NAFTA

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The North American Free Trade Agreement (NAFTA) was signed by President Clinton in late 1993, and came into effect on January 1st 1994. The agreement was ratified by Canada and Mexico in December 1992. NAFTA's goal is to eliminate trading barriers between the three nations involved in it: Canada, Mexico, and the US. It did this by lowering tariffs, allowing for freer trade between the three nations.


One of the initial concerns for NAFTA was its environmental impact. Mexico's position as a developing country concerned many and led some to believe that the increase in trade between Mexico and the US and Canada would lead to pollution in those countries. To combat this concern, a side agreement, known as the North American Agreement on Environmental Cooperation (NAAEC) was signed, which eventually transformed into the Commission for Environmental Cooperation (CEC).

Another controversial aspect of the agreement was its section on agriculture. The agricultural agreements were negotiated separately between each pair of countries. The US-Canada agreement impose higher tariffs and stricter quotas than the US-Mexico agreement, which provided for greater liberalization.

In addition to some changes to intellectual property laws, NAFTA established the CANAMEX corridor. This was a series of improvements made to highways and railways in order to connect Canada and Mexico through the United States. This road connection solidifies NAFTA's feasibility and establishes a more convenient form for Mexico to trade with Canada.

Recently, NAFTA has come under criticism, with its opponents claiming that it has led to a loss of manufacturing jobs within the United States. Critics cite lower wages within the US and a destabilization of Mexico's rural industries. Nonetheless, as a result of NAFTA, trade between the member countries tripled, and foreign investments quadrupled. While it is hard to say definitively whether NAFTA has benefited the United States, current trends suggest that while it is an incomplete solution, it has provided valuable benefits for all member countries.

The CANAMEX Trade Corridor (Red), stretching from Alaska to Mexico City

https://www.fas.usda.gov/topics/nafta
https://www.cbp.gov/trade/nafta
http://www.cec.org/about-us/NAAEC
http://www.canamex.org/
http://www.nytimes.com/2012/12/07/us/twenty-years-later-nafta-remains-a-source-of-tension.html