Which of the following entity has recently been negotiated to replace NAFTA with effect from July 2020?
USMCA
Understanding NAFTA and its Replacement
The question asks about the entity that recently replaced the North American Free Trade Agreement (NAFTA) with effect from July 2020.
NAFTA was a trade agreement between Canada, Mexico, and the United States that came into effect in 1994. It aimed to eliminate most tariffs on products traded between these three countries.
Identifying the NAFTA Replacement
Over the years, there were discussions about renegotiating or replacing NAFTA. A new agreement was negotiated and eventually ratified by all three countries.
Let's examine the options provided:
- Quad group of countries: This is an informal strategic security dialogue between Australia, India, Japan, and the United States. It is not a trade agreement and did not replace NAFTA.
- USMCA: This stands for the United States-Mexico-Canada Agreement. This agreement was negotiated to replace NAFTA. It was signed in 2018 and came into effect on July 1, 2020.
- Shanghai cooperation organisation: The SCO is a Eurasian political, economic, and security alliance. Its members include China, India, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan, and Uzbekistan, among others. It is not related to North American trade or the replacement of NAFTA.
- Trans Atlantic organisation: This is a general term. While there are various transatlantic agreements and organizations (like NATO or potential trade deals between North America and Europe), none of these specific entities replaced NAFTA. NAFTA was a North American trade agreement.
Based on the facts, the United States-Mexico-Canada Agreement (USMCA) is the trade deal that officially replaced NAFTA and became effective in July 2020.
Conclusion
The entity that replaced NAFTA with effect from July 2020 is the USMCA.
| Agreement/Organisation | Description | Replaced NAFTA? | Effective Date (of NAFTA replacement) |
|---|---|---|---|
| NAFTA | North American Free Trade Agreement (Original) | N/A (It was the original) | Effective 1994 |
| USMCA | United States-Mexico-Canada Agreement | Yes | July 1, 2020 |
| Quad group of countries | Strategic security dialogue (Australia, India, Japan, US) | No | N/A |
| Shanghai cooperation organisation | Eurasian political, economic, security alliance | No | N/A |
| Trans Atlantic organisation | General term for alliances/agreements across Atlantic | No | N/A |
Revision Table: Key Trade Agreements
| Term | Meaning |
|---|---|
| NAFTA | North American Free Trade Agreement, a trilateral trade bloc in North America. |
| USMCA | United States-Mexico-Canada Agreement, the successor to NAFTA. |
Additional Information on USMCA
The USMCA introduced several updates compared to NAFTA, including changes related to rules of origin for automobiles, labor provisions, intellectual property protections, and digital trade.
It aims to create a balanced trade relationship among the three member countries.
Important Questions from International Economic institutions
General Agreement on Tariffs and Trade was formalised in the year:
In which of the following years was ADB (Asian Development Bank) established?
What is the CORRECT sequence of the following?
A. Uruguay Round
B. Kennedy Round
C. Doha Round
D. Geneva Round
Choose the correct answer from the options given below
Match List-I with List-II:
List I
(Trade and Finance Institution)
List II
(Headquarters)
a) WTO i) Brussels b) IMF ii) Geneva c) FAO iii) Washington d) EU iv) Rome Choose the correct option from those given below:
Match List I with List II:
List- I
Type of Agreement
List – II
(Explanation)
A.
NAMA
(I)
Liberation of International Investments
B.
GATTs
(II)
Includes industrial goods. textile. jewellery, fish and fisheries products and manufacturing industries
C.
TRIMs
(III)
Liberalisation of trade in goods and services
D.
TRIPs
(IV)
Provides monopoly power to owners of intellectual ‘property
Choose the correct answer from the options given below -
