Workings of North American Free Trade Agreement

NAFTA

Historical Beginning of NAFTA (with specific bibliography)

NAFTA Objectives

What is NAFTA

The Promise of NAFTA

NAFTA Provisions

Structure of NAFTA

Years of NAFTA (NAFTA not enough, other plus and minuses)..

Environmental Issues

Comparative Statements (Debate)

NAFTA – Broken Promises

NAFTA – Fact Sheet Based Assessment

NAFTA & Food Regulation

NAFTA – The Road Ahead

NAFTA in Numbers

Goal Fulfillment

Major Milestones

Consolidated Bibliography

This study set out to examine the inner workings of the North American Free Trade Agreement. The aim of this study is to assess whether the NAFTA agreement is viable, and whether it has achieved the goals that it set out to accomplish. For purposes of this study, objective information was gathered to assess many different aspects of the NAFTA agreement, including but not limited to the following: History, Structure, Provisions, Issues, Statements and Milestones.

Purpose of Study

The purpose and aim of this study was to achieve an unbiased analysis regarding NAFTA and assess whether or not NAFTA has achieved its goals and objectives. More than 200 resources will be examined for purposes of this study.

Historical Beginning

In order to truly grasp the full impact of NAFTA and its objectives, we need to first study, examine and understand the history of GATT to get a clear perspective on the need and emergence of NAFTA.

The well being of any country has long been contingent upon its ability to maintain and establish international trade; this fact has long been recognized. Countries are in contention however, the degree of openness of the economy to the penetration of foreign goods and services. During the 1700’s a majority of people held the belief that trade existed in a “dog-eat-dog” world. The conventional wisdom of Mercantilism suggested that a country could gain related to trade only at the expense of its rivals. It also supported the notion that a country could grow rich as a result of the amount of gold that it amassed via sale of domestically produced goods to foreigners, while at the same time constraining the amount of foreign products that would be sold in the domestic market. Protecting the domestic market was held to be a sacrosanct belief.

The mercantilist view of trade was challenged later during the 1800s, primarily by theorists such as David Ricardo and Adam Smith, who argued that international trade could benefit both domestic partners and foreign associates. Trade could in essence become a “win-win” situation. For this to happen, two conditions must be present::

All countries involved must specialize by producing and subsequently selling the goods that it was able to using the most efficient methods relative to the capabilities of other countries, a theory referred to as the law of comparative advantage, somewhat similar to an international division of labor;

Countries must agree to a free, unregulated flow of goods between countries, creating a sort of international “laissez faire” state of existence.

In 1846 in Britain, the idea and belief in the “economic and moral rightness” of Free trade became a kind of national dogma. The free trade idealism took some time to reach America. For a long time the U.S. governing class held on hard to the idea of protectionism. The idea of protectionism was even more pronounced when Alexander Hamilton drafted his Report on the Manufacturers, which called for protection of infant industries operating throughout the nation. This idea was present in the Smoot-Hawley Act of 1930, which raised tariff rates in the U.S. By as much as 50% between the years of 1929 and 1932.

During the 1930s the great depression brought convergence on trade issues across the Atlantic. Reassessment, realignment and restructuring of many economies followed, resulting in tariff wars that were in fact destructive to all concerned.

A new model for operation was subsequently ushered in during the Post World War II ear. During the Bretton Woods Conference, and International Monetary Fund was created in an effort to oversee international monetary and exchange rate systems.

Finally during 1946, the General Agreement on Trade and Tariff was created at the first session of the Preparatory Committee of UN Conference on Trade and Employment. Referred to as GATT, its initial purpose was primarily to negotiate “tariff concessions” among countries that were members. GATT also set out to establish a code for conducting business among members. This code of conduct included development of a set of procedures that were to be used for resolving trade disputes via negotiations; successive negotiations were referred to as rounds.

Nondiscrimination and multilateralism in international trade were among the principles that GATT was founded on. By this convention “if the tariff on imports from one country is decreased, the tariff on all imports of the same goods from other GATT members must be reduced.”

Many factors and circumstances led up to the creation of NAFTA. Many have suggested that the most important factor was the decline in U.S. international competitiveness. Part of the U.S. decline was due to the rise of Japan as a serious rival within the U.S. domestic as well as the global marketplace.

Multilateralism, favored not only U.S. corporations during the 1950s and 1960s, but also foreign rivals. The U.S. faced competition from corporations across the globe due to free trade. The primary competition came from the revitalized economies of Western Europe and Japan. The U.S. In fact discovered that it was losing out in certain industries it had relied upon in the past, including the following: cars, consumer electronics, textiles and apparel. The U.S. still was maintaining its edge however in non-traditional areas including high technology, pharmaceutical as well as communication systems.

