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NAFTA: free trade agreement
Sofiia Liubnytska
Created on September 21, 2023
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Transcript
International Trade: Sofiia Liubnytska
START
Free trade agreement
NAFTA
09 · Interaction
08 · Webgraphy
07 · The influence to people, companies and trades
06 · Criticism
05 · Features
04 · When and by whom
03 · Main objective
02 · Definition
01 · Context
the structure of content
INDEX
To generate a liberalized trade agreement among Mexico, Canada, and the U.S.: When Bush became president, he began to negotiate with Mexican President Carlos Salinas de Gortari
Canadian Prime Minister Brian Mulroney supported the president, and after it went into effect on January 1, 1989 and remained in force until NAFTA replaced it.
The act gave enhanced "fast-track" authority to negotiate bilateral free trade agreements, streamlining negotiations.
NEGOTIATIONS
THE CANADA-U.S. FREE TRADE of 1989
THE TRADE and TARIFF ACT of 1984
The issue started with a President Ronald Reagan, who in his presidential campaign of 1980 proposed a North American common market. At that point, Europe’s common market, known as the European Economic Community, had already been initiated with the Treaty of Rome in 1957.
01 · Context
02 · Definition
NAFTA stands for the North American Free Trade AgreementIt was initially created as a way to open up free trade in between the U.S., Canada, and Mexico to help lower costs of trade and strengthen North American trade. The agreement eliminated trade barriers between the three countries, and almost all tariffs and taxes on imports and exports.
03 · Main objective
eliminate barriers to trade, promote conditions of fair competition, increase investment opportunities, provide adequate protection for intellectual property rights, establish effective procedures for the implementation and application of the Agreement and for the resolution of disputes and to further trilateral, regional and multilateral cooperation.
According to the official three-nation summary of the agreement, NAFTA's main objectives are to:
The agreement went into effect on January 1, 1994.
President Bill Clinton signed it on December 8, 1993.
The agreement was signed by Bush and his Canadian and Mexican counterparts, Mulroney and Salinas in 1992. The European Union had been created by the Treaty of Maastricht earlier that year. Despite being a joint effort, NAFTA was considered one of Clinton's first victories as president.
04 · When and by whom
After U.S. President Donald Trump took office in January 2017, he sought to replace NAFTA with a new agreement, beginning negotiations with Canada and Mexico. In September 2018, the United States, Mexico, and Canada reached an agreement to replace NAFTA with the United States–Mexico–Canada Agreement (USMCA). NAFTA remained in force until USMCA took effect on July 1, 2020, replacing NAFTA. The new law involved only small changes.
04 · When and by whom
Trade dispute resolution
Protection of intellectual property rights
Supplemental agreements
Elimination of non-tariff barriers
Establishment of standards
05 · Features
Tariff elimination for qualifying goods
One of the criticisms of NAFTA centers on the destruction of American jobs. The agreement affected thousands of American workers after US companies relocated their manufacturing facilities to Mexico to take advantage of the lower wages and relaxed worker health and safety regulations. Is also thought that NAFTA input undue stress on small farmers and business owners who simply couldn't not compete with larger factories. In addition, according to the critics, the agreement led to environmental degradation due to the rapid industrialization in Mexico.
06 · Criticism
Most economic analyses indicated that NAFTA was beneficial to the North American economies and the average citizen, but really harmed a small minority of workers in industries exposed to trade competition. Economists held that withdrawing from NAFTA or renegotiating NAFTA in a way that reestablished trade barriers would have adversely affected the U.S. economy and cost jobs. However, Mexico would have been much more severely affected by job loss and reduction of economic growth in both the short term and long term.
07 · Influence
06 · https://www.ciesin.org/TG/PI/TRADE/nafta.html#:~:text=NAFTA's%20main%20objectives%2C%20according%20to,effective%20procedures%20for%20the%20implementation
05 · https://corporatefinanceinstitute.com/resources/economics/north-american-free-trade-agreement-nafta/
04 · https://www.thebalancemoney.com/history-of-nafta-3306272
03 · https://www.thestreet.com/politics/nafta-north-american-free-trade-agreement-14651970
02 · https://www.investopedia.com/terms/n/nafta.asp
01 · https://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement
content sources
08 · Webgraphy
09 · Interaction
Do you think the NAFTA agreement it is more beneficial or not?
Often, NAFTA gets blamed for developments that are not directly its fault, or that may have happened anyway. In a sense, NAFTA stands as a symbol for globalization and free trade. So views and analyses of it are often projected through the lens of opinion about these subjects in general.
Thank you for attention!
Apart from the elimination of tariffs, the signatories of NAFTA agreed to streamline border processing and licensing requirements and reduce the waiting time for goods clearance. Member countries agreed to open up their border and interior to other members to ease trading activities.
3. Elimination of non-tariff barriers
The first agreement was the North American Agreement on Labor Cooperation (NAALC) that protected factory workers from potential job losses. The second agreement was the North American Agreement on Environmental Cooperation (NAAEC). The NAAEC was signed to address environmental concerns by environmentalists on the potential impacts of rapid industrialization in Mexico due to its lack of experience in enforcing environmental regulations.
4. Supplemental agreements
Actual impact of the agreement is hard to isolate, especially from the lingering effects of the 2007-09 Great Recession, and other significant economic, technological, and industrial trends that have occurred on the continent and globally in the past quarter-century.
Before NAFTA, goods exported to Mexico attracted tariffs of 30% or higher, with US-produced goods being charged higher tariffs than the duties imposed on Mexican goods exported to the United States. Imports from participating countries were given the “Favored Nation” status, which banned any states or provincial governments from imposing tariffs on such goods. The agreement ensured duty-free access to a vast number of areas, such as construction, engineering, manufactured goods, consulting, health care management, accounting, etc.
1. Tariff elimination for qualifying goods
The signatories of NAFTA also recommended putting in place standards on health, safety, and industry. The members also agreed to increase the speed of export-product inspections and certifications at the border and eliminate the use of national standards as a barrier to trade. The agreement also provided administrative, civil, and criminal penalties that would be imposed on businesses that violated any of the agreed custom procedures and standards requirements.
2. Establishment of standards
The trade agreement provided rules for resolving trade disputes between investors, businesses, and participating countries. The agreement required traders to promote fair competition and uphold all regulations of the treaty. The NAFTA Secretariat is tasked with taking measures to resolve disputes between businesses.
6. Trade dispute resolution
NAFTA also included provisions that increased protection of intellectual property rights, such as computer software and chemical production. Participating countries agreed to enforce rules that would protect the intellectual property rights of other members and take punitive measures against industrial theft.