Difference Between NAFTA and EU (With Table)

NAFTA and EU are both treaties. Both of these aim at creating a zone that is free from trade restrictions which would actually shrink down the growth in the economy. NAFTA and EU both have their difference when it comes to size, their scope, implementations and their goals while making a decision.

NAFTA vs EU

The difference between NAFTA and the EU is that NAFTA has its goal set to eliminate the barrier of trade and investment between Canada, the US and Mexico. On the other hand, the main goal of the EU is to create a monopoly of the European market by creating rules and implementing duties that would apply to all people of those states, which would ensure freedom of movement in goods and capital.

The full form of NAFTA is the North American free trade agreement. This is a two-sided trade agreement within Canada, the United States and Mexico. This was first implemented in the year 1994 on the first of January. When Trump was the president, NAFTA had been negotiated again since Trump argued on the fact that the US didn’t get many benefits as compared to Mexico and Canada by this agreement.

The full form of the EU is the European Union. The creation of the EU began right after World War 2 came to an end. This was implemented in the year 1958. Initially, at first, when it was formed, only six members were a part of this treaty. They were the Netherlands, Belgium, Luxembourg, Italy, France and Germany. Later on, there was an increase in the number of countries as the years came by, forming an alliance of about 28 countries in total today.

Comparison Table Between NAFTA and EU

Parameters of ComparisonNAFTAEU
Full formThe full form of NAFTA is a North American free trade agreement.The full form of the EU is the European Union.
Number of membersNAFTA contains 3 countries in its treaty.The EU contains 27 countries in total.
CurrencyIn NAFTA, all three countries have three different currencies which people use.In the EU, there is one common currency for all the 28 members of the state, is the Euro.
AimNAFTA aims at an economic relationship.EU aims at creating freedom at political socials as well as trade restrictions between the members.
TariffNAFTA does not have a common external tariff.The EU does have a common external tariff.

What is NAFTA?

The full form of NAFTA is the North American free trade agreement. This is a two-sided trade agreement within Canada, the United States and Mexico. This was first implemented in the year 1994 on the first of January. When Trump was the president, NAFTA had been negotiated again since Trump argued on the fact that the US didn’t get many benefits as compared to Mexico and Canada by this agreement.

The NAFTA contained provisions such as the availability of flexible trade relationship among the three countries, which could be done only by eliminating the economic barriers, promoting and protecting the property rights intellectually and government procurement by rules of origin between the three countries.

Even though NAFTA contains in its treaty the provisions which relate to the relationship of economic and procedures in a customized way, it did not cover any policy regarding areas and didn’t have any aim at setting a political or territorial agreement between these three countries. NAFTA is purely an agreement made for economic purpose only between the US, Mexico and Canada.

What is EU?

The full form of the EU is the European Union. The creation of the EU began right after World War 2 came to an end. This was implemented in the year 1958. Initially, at first, when it was formed, only six members were a part of this treaty. They were the Netherlands, Belgium, Luxembourg, Italy, France and Germany. Later on, there was an increase in the number of countries as the years came by, forming an alliance of about 28 countries in total today. This treaty was finally created in the year 1993.

This treaty has aimed at promoting world peace in the entire world by helping improve the standard of living among people in most parts of Europe. This gave a result in forming a single currency named the Euro which further Persuaded a trade free movement among the European countries. Through this, people were able to move and travel freely within the European Boundaries without actually having any visas.

The main provisions set by the EU were in order to enhance the economic, political and social cohesion among the states by promoting social well-being among them. This promoted a sense of security and freedom among the states, which encouraged people to have a competitive market demand due to the generation of a common currency that is the Euro. This treated all members of all the European states without any discrimination and any kind of exclusion that was earlier made socially.

Main Differences Between NAFTA and EU

  1. The full form of NAFTA is a North American free-trade agreement, and on the other hand, the full form of the EU is the European Union.
  2. NAFTA contains 3 members in its treaty, and on the other hand, the EU contains 28 countries in total.
  3. In NAFTA, all three countries have three different currencies which people use, and on the other hand, in the EU, there is one common currency for all the 28 members of the state, is the Euro.
  4. NAFTA aims at an economic relationship only, whereas the EU aims at creating freedom at political socials as well as trade restrictions between the members.
  5. NAFTA does not have a common external tariff as such, while, on the other hand, the EU does have a common external tariff.

Conclusion

In the end, there is an explanation that states that the treaty binned by the EU is certainly more complex and diverse as compared to NAFTA. NAFTA has only three members, while on the other hand, the EU had 28 members in total. Both NAFTA and the EU differ widely when it comes to borders relating to currency, scope, implementation of the rule, etc. 

NAFTA aims at economic peace while the EU aimed at global peace overall. NAFTA and EU are both treaties. Both of these aim at creating a zone that is free from trade restrictions which would actually shrink down the growth in the economy.

References

  1. https://books.google.com/books?hl=en&lr=&id=CGsAVNftkecC&oi=fnd&pg=PR9&dq=nafta+vs+eu&ots=M63FCO2Bd3&sig=0AX2zct03m3xfeIoyT0ebWAWmbs
  2. https://www.jstor.org/stable/2954211
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