What Was The Main Purpose Of The North American Free Trade Agreement (Nafta)

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There is not much that can remain relevant for long periods of time – trade agreements must be constantly renegotiated to remain relevant over time. There is always room for improvement in any legislation, especially at a time when technology is moving as fast as it is. Imports from participating countries have been granted „receiving nation“ status, prohibiting all states or provincial governments from imposing tariffs on these goods. The agreement guaranteed duty-free access to a wide range of sectors such as construction, mechanical engineering, industrial goods, consulting, health management, accounting, etc. The creation of a framework for trilateral, regional and multilateral cooperation to expand and enhance the benefits of this agreement. In June 1990, Mexican President Carlos Salinas de Gortari called for a free trade agreement with the United States. In September 1990, Reagan`s successor, President George H.W. Bush, began negotiations with President Salinas for a liberalized trade agreement between Mexico, Canada and the United States to remove barriers to trade in goods and services between the parties` territories and facilitate the cross-border movement of goods and services. The highly organized opposition to NAFTA has focused on the fear that the removal of trade barriers will encourage U.S. companies to get carried away and settle in Mexico to use cheap labour. This concern increased in the early years of the 2000s, when the economy experienced a recession and the subsequent recovery turned out to be a „recovery in unemployment“. Opposition to NAFTA was also strong among environmental groups, who said that the anti-pollution elements in the treaty were woefully inadequate.

This criticism has not wavered since the implementation of NAFTA. In fact, Mexico and Canada have been cited on several occasions for environmental infidelities. The United States had a trade surplus with NAFTA countries of $28.3 billion for services in 2009 and a trade deficit of $94.6 billion (36.4% per year) in 2010. This trade deficit represented 26.8% of the total U.S. trade deficit. [89] A 2018 study on international trade published by the Center for International Relations identified irregularities in NAFTA trade patterns using network theory analysis techniques. The study showed that the U.S. trade balance was influenced by the potential for tax evasion in Ireland.

[90] In 2008, Canadian exports to the United States and Mexico totaled $381.3 billion and imports totaled $245.1 billion. [59] According to a 2004 paper by University of Toronto economist Daniel Trefler, NAFTA provided Canada with a significant net benefit in 2003, with long-term productivity increasing by up to 15 per cent in the sectors that experienced the largest tariff reductions. [60] While the decline in low-productivity jobs has reduced employment (up to 12 per cent of existing jobs), these job losses have lasted less than a decade; Overall, unemployment has declined in Canada since the legislation was passed. Trefler commented on the compromise, saying that the crucial trade policy issue was „how free trade can be implemented in an industrialized economy so that the long-term benefits and short-term adjustment costs borne by workers and others are recognized.“ [61] Although the heads of state or government of the three countries have signed the agreement, it will not enter into force until the governments of the three countries have adopted it.