Question

Describe how trade agreements such as GATT and NAFTA have facilitated free and equitable trade among nations over the past 10 years.

Answer 1

The GATT has proven highly successful in setting down the rules for decades of global trade negotiations. Trade negotiations are never simple but they have been significantly encouraged by GATT. It explained that trade was increasing wealth and promoting win / win outcomes to benefit all participating nations GATT recognized that some sectoral trade could adversely affect powerful groups of domestic interest, such as producers and unions, and created effective provisions to address those concerns. Nations promulgated staff aid, transition assistance and special protections. Under the GATT, however, the guidelines concentrated on trade and not on other conflicts over international policy.

NAFTA changed everything by adopting two side agreements, one on employment and the other on environmental policy. In American politics, labor and environmental groups had become increasingly potent. Both recognised that trade was becoming an important factor of global economic integration, and tried to piggy-back their global agendas. Many U.S. supporters of free trade, with no experience in these non-trade fields, supported NAFTA with its side-agreements, seeing little danger in widening the treaty policy agenda and believing it would encourage the passage.

Less powerful nations may be under pressure to accept expensive environmental rules to gain access to American markets, although those rules may be far less appropriate for developing nations. But America's massive weight in world trade offers a platform for economic hegemony for U.S. special interest groups and regulators. That can lead in effect to new forms of protectionism.

GATT had succeeded, but many in the U.S. and other developed countries were trying to combine trade deals with other international agreements covering a wide range of topics, including economic, social, human rights, and many more. Under GATT, trade deals had offered the labor and environmental interest groups little opportunity to promote their agendas. Through other international treaty agreements focused on specific subjects, such as the United Nations Environment Program and the International Labor Organization, they may pursue their policy objectives.