The North American Free Trade Agreement (NAFTA) was signed in 1992 and came to force in
1994; it was entered between Canada, the United States, and Mexico. The purpose of the trade
agreement was to eliminate most tariffs and foster trade partnership between the three countries
in the agreement. A free-trade bloc was created among the North American countries to assist
them in growing or developing just like the European Union.
The elimination or trade tariffs saw an increased in trade relations between the countries. There
was an increase in exportation and import among the countries. Companies could be able to
establish new firms in the different jurisdictions. For instance, a country like Mexico attracted
many American firms due to their cheap labor cost. This in turn affected the labor market in the
United States as some of its citizens lost jobs.
NAFTA has been attributed to loss of jobs in the United States, which has been experienced in
North Carolina. Although, it will be a challenge in imposing a 25% tariff on all foreign-
manufactured textiles and furniture. This is because these goods obtained the status of “National
goods”, as they were listed to be goods that will be exempted from tariffs. Therefore, North
Carolina will be in breach of the agreement that was entered between Mexico, Canada, and the
North Carolina is bound by the agreement that was entered by the United States. Although, it has
an autonomous government; it is still bound by the agreement that was entered by the federal
government of the United States (Bondarenko, 2019). Therefore, imposing tax will amount to
breach in entirety by the United States. To create jobs and markets for the textile and furniture
industry, the state of North Carolina should also seek to exploit the external market. Imposing
tariffs will be a violation to a trade pact that was entered to eliminate tariffs that were hindering
the trade between the members of the pact, rather than sabotaging the position of the United
States, it will, therefore, be necessary to consider a wider market. The violation of the agreement
will soil the commitment of the United States in the pact.