NAFTA is a trade agreement between Canada, Mexico, and the United States that provides for the elimination of tariffs on goods shipped between the three countries. It was implemented in 1994 with the goals of solidifying trade relationships, reducing inflation and foreign debt in Mexico, and creating more jobs. Initial reactions to NAFTA were mixed, as Mexico experienced a peso crisis but trade increased. Long term impacts include growth in some sectors, job losses and gains in different countries, increased immigration, and environmental agreements along the US-Mexico border. Debates continue around impacts on sectors like agriculture, trucking, and the future of NAFTA expansion.

1. Katy Haas Coordinator, Alianzas www.alianzas.us The North American Free Trade Agreement

4. Why Enter a Free Trade Agreement?

5. Levels of Economic Integration *If the policies are not just harmonized by separate governments, but have a unified government with binding commitments on all members, then you reach political integration and have “full economic integration”.

6. What is NAFTA? Effective as of January 1, 1994 A trade agreement between CANADA, MEXICO, and the UNITED STATES which provides for the elimination of tariffs on North American goods shipped among the three countries.

7. Background of NAFTA An Introduction Zedillo Clinton Salinas Marcos

8. UNITED STATES: Would solidify an expanding trade relationship, which would spur job creation at home and help to continue the revolutionary shift throughout Latin America away from state controlled markets toward freer markets. MEXICO: Lower inflation and foreign debt; create more well-paying jobs for Mexicans, thus producing less incentive for Mexicans to work illegally in the U.S.; Mexico would become a richer market for American exporters. Would exert presidential authority, improve inter-American relations and advance the cause of global trade liberalization. Expectations and Goals

9. Reaction After Implementation How the Countries Were Affected Immediately How They Are Affected Now

10. Top U.S. 1. Aircraft 2. Electronic Computing Equipment 3. Motor Vehicle Parts 4. Motor Vehicles 5. Semiconductors 6. Aircraft/Space/Missile Parts 7. Chemicals 8. Plastics 9. Airplane Engines/Parts 10. Refined Petroleum Products 1. Motor Vehicles 2. Oil/Natural Gas 3. Motor Vehicle Parts 4. Semiconductors 5. Electronic Parts and Imports Exports

13. The Mexican Peso Crisis Was NAFTA to Blame? Wages in United States and Mexico

14. What about America’s Farmers? BENEFITS: More export opportunities. Since NAFTA was approved in 1993, U.S. agricultural exports to Mexico have nearly doubled. DISADVANTAGES: Face regulations that increase the costs of production while foreign competitors gain from cheap production and labor.

17. Impact on: Environment NAFTA Environmental Agreements: North American Agreement on Environmental Cooperation (NAAEC) - commission to enforce environmental law. Border Environment Cooperation Commission and the North American Development Bank - commission to address pollution problems along the U.S.-Mexican border

18. Trucking Industry The areas of concern include: vehicle safety, driver training, environmental issues and possible illegal drug trafficking. A recent investigation determined that the average 18-wheeler in Mexico is 40% overloaded, carrying a gross vehicle weight of more than 120,000 pounds. If U.S. truckers operated at a similar overcapacity, interstate highways would have a life span of 14 years, as opposed to their 40-year design life.

19. Missouri’s Role

20. Canada and Mexico are Missouri’s first- and second-largest export markets, respectively, accounting for 50.5% of Missouri’s total exports 1999. Between 1994 and 1999, Missouri exports to NAFTA partners increased 63.4%. Missouri’s Role (continued)

21. Mid-Continent International Trade Corridor 1. A trade pattern 2. A system of connecting highways and rail routes 3. An opportunity to strengthen economic development in a region

22. Missouri and Employment

24. NAFTA’s Future Where is it going and what effects will it have? U.S.-Central American Free Trade Agreement Free Trade Area of the Americas (FTAA)

25. Conclusion

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