One of the most impacting agreements involving the concept of free trade and the United States is the North American Free Trade Agreement (NAFTA). Including the United States, Canada, and Mexico, this agreement began on January 1, 1994 and has been 14 years in the making.
As outlined in chapter one of NAFTA, the official objectives of the agreement are to:
a) eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories of the Parties;
b) promote conditions of fair competition in the free trade area;
c) increase substantially investment opportunities in the territories of the Parties;
d) provide adequate and effective protection and enforcement of intellectual property rights in each Party's territory;
e) create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes; and
f) establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement.
Subsequently, other core concepts and goals are improving employment within the USA, Canada, and Mexico, promoting the development of value manufacturing, enhancing USA, Canada, and Mexico’s competitiveness in global markets and doing so in a way that will protect environmental and labor rights.
Other key NAFTA provisions as cited by the Foreign Agricultural Service include “sanitary and phytosanitary measures” to protect human, animal, and plant life health from risks contributed to plant or animal pests or diseases, allowing export subsidies to be used under specific conditions, implementing “domestic support policies” that counteract negative effects on the countries domestic markets due to trade or production changes, implementing bilateral “grade and quality standards” that ensure equal grading, classification, and marketing to both domestic as well as foreign products, and lastly aiding policies on bulk commodities, citrus and dairy products, vegetable oils, sugar, and peanut products.
Three committees help with policy implementation and mediation aid NAFTA. The “NAFTA Committee on Agricultural Trade” monitors and promotes cooperation on the implementation and administration of the agricultural provisions. The “NAFTA Committee on Sanitary and Phytosanitary Measures” promotes harmonized policy implementation and facilitates technological cooperation between nations. The “NAFTA Committee on Private Commercial Disputes Ragarding Agricultural Goods” helps mediate disputes between the three nations regarding transactions in agricultural goods.
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NAFTA is perhaps the greatest example of how America no longer believes in isolationism or protectionist ideologies such as it once did in response to the great depression. Even though history have shown us a new form of economic development is needed, many strongly oppose NAFTA and any similar agreement the US is involved in. Perhaps the best way to summaries this feeling of indifference towards NAFTA is the six fears/myths cited by the Office of the United States Trade Representatives. These include reasons such as:
1.NAFTA is costing the U.S. jobs;
2. NAFTA hurts the US manufacturing base;
3. NAFTA has suppressed US wages;
4. NAFTA has and will not deliver benefits to US agriculture;
5. NAFTA has done nothing to improve the environment as promised;
6. NAFTA has not delivered benefits to the U.S. agriculture.
The following excerpt is from a letter written by the U.S. secretary of Commerce Carlos M. Gutierrez which was published in the Washington post march 1st, 2008 titled “Stop Hating on NAFTA.” He makes multiple comparisons between the 14 years prior to NAFTA and the 14 years since NAFTA’s implementation in order to refute many fears and claims against NAFTA.
“Since 1993, our economy has grown 54 percent and more than 25 million net jobs have been created. In the 14 years before NAFTA, our nation's average unemployment rate was 7.1 percent. From 1994 to 2007, the average was 5.1 percent. U.S. manufacturing has grown at nearly 4 percent annually since NAFTA was enacted, nearly double that of the previous 14 years…. Trade plays a significant role in our nation's economic growth, contributing 26 percent of the increase in real gross domestic product last year. NAFTA also accounted for a third of our overall goods exports in 2007. This trade benefits American workers who make the products we send abroad, American farmers who grow the agricultural exports, and American families and consumers who have more choices in our stores…..Withdrawing from NAFTA would destroy economies in U.S. border communities, hurt U.S. farmers, rip apart North American supply chains and information systems, and devastate large and small exporters….”
Overall, NAFTA appears as though it will have a significant impact on these upcoming elections as the agreement affects millions of citizen with low and middle wage jobs across America and in many swing states. In a recent poll by USA Today the economy was voted as the number one issue in terms of selecting a presidential candidate. If Secretary Gutierrez is accurate in saying NAFTA accounts for a third of the U.S. economy, then I expect this agreement to come up many times in the upcoming election this November 4th.
-Kyle W. Gay
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