Question

What do you know about NAFTA? Use the internet to gather some information about NAFTA and why and when it was started. Do you think NAFTA has been successful in its objectives? Why or why not? Make sure you clearly state the source of your information.

Answer 1

The North American Free Trade Agreement's purpose is to reduce trading costs, increase business investment, and help North America be more competitive in the global marketplace. The agreement is between Canada, the United States, and Mexico

History

President Ronald Reagan proposed a North American common market in his 1980 presidential campaign. Europe's common market, dubbed the European Economic Community, had already been initiated with the Treaty of Rome.

In 1984, Congress passed the Trade and Tariff Act, which itself built upon and amended a prior Trade Act of 1974. The 1984 gave enhanced "fast-track" authority to negotiate bilateral free trade agreements, streamlining negotiations.

In 1985, Canadian Prime Minister Mulroney agreed to begin discussions for the Canada-U.S. Free Trade Agreement. Negotiations began in 1986 and it was signed 1988. It went into effect on January 1, 1989, and remained in force until NAFTA replaced it.

In 1990, Mexican President Carlos Salinas de Gortari requested a free trade agreement with the U.S. In 1991, Reagan’s successor, President George H.W. Bush, began negotiations with President Salinas for a liberalized trade agreement between the two countries. Before NAFTA, Mexican tariffs on U.S. imports were much higherthan U.S. tariffs on Mexican imports. Canada also joined the discussions.

In 1992, NAFTA was signed by outgoing President George H.W. Bush, Mexican President Salinas, and Canadian Prime Minister Brian Mulroney. Earlier that year, the European Union had been created by the Treaty of Maastricht.

Concerns about the liberalization of labor and environmental regulations led to the adoption of two addendums. NAFTA was ratified by the legislatures of the three countries in 1993. The U.S. House of Representatives approved it by 234 to 200 on November 17, 1993. The U.S. Senate approved it by 61 to 38 three days later.

President Bill Clinton signed it into law on December 8, 1993. It entered into force on January 1, 1994.

Purpose

Article 102 of the NAFTA agreement outlines its purpose. There are seven specific goals.

1. Grant the signatories most-favored-nation status.
2. Eliminate barriers to trade and facilitate the cross-border movement of goods and services.
3. Promote conditions of fair competition.
4. Increase investment opportunities.
5. Provide protection and enforcement of intellectual property rights.
6. Create procedures for the resolution of trade disputes.
7. Establish a framework for further trilateral, regional, and multilateral cooperation to expand the trade agreement's benefits.

NAFTA Fulfilled Its Purpose

NAFTA fulfilled all seven of its goals, establishing the region world’s largest free tradezone in terms of gross domestic product. It increased investment in the three countries. Until the last of its changes came into effect in 2008, it lowered or eliminated tariffs between the three countries and allowed trade to triple. Most important, it increased the competitiveness of the three countries in the global marketplace.