs due to tariffs. By doing so, NAFTA enhances trade relationships and fosters growth in specific industries that benefit from this arrangement.