You probably visit the town closest to your home all the time. Maybe your grandparents live there, or the best mall or movie theatre or skating rink is located there. When you visit this nearby town, you probably buy things—a movie ticket or a meal in a restaurant or even clothes at the mall—without even thinking about it.

But what if the town nearest yours was part of a different country? How would that change things?

Well, that would be the case if you lived near Tijuana, Mexico. Tijuana is one of Mexico's largest cities. It is located on the Pacific Ocean just a few short miles from the border with the United States. And it is just 20 miles south of downtown San Diego, one of California's largest cities.

Neighbors from San Diego and southern California have always played an important role in Tijuana's history, and people from the two cities have always traveled back and forth between them. During the first half of the 20th century, Tijuana was seen as a very exciting and exclusive place; Hollywood movie stars would drive to Tijuana to enjoy the nightlife. And many people who lived in Tijuana crossed the U.S. border every day to work or shop in San Diego or to build a new life in California.

But even though the two towns were practically next-door neighbors, and even though people traveled between them every day, they were still in different countries. And that meant that special taxes—or tariffs—were charged on every item that crossed the border between the two cities.

All of that changed, though, in 1994. On January 1st of that year, the North American Free Trade Agreement, or NAFTA, went into effect. NAFTA said that for purposes of trade, Mexico, the United States, and Canada would be treated as a single country. No more tariffs added to the price of goods. No more special rules (or "non-tariff barriers") about moving goods between the United States and Mexico.

Is free trade between Canada, Mexico, and the U.S. a good thing?

Some people say "yes." They say that we are all neighbors anyway and that trading freely with our neighbors—just as we would with neighboring towns within our own countries—is better for everyone. They say that NAFTA has led to better jobs, more opportunity, and even to environmental cleanups along the border between Tijuana and San Diego. Companies such as APL that are actively involved in trading and moving goods between borders support NAFTA and other free trade agreements; they believe it helps trade when the rules for trade are the same on both sides of the border.

But other people say "no." They say that even though we are neighbors, we all live in different countries, and need to take care of our own countries and our own people first. They say that people in the U.S. have lost jobs because of NAFTA, because some U.S. companies have moved to Mexico where wages are lower to manufacture their products. And they say the environment could be hurt if more and more of these companies (called "maquiladoras") move to the Mexico/U.S. border to assemble their products.

What do you think? Should the borders between Canada, the U.S., and Mexico (or other countries) matter when we trade goods?

How has NAFTA affected your town? If you live in North America, use the library or Internet to find an article about NAFTA in your local newspaper. What does it say about NAFTA and your town?

Check out past Trade Topics entries!