During the second presidential debate in 1992, Ross Perot argued: In a 60-minute interview in September 2015, 2016 presidential candidate Donald Trump called NAFTA “the worst trade deal ever approved in the United States”[121] and said that if elected, he would “renegotiate it, or we break it.” [122] [123] Juan Pablo Castañón [es], president of the consejo Coordinador Empresarial trade group, expressed concern about renegotiations and the desire to focus on the automotive industry. [124] A number of trade experts have stated that withdrawal from NAFTA would have a number of unintended consequences for the United States, including limited access to its largest export markets, reduced economic growth, and higher prices for gasoline, cars, fruits and vegetables. [125] Members of private initiative in Mexico have noted that many laws need to be amended by the U.S. Congress to eliminate NAFTA. This decision would ultimately lead to legal complaints from the World Trade Organization. [124] The Washington Post noted that a review of the scientific literature by the Congressional Research Service concluded that “the overall net effect of NAFTA on the U.S. economy appears to have been relatively modest, largely because trade with Canada and Mexico accounts for a small percentage of U.S. GDP.” [63] The North American Free Trade Agreement (NAFTA) was a three-country agreement negotiated by the governments of Canada, Mexico and the United States, which entered into force in January 1994. NAFTA eliminated most tariffs on products traded between the three countries, with a focus on trade liberalization in agriculture, textiles and automotive manufacturing. The agreement also aimed to protect intellectual property, establish dispute settlement mechanisms, and implement labour and environmental protection measures through subsidiary agreements. NAFTA fundamentally reshaped North American economic relations, resulting in unprecedented integration between the developed economies of Canada and the United States, as well as the developing economies of Mexico. In the United States, NAFTA was originally supported by both sides; It was negotiated by Republican President George H.W. Bush, passed by a Democratic-controlled Congress and implemented under Democratic President Bill Clinton.
Regional trade tripled under the agreement and cross-border investment between the three countries also increased significantly. A free trade agreement between Canada and the United States was concluded in 1988, and NAFTA essentially extended the provisions of that agreement to Mexico. NAFTA was established by the governments of U.S. President George H.W. Bush, Canadian Prime Minister Brian Mulroney and the Mexican President. Carlos Salinas de Gortari negotiated. A provisional agreement on the Pact was reached in August 1992 and signed by the three Heads of State or Government on 17 December. NAFTA was ratified by the national legislators of the three countries in 1993 and entered into force on January 1, 1994. When NAFTA negotiations began in 1991, the goal of the three countries was to integrate Mexico into the high-wage developed countries of the United States and Canada.
The hope was that trade liberalization would bring Mexico stronger and more stable economic growth by creating new jobs and opportunities for its growing workforce and preventing illegal migration. For the U.S. and Canada, Mexico was seen as both a promising market for exports and a more profitable investment location that could improve the competitiveness of U.S. and Canadian companies. A fourth round of talks included a U.S. call for a sunset clause that would end the deal in five years unless the three countries agree to maintain it, a provision that U.S. Commerce Secretary Wilbur Ross says would allow countries to end the deal if it doesn`t work. Canadian Prime Minister Justin Trudeau met with the House Ways and Means Committee because Congress is expected to pass a bill that would nullify the treaty provisions if Trump tried to withdraw from the pact. [136] On January 29, 2020, President Donald Trump signed the agreement between the United States, Mexico, and Canada. Canada has not yet adopted it in its parliamentary body until January 2020. Mexico was the first country to ratify the agreement in 2019.
NAFTA has not eliminated regulatory requirements for companies wishing to trade internationally, such as . B rules of origin and documentation requirements that determine whether certain goods may be traded under NAFTA. The free trade agreement also includes administrative, civil and criminal penalties for companies that violate the laws or customs procedures of the three countries. NAFTA also ushered in a new era of free trade agreements, which spread as the World Trade Organization`s (WTO) global trade negotiations stagnated, and it pioneered the incorporation of labour and environmental regulations, which became increasingly comprehensive in subsequent free trade agreements [PDF]. The USMCA secured stronger enforcement mechanisms for labor regulation than the original agreement, prompting the AFL-CIO, the largest U.S. union group, to back the pact — a rare endorsement by a group that was highly critical of NAFTA. NAFTA achieved its seven objectives and established the largest free trade area in the region in terms of gross domestic product. It has also increased foreign investment in all three countries.
The Clinton administration negotiated with Canada and Mexico a parallel agreement on the environment, the North American Agreement on Environmental Cooperation (NAAEC), which led to the creation of the Commission for Environmental Cooperation (CEC) in 1994. The surplus in trade revenues, combined with the deficit with the rest of the world, has created a dependency on Mexico`s exports. These effects were evident during the 2001 recession, which resulted in a low or negative rate of Mexican exports. [74] The overall impact of the agricultural agreement between Mexico and the United States is controversial. Mexico has not invested in the infrastructure needed for competition, such as efficient railways and highways. This has led to more difficult living conditions for the country`s poor. Mexico`s agricultural exports grew by 9.4% per year between 1994 and 2001, while imports grew by only 6.9% per year over the same period. [69] “A number of proposals that the U.S. has put on the table receive little or no support from the U.S. business and agriculture community.
It`s not clear who they should benefit from,” said John Murphy, vice president of the United States. Chamber of Commerce. [135] Pat Roberts, the U.S. senator from Kansas, called for an outcry against Trump`s anti-NAFTA measures, saying the “problems affect real jobs, real life, and real people.” Kansas is a major agricultural exporter, and farm groups warn that the mere threat of leaving NAFTA could cause buyers to downplay uncertainty by looking for non-U.S. sources. [135] Economists broadly agree that NAFTA has benefited North American economies. Regional trade grew sharply in the first two decades of the treaty [PDF], from about $290 billion in 1993 to more than $1.1 trillion in 2016. Cross-border investment also increased, with U.S. stocks of foreign direct investment (FDI) in Mexico rising from $15 billion to more than $100 billion over that period. But experts have also proven difficult to determine the direct impact of the deal from other factors, including rapid technological change and expanding trade with countries like China. .