During this time the U.S. sought out ways to ensure a competitive edge in part by promoting the expansion of GATT rule into areas defined as non-traditional. The U.S. also aspired to “stem the hemorrhage” traditional areas of comparative advantage. This was accomplished by emphasizing the idea of creating a “level playing field,” supporting notions of “fairness” and reciprocity through managed trade, as well as ending European subsidies on agriculture. It was also dissatisfied with the GATT’s dispute resolutions process. The U.S. encountered stiff resistance from the members of GATT. Most developing countries and quite a number of developed countries balked and the process stalled.

At the same time the U.S. was seeking ways to ensure a competitive advantage, Latin American countries were faced with a plethora of external debts. The economy in Latin America was suffering severely due to this. A majority of the debts owed were to American banks. In order to resolve the situation, an infusion of new money would be required. A second consideration, to manage the debt crisis countries in debts might be required to restructure their economies along the lines of U.S. policy dictations. Among the prescription dictated by the U.S. included elimination of fetters on the free market and privatization of areas of the economy which previously resided under public control, thus eliminating any restrictions on public investment.

Given this background the interests of the U.S., faced with difficulty negotiating the Uruguay round of GATT and competition from Japan and other Asian countries, as well as the consolidation of the European single market, concluded that it was time “to exploit for ourselves our own market.” Thus the U.S. started to look toward Canada, Mexico and Latin America..

Thus, NAFTA was negotiated and approved with bipartisan support in the U.S. President Reagan in 1980 proposed a “North American Accord.” Following this, in the mid 1980s President de la Madrid began a dramatic opening of the Mexican economy leading to Mexico’s accession to the General Agreement on Tariffs and Trade (GATT) in 1987. President Bush subsequently took on negotiations that were intended to lock in the trade investment liberalization. President Clinton subsequently supported this agreement.

In the meantime, the U.S., Canada, and Mexico were facing many “trans-border” problems that were environmentally based, including the following: air and water pollution and disposal of hazardous wastes

During President Reagan’s campaign in 1980, NAFTA was approved in the U.S. Following this in the mid-1980s the Mexican economy began opening, which as discussed led to Mexico’s accession of GATT in 1987.

NAFTA in its early stages was a topic much debated, especially among the U.S., Canada and Mexico. President George Bush in the United States played a major role in drafting the agreement, and his successor, President Bill Clinton helped promote and implement NAFTA thereafter. There are many who opposed NAFTA, believing it would cost Americans jobs and take advantage of deregulated markets. Others believed that acceptance of NAFTA would result in human rights abuses. Advocates of NAFTA however, argued that the implementation of the agreement would ultimate help regulate not only trade but also environmental issues such as pollution along the borders

Another Point-of-View

Many argue that NAFT was built on the Canadian-U.S. Free Trade area, or (CUSTA).

In brief, CUSTA may be defined by the following criteria:

1. It was formed on January 1, 1989

2. Within 10 years, a majority of tariff and quantity trade restrictions were removed.

3. A panel of experts was utilized to handle disputes.

The creation of CUSTA sparked interest from Mexico. The free trading area or FTA spanned greater than 360 million people, and $6 trillion in annual output. NAFTA may also be considered a link to two of the largest trading partners to the U.S.: namely Mexico and Canada.

History Bibliography:

Mariama W. Williams, A Brief History of GATT and NAFTA; Women’s Alternative Economic Network

Gary C. Hufbauer, Reginald Jones Senior Fellow and Diana Orejas, NAFTA AND THE ENVIRONMENT: LESSONS FOR TRADE POLICY, Institute for International Economics (2001)

Daryll E. Ray, Director, Agricultural Policy Analysis Center Melissa B. Cooney, NAFTA and the Small Mexican Farmer, Graduate Research Assistant University of Tennessee

US-Mexico Chamber of Commerce.

NAFTA Objectives

NAFTA was created with many objectives and goals in mind. Primarily, through national treatment measures and a “most-favored-nation” agreement, the goals and objectives of NAFTA included the following:

Facilitation of cross-border movement of goods and services between countries, and the elimination of barriers to trade in foreign parties.

Promotion of free and fair competition among territories

Advancement of investment opportunities among parties

Provide for the protection of and enforcement of intellectual property rights within the territories of each unique party

Creation of procedures that would enable implementation of the Agreement, as well as provisions for the administration of agreement and for the resolution of disputes.

Establishment of a multilateral and regional cooperation that would enhance the benefits of the agreement.

Though the primary goals of NAFTA might be described as focused toward tariff reduction, the goals and aims went above and beyond this.

