Discussion Board

The North American Free Trade Agreement (NAFTA), is a trade partnership between Canada, United States and Mexico. This agreement was negotiated by George H.W Bush’s administration and in Dec. 17, 1992, but it came into force on Jan. 11994.

The US has benefitted from NAFTA because of the cut import tariffs. However, the country has also suffered some localised losses as a result. Under NAFTA, it is a requirement that all the three countries must cut their imports to zero for all the manufactured goods which are traded between them. As a result, trade between these countries has considerably grown. Because of the three major global shifts which are taking place almost simultaneously, it is hard for Economists to pinpoint the exact effects of NAFTA. First, under NAFTA, the US enacted its tariff cuts on Mexican trade. Second, during the same period, China became a major exporting nation and technological advances greatly transformed how businesses operate.

 Despite the growing trade between the countries, NAFTA is being blamed for job losses in the U.S although it is not the leading cause. It is, however, important to note that, NAFTA created new employment opportunities. Nevertheless, President Donald Trump does not support NAFTA, and nobody the exact reason why. Countries that trade with each other always have a lot to fight about, but trade agreements always provide solutions to such disputes. Still, nobody knows what President Donald Trump finds irritating in NAFTA because trade skirmishes in the past do not seem to be informing his negotiation strategies.

From the beginning, it looked like everyone disliked some aspects of NAFTA. This started with NAALC being the first organization to address labour standards. After NAALC, then came the environmental groups however they failed to provide a means for litigation. It was only during the Obama administration that some of the concerns such as labour and environmental provisions were addressed. If the US decided to withdraw from NAFTA, other agreements like WTO would substitute a big chuck of what NAFTA included. Therefore, its an exaggeration to say that the withdrawing from NAFTA could cause a big impacts on either exports or imports in any of the members or change the trade deficit between US and Mexico. For Canada on the other hand they can go back to the zero tariffs with the US by retaining the granted agreements that was imposed during the CUSFTA years of 1989-1993.  


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