United States Canada And Mexico Trade Agreement

When NAFTA negotiations began in 1991, the goal for all three countries was to integrate Mexico into the developed, high-income economies of the United States and Canada. The hope was that freer trade would bring stronger and more stable economic growth to Mexico by providing new jobs and opportunities for its growing workforce and discouraging illegal immigration. For the United States and Canada, Mexico has been seen as both a promising export market and a less expensive investment site that can improve the competitiveness of U.S. and Canadian businesses. Canada and the United States have also agreed on strict rules to ensure fair and transparent management of tariff quotas to ensure that distributors can use them fully. Much of the debate among political experts has focused on how to mitigate the negative effects of agreements such as NAFTA, including whether workers who lose their jobs are compensated or whether they are offering retraining programs to help them move into new sectors. Experts say programs such as U.S. Trade Adjustment Assistance (AAT), which helps workers pay for education or training to find new jobs, could help rebuke anger over trade liberalization. The Chapter on Technical Barriers to Trade (CTA) is an important assessment of NAFTA. It includes standards, technical regulations and compliance assessment procedures (product evaluation to ensure they meet requirements) that may affect exchanges between the parties. Edward Alden of CFR says the fear of trade deals has increased because wages have not kept pace with labour productivity, while income inequality has increased.

To some extent, he says, trade agreements have accelerated the pace of these changes because they have “strengthened the globalization of the U.S. economy.” NAFTA has boosted Mexican agricultural exports to the United States, which have tripled since the pact was implemented. Hundreds of thousands of jobs in the automotive industry have also been created in the country and most studies [PDF] have found that the agreement has increased productivity and reduced consumer prices in Mexico.