NAFTA also aspired to open sectors within agriculture, energy, textiles and the automotive industry that had been previously protected. It also opened up the U.S. Mexico border so that trade in services could occur, particularly in the areas of finance, transportation and telecommunications. NAFTA also established rules regulating the procurement of intellectual property rights by government officials. Safeguards were established which dictated how subsidies and unfair practices should be dealt with. Additionally, procedures were set up that described how private and agricultural disputes should be handled. Processes were also established dictating how implementation concerns related to NAFTA should be handled.

Source:U.S.-Mexico Chamber of Commerce)

Broad in scope, NAFTA incorporates many disciplines. Not solely focusing on eliminating tariffs on North American made goods, NAFTA also set out to accomplish the following:

Eliminate or at minimum institute strict rules on many non-tariff barriers

Eliminate restrictions on foreign investment so that non-discriminatory treatment can be realized for local companies in NAFTA countries owned by other investors

Regarding non-tariff barriers to trade, eliminate or impose strict rules such that negotiations can occur

Enables government purchasing regimes to firms in all three countries;

Ensure non-discriminatory treatment of local companies owned by investors in NAFTA countries, and eliminate foreign investment restrictions

Reduce or eliminate other barriers that exist that might prevent service companies from operating in and across U.S. borders

Prevent governments from utilizing monopolies to restrict trade by instituting strict rules

Enable border-crossing between all three countries for business personnel

Establishment of distinct dispute resolution mechanisms and comprehensive set of rules regarding intellectual property rights

The NAFTA and its agreements provide a “comprehensive framework of rules that seek to reduce or eliminate trade barriers while promoting worker rights and enhancing environment protection across North America”

Source: NAFTA, Benjamin Franklin Library, U.S. Embassy, Mexico)

What is NAFTA?

The North American Free Trade Agreement (NAFTA) is a comprehensive arrangement between the U.S., Mexico and Canada that calls for the reduction of tariffs, custom duties and any other trade barriers on goods and services via a comprehensive set of rules and regulations. Canada represents the first largest trading partner with the United States with Mexico falling into the number three spot respectively. The implementation of NAFTA resulted in creation of the “largest free-trade zone” globally. Part of NAFTAs goals included a desire to improve access to all markets and remove restrictions on investment. NAFTA also seeks to protect intellectual property rights and allows provisions for monitoring and investigation of environmental and labor abuses among and between the three countries involved.

NAFTA is a comprehensive rules-based agreement among the United States, Canada, and Mexico that took effect January 1, 1994. Signed by the governments of the three countries in 1992 and ratified in the U.S. Congress in November of 1993, NAFTA eliminated a majority of tariffs posing barriers to trade, while at the same time causing other tariffs to fall to zero over a period of between five and fifteen years. The agreement in essence broadened the scope of a 1989 free trade agreement made between the U.S. And Canada.

NAFTA is far reaching in its endeavors; it goes beyond simply the borders of Canada, Mexico and the U.S.; rather NAFTA provides a standard of market openness that provided implications for trade relations among many countries in the Western Hemisphere including Latin America and the Caribbean. Latin America and the Caribbean Basin in fact are currently among the fastest growing U.S. export markets. These two regions represent diversified commercial opportunities for U.S. businesses. NAFTA has resulted in a reduction in trade barriers in Latin America, however reform is still generally still lagging far behind the “standard” NAFTA intended to create. Among the countries still needing reform measures include Chile, and a group of countries referred to as MERCOSUR (Uruguay, Paraguay, Argentian and Brazil).

NAFTA provides provisions under which the U.S., Canada and Mexico can become a single, integrated market. This market would consists of more than 400 million people, and trade would encompass greater than 6.5 trillion dollars worth of goods, products and services each year.

Mexico is the world’s second largest importer of U.S. manufactured goods and the third largest importer of U.S. agricultural products.

Mexico is an important partner in the NAFTA agreement. Mexico in fact is globally considered the second largest importer of U.S. manufactured goods. It is also the third largest importer of agricultural products from the U.S. Before NAFTA was created, tariffs in Mexico on average reached rates as high as 250% compared to U.S. duties. The NAFTA pact however, eliminated a majority of these tariffs. Alternatively, the U.S. And Canada had a long standing free trade agreement from 1989 onward.

Important to know also is that NAFT provides full protection of intellectual property rights; encompassed in this description includes patents, copyrights and trademarks associated with intellectual property. NAFTA also provides provisions for covering trade rules, and also allows rules that govern the settlement of disputes.

