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Difference Between NAFTA and TPP

Difference Between NAFTA and TPP

The North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP) are two very different trade agreements. While NAFTA is between the United States, Canada, and Mexico, the TPP includes twelve countries from around the Pacific Rim.

The main difference between the two is that NAFTA focuses on reducing tariffs and barriers to trade within North America, while the TPP goes beyond just tariff reduction and seeks to establish common labor and environmental standards among member countries. Furthermore, critics argue that NAFTA has had negative consequences for American workers, while supporters of the TPP argue that it will benefit workers in all member countries.​

What is NAFTA?

NAFTA is a free trade agreement between Canada, the United States, and Mexico. The agreement came into effect on January 1, 1994. NAFTA has eliminated tariffs on most goods and services traded between the three countries. NAFTA has also created opportunities for investors in each country to invest in other countries.

NAFTA has been successful in increasing trade and investment between the three countries. NAFTA has also led to the development of supply chains that span all three countries. NAFTA has been criticized for causing job losses in certain sectors in each country, but overall NAFTA has been beneficial to the three countries involved.

What is TPP?

TPP is a trade agreement between 12 Pacific Rim countries. The TPP countries are Australia, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States (U.S.), Vietnam, and Brunei Darussalam. TPP eliminates tariffs (taxes on imported goods) and reduces ‘non-tariff barriers (such as regulations) to trade in goods and services between TPP countries.

  • TPP also addresses areas such as investment, competition, and intellectual property. The TPP agreement was signed on 4 February 2016 in Auckland, New Zealand by the 12 TPP countries.
  • However, the TPP cannot enter into force unless it is ratified by each TPP country according to its own domestic procedures. The U.S., Japan, and 10 other Pacific Rim countries have all ratified the TPP.
  • As of July 2017, the TPP has not yet entered into force because it has not been ratified by all 12 signatories. Ratification by at least 6 of the 12 signatories, which must together account for at least 85% of the TPP region’s GDP, is required for the TPP to enter into force.
  • The Trade Ministers of the 11 remaining TPP countries met on 10 May 2017 in Hanoi, Vietnam to discuss options for bringing the TPP into force following the withdrawal of the United States from the Agreement.

They issued a statement reaffirming their commitment to the successful conclusion of the TPP as a high-standard regional agreement without the U.S.TPP Ministerial Meetings has continued on an annual basis since then.

Difference Between NAFTA and TPP

NAFTA and TPP are both trade agreements that aim to promote economic growth and reduce barriers to trade. However, there are several key differences between the two.

  • NAFTA is a trilateral agreement between Canada, the United States, and Mexico, while TPP is a multilateral agreement that includes twelve Pacific Rim countries.
  • NAFTA focuses on reducing tariffs and ensuring that companies can freely move goods and services between the three member countries.
  • TPP also aims to reduce tariffs, but it goes further by addressing issues such as intellectual property rights and environmental protection.

As a result, the TPP is a more comprehensive agreement than NAFTA. Another key difference is that NAFTA has been in effect for over twenty years, while the TPP has not yet been ratified. This means that NAFTA is a tried-and-tested agreement, while the TPP is still largely untested. For these reasons, NAFTA and TPP are two very different trade agreements.


The NAFTA and TPP are two different types of trade agreements. The key difference between the two is that the TPP includes more countries, while NAFTA focuses on North America. Additionally, the TPP has stricter regulations when it comes to environment and labor standards. Both agreements have pros and cons for participating countries, so it’s important to understand each before making a decision about which is better for your business.

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