North American Free Trade Agreement

Most economic analyses indicated that NAFTA was beneficial to the North American economies and the average citizen,[2][3][4] but harmed a small minority of workers in industries exposed to trade competition.

[13] As the two leaders began negotiating, the Canadian government under Prime Minister Brian Mulroney feared that the advantages Canada had gained through the Canada–US FTA would be undermined by a US–Mexican bilateral agreement, and asked to become a party to the US–Mexican talks.

[citation needed] After much consideration and emotional discussion, the U.S. House of Representatives passed the North American Free Trade Agreement Implementation Act on November 17, 1993, 234–200.

Focused on health and safety standards and on child labor law, it excluded issues of collective bargaining, and its "so-called [enforcement] teeth" were accessible only at the end of "a long and tortuous" disputes process".

[38] The Canadian anti-NAFTA coalition, Pro-Canada Network, suggested that guarantees of minimum standards would be "meaningless" without "broad democratic reforms in the [Mexican] courts, the unions, and the government".

[42] Later assessment, however, did suggest that NAALC's principles and complaint mechanisms did "create new space for advocates to build coalitions and take concrete action to articulate challenges to the status quo and advance workers’ interests".

[clarification needed] NAFTA established the CANAMEX Corridor for road transport between Canada and Mexico, also proposed for use by rail, pipeline, and fiber optic telecommunications infrastructure.

[45] This chapter has been criticized by groups in the United States,[46] Mexico,[47] and Canada[48] for a variety of reasons, including not taking into account important social and environmental[49] considerations.

Methanex claimed that a California ban on methyl tert-butyl ether (MTBE), a substance that had found its way into many wells in the state, was hurtful to the corporation's sales of methanol.

[60] According to a 2004 article by University of Toronto economist Daniel Trefler, NAFTA produced a significant net benefit to Canada in 2003, with long-term productivity increasing by up to 15 percent in industries that experienced the deepest tariff cuts.

[61] While the contraction of low-productivity plants reduced employment (up to 12 percent of existing positions), these job losses lasted less than a decade; overall, unemployment in Canada has fallen since the passage of the act.

National Bureau of Economic Research found that NAFTA increased the wage gap between the lowest and highest earners, directly affecting wealth inequality.

GTW concluded that "inflation-adjusted wages for virtually every category of Mexican worker decreased over NAFTA’s first six years, even as hundreds of thousands of manufacturing jobs were being shifted from the United States to Mexico".

[84] Three quarters of the imports and exports are with the U.S. Tufts University political scientist Daniel W. Drezner argued that NAFTA made it easier for Mexico to transform to a real democracy and become a country that views itself as North American.

[88] In 2015, the Congressional Research Service concluded that the "net overall effect of NAFTA on the US economy appears to have been relatively modest, primarily because trade with Canada and Mexico accounts for a small percentage of US GDP.

In a 2015 report, the Congressional Research Service summarized multiple studies as follows: "In reality, NAFTA did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters.

[107] According to the Department of Homeland Security Yearbook of Immigration Statistics, during fiscal year 2006 (October 2005 – September 2006), 73,880 foreign professionals (64,633 Canadians and 9,247 Mexicans) were admitted into the United States for temporary employment under NAFTA (i.e., in the TN status).

[124] In a 60 Minutes interview in September 2015, 2016 presidential candidate Donald Trump called NAFTA "the single worst trade deal ever approved in [the United States]",[125] and said that if elected, he would "either renegotiate it, or we will break it".

[126][127] Juan Pablo Castañón [es], president of the trade group Consejo Coordinador Empresarial, expressed concern about renegotiation and the willingness to focus on the car industry.

[128] The Washington Post noted that a Congressional Research Service review of academic literature concluded that the "net overall effect of NAFTA on the U.S. economy appears to have been relatively modest, primarily because trade with Canada and Mexico accounts for a small percentage of U.S.

"[135] Additional concerns expressed by the US Trade Representative over subsidized state-owned enterprises and currency manipulation were not thought to apply to Canada and Mexico, but were intended rather to send a message to countries beyond North America.

Kansas is a major agricultural exporter, and farm groups warned that just threatening to leave NAFTA might cause buyers to minimize uncertainty by seeking out non-US sources.

Canadian Prime Minister Justin Trudeau met with the House Ways and Means Committee, since Congress would have to pass legislation rolling back the treaty's provisions if Trump tries to withdraw from the pact.

[141][142] According to an August 30 article in The Economist, Mexico agreed to increase the rules of origin threshold which would mean that 75% as opposed to the previous 62.5% of a vehicle's components must be made in North America to avoid tariffs.

[145] Freeland returned from her European diplomatic tour early, cancelling a planned visit to Ukraine, to participate in NAFTA negotiations in Washington, D.C. in late August.

[146] According to an August 31 Canadian Press published in the Ottawa Citizen, key issues under debate included supply management, Chapter 19, pharmaceuticals, cultural exemption, the sunset clause, and de minimis thresholds.

[9][154] According to Tufts University political scientist Daniel W. Drezner, the Trump administration's desire to return relations with Mexico to the pre-NAFTA era are misguided.

At the very least, US-Mexico relations would worsen, with adverse implications for cooperation on border security, counterterrorism, drug-war operations, deportations and managing Central American migration.

[85] According to Chad P. Bown (senior fellow at the Peterson Institute for International Economics), "a renegotiated NAFTA that would reestablish trade barriers is unlikely to help workers who lost their jobs—regardless of the cause—take advantage of new employment opportunities".

[155] According to Harvard economist Marc Melitz, "recent research estimates that the repeal of NAFTA would not increase car production in the United States".

NAFTA GDP – 2012: IMF – World Economic Outlook Databases (October 2013)
Back row, left to right: Mexican President Carlos Salinas de Gortari , U.S. President George H. W. Bush , and Canadian Prime Minister Brian Mulroney , at the initialing of the draft North American Free Trade Agreement in October 1992. In front are Mexican Secretary of Commerce and Industrial Development Jaime Serra Puche , United States Trade Representative Carla Hills , and Canadian Minister of International Trade Michael Wilson .
Obama, Peña Nieto and Harper at the IX North American Leaders' Summit (informally known as the Three Amigos Summit ) in Toluca
Former President Enrique Peña Nieto with Prime Minister Justin Trudeau of Canada and then-President Barack Obama of the United States at the 2016 North American Leaders' Summit