The United States first entered into a free trade agreement with Canada but Mexico was in the middle of overhauling its approach to international trade so they asked to join. The agreement makes it illegal for the parties to discriminate between national and foreign producers in the trading of services, government markets and investment.
Many of the barriers were removed immediately but some had to be removed slower especially ones with Mexico because their tariffs were about 200% higher than others. Gives North America a competitive edge in the global market.
Both left standards to be decided by the country but highlighted things like fair wages workers rights and sustainable development. Labor - Is essentially a non-invasive way of promoting worker rights. It is non-invasive in that it does not require any country to adopt any new worker rights laws or conform to any international standards — only to enforce what it already has on the books and promote the 11 workers rights principles it outlines. Environment- to assess environmental impacts and promote education but again left standards to be determined and enforced by the countries themselves. Basically to ensure that economic growth is consistent with goals of sustainable development.Chile- Congress and the Whitehouse could not agree on the addition of Chile so instead they signed agreements with Canada and MexicoSmart border –after 9/11 stricter more secure flow of goods and people. As well as shared customs info. Security and Prosperity Partnership- was supposed to move NAFTA forward by expanding its agenda to include things like transportation, public health, security but it didn’t see huge success because people worried it was too much like the European union work and ruin our sovereignty.
Despite criticism NAFTA has done exactly what it was designed to do.All trade barriers have been removed and trade between them has increased. Trade has tripled. U.S. has seen lower oil and grocery prices. Uniform customs policies across all 3 borders provide for more efficient exports.
There are some parts of NAFTA that get ignored by all 3 countries and go unpunished. There have been many disputes over exporting Canadian water which has caused environmental issues to be raised. Loss of jobs in some sectors due to some businesses being unable to keep up with competitors or moving of jobs to other countries. After 9/11 border policies grew more strict which some say have hindered the flow of goods and people. Everything coming into the United States must be inspected which slows shipping times and raises costs. People must have passports to travel between the countries which also costs money. The biggest problem It has not addressed the uneven economic development, the different vulnerabilities, and the wide disparities among the three countries. The failure to take these differences into account meant that the burden of financial problems, has fallen disproportionately on the weaker parties.
These two provisions have been largely ignored over the years. Supporters of this option believe that dispute resolution in both the environmental and labor arena need to be improved in order to increase fairness as well as just better enforcement of the rules in general. Agreeing upon industrial standards to monitor greenhouse gases and a base rate for carbon taxes in order to hold all 3 countries accountable in the effort to save the environment. Improve TAA which is the agency designed to help retrain and relocate workers who face job loss due to trade.
Due to our current issues with Mexico on immigration and the fact that they are still not on an equal playing field with the U.S. and Canada we should leave the treaty with them as it is but improve agreements with Canada. Mainly environmental standards. Including prohibiting bulk water exports from Canada which has been the source of many disputes recently. As well as a revision of Chapter 11 which allows corporations to sue the national government of a NAFTA country in secret arbitration tribunals if they feel that a regulation or government decision affects their investment in conflict with these new NAFTA rights. Canadian officials feel that under chapter 11 the current trade dispute mechanisms have been abused. Revision of chapter 11 to shorten and reduce the costs of disputes, find permanent solutions, and reduce the polarization of trade disputes. Would improve U.S. and Canadian attitudes and further strengthen our relations.
Proposed by Vicente Fox Quesada when he was elected President of Mexico in 2000. With the model of the European Investment Fund in mind he wants to invest more in NAFTA to make it more effective. This plan with account for NAFTA’s inability to deal with uneven economic development.The fund could be administered by an international financial institution such as the Inter-American Development Bank.
I really struggled to decide what was best for the future of NAFTA because like I said it really has done the job it was designed to do and the issue at hand now is where do we go from here? I chose option C because option A seemed to me like it wasn’t enough, its just more of the same. Option B would alienate our close friend Mexico, and no one wants that. Option C will improve relations, help mitigate our immigration issues, bring out friend Mexico into the first world and ultimately create a powerhouse in the western hemisphere.The government has incentive systems to encourage investors to locate there, but the problem is a lack of infrastructure. Build them, and investors would come, immigration levels would decline and so would disparities in income. First, the center and south of the country have the highest rates of unemployment and, indeed, are the principal sources of immigrants to the border and to the United States. Secondly, the wage level is much lower in these areas, and the workers are no less educated than those on the border. Indeed, they are often the same workers. Finally, the region is not the polluted, cramped border.
NAFTAWhere do we go from here?<br />Kayleigh McCullough<br />
The Three Amigos<br />The North American Free Trade Agreement<br />Came into effect January 1, 1994<br />Created the largest trading bloc in the world<br />First trade agreement with <br /> developed countries and a third <br /> world nation.<br />Created a combined GDP of <br /> $6.2 Trillion<br />
Objectives of NAFTA<br />Remove all barriers on trade and investments over 15 years.<br />Promote fair competition between the countries<br />Increase investments<br />Provide protection for intellectual property rights <br />Enhance competitiveness in the global market<br />
Changes Overtime<br />1994 – Labor and Environment supplemental agreements are added<br />1995- Attempts to add Chile as a member<br />Instead Chile signs agreements with Canada and Mexico<br />2001- Smart Border Declaration<br />2005- Security and Prosperity Partnership<br />
Positives<br />NAFTA has provided an anchor for the economic health of North America. <br />Improved overall GDP <br />Increased transparency<br />Increased exports<br />Helps North American countries against the European Union <br />
Negatives<br />Many violations of NAFTA go unpunished<br />Threats to the Canadian water supply and ecosystem.<br />Loss of jobs in some sectors<br />Tougher border policies since 9/11 have hindered the flow of goods and people. <br />No clause to address market failures or uneven economic development<br />
Option A<br />Improve the labor and environmental supplements and require periodic reviews to assess NAFTA.<br />Require officials to consult with environmental ministries over environment related trade disputes<br />Create common industrial standards to monitor Green House Gas emissions<br />Agree upon a base rate for carbon taxes<br />Improve programs to retain and relocate workers who’ve lost their jobs due to trade. <br />Improved dispute resolution tactics for laborers and unions. <br />
Option B<br />Take a more U.S.-Canada centered approach.<br />Mexico is too underdeveloped to continue strengthening our relations with them <br />Prohibit bulk water exports from Canada <br />Improve environmental standards.<br />Revise chapter 11 of NAFTA which has caused many disputes with Canada.<br />
Option C<br />Create a common North American Market<br />A customs union<br />A common external tariff<br />Greater coordination of policies<br />Common monetary polices<br />Free flow of labor<br />Development of poorer regions in Mexico<br />
Option C<br />A customs union would ease the flow of goods and people. <br />Coordination of policies would allow for improved labor and environmental standards. <br />By building or improving roads from the border to the center of Mexico more investors would come<br />Immigration levels would decline along with income disparities <br />Creating a powerhouse in the Western Hemisphere<br />