The Promise of NAFTA

NAFTA was formed with the vision of a global free trade zone; the largest in fact, worldwide from the Yukon to the Yucatan. Designed to open markets and stimulate trade and economic growth, when fully implemented NAFTA was to remove almost all of the barriers to trade and investment among and between the United States, Mexico and Canada. NAFTA was also designed to expand economic growth among and between the countries.

NAFTA also impacted agricultural trade, by removing non-tariff barriers between the United States and Mexico. These barriers were converted in one of two ways: to tariff-rate quotas or ordinary tariffs. Among the barriers to be converted included the import licensing system which existed in Mexico, which had been the largest and most significant barrier to U.S. agricultural sales.

Many tariffs wee planned to be eliminated immediately. Others were phased out over a period of five to fifteen years. Certain products were regarded as import sensitive including dairy and sugar.

NAFTA Provisions Stimulate Trade and Investment (Source: Western Pennsylvania International Business Newsletter, 1997)

Among the provisions of NAFTA include rights granted to foreign investors that guarantee that they receive equal treatment to domestic firms with regard to “the establishment, acquisition, expansion, management, conduct or operations of investments.” Thus, under the treaty host nations are required to offer foreign investors equal rights and treatments, as they would companies within their domestic sphere. Foreign investors under the pact are also to be granted the right to “repatriate profits and capital.” They are also afforded the right to fair compensation should any property be confiscated by the state.

The NAFTA treaty also provides for international medication in circumstances where host governments and investors are involved in disputes related to monetary reparations.

US investors interested wanting to engage in investment in Mexico prior to the implementation of NAFTA faced many barriers. U.S. investor’s pre-NAFTA had to export goods and services in their products at predetermined levels as well as use a percentage of goods and services within their products that were domestic “to the host nation.” Foreign investors were also required to disclose their technology to competitors in Mexico. Yet another barrier, a limit had been established that set a fixed percentage on exports.

Trade restrictions existing in Mexico prior to NAFTA were at best rigid; this was evident in many industries, including automotive production. Mexican law required for example, that vehicles sold in Mexico had to be produced domestically, “with locally produced parts.” NAFTA afforded U.S. automotive manufacturers operating in Mexico the opportunity to import U.S.-produced parts to use in Mexico factories. U.S. companies also were afforded the opportunity to offer U.S. exported vehicles for direct sale in Mexico. Thus, the need to move plants across the border in order to supply the Mexican market was eliminated.

NAFTA also ensured “fair and equitable opportunities” for U.S. investors by virtually extinguishing the terms and conditions that had formerly impeded the export of goods and services to Mexico. Prior to NAFTA, the Mexican government had reserved the right to review all investment proposals in order to assess whether or not they were in the best interests of the country. After NAFTA, only acquisitions over $25 million were considered for review, and the pact set forth arrangements to increase that figure to over $150 million during a nine-year time frame. Mexico did retain exclusive rights for development and operation of certain industrial sectors. These included nuclear power, telegraph services, cable television and postal services among others.

NAFTA also improved the opportunities for U.S. business in Canada, despite the fact that business had been open between the U.S. And Canada for some time. NAFTA expanded the benefits offered to firms founded in the partner country. Under NAFTA, the legal definition of investment also changed, so that it included the following: real estate, stocks, bonds, certain contracts and intangible property. This broadening of scope opened more doors to U.S. investors in several areas that previous had been “hindered by trade restrictions.”

Also important about NAFTA were regulations and provisions set forth to encourage environmentally sound investment actions across continents. Under NAFTA, new investments were scrutinized by host nations regarding their environmental regulations. NAFTA allows governments to apply strict environmental regulations in fact. Governments may under the pact request from foreign investor’s environmental impact statements. Governments are also “strongly dissuaded from lowering environmental standards” in order to attract investments.

NAFTA’s trade and investment provisions aspire to stimulate foreign investment by eliminating those barriers that impair foreign investment. Opportunities have been created for U.S. firms in industrial sectors in Canada and Mexico through the elimination of barriers. NAFTA also opens the door for increased investment potential and economic growth.

Institutional Structure

The ministerial-level NAFTA Free trade Commission or FTC is the central body responsible for seeing NAFTA’s objectives through to completion. The FTC is comprised of “cabinet-level representative” who are obligated to meet once per year. The meetings occur in changing locations among each of the three host countries. The FTC is considered the primary institutional body of NAFTA, responsible then for implementation of the Agreement and also for resolution of disputes arising from interpretation or application of the Agreement.

The Secretariat comprises the second institutional body of NAFTA, with three primary functions. These include the following: (1) support of the FTC, as well as working groups or committees established by it, (2) coordinate NAFTA’s dispute settlement panels and related committees in the way of administrative tasks, and (3) act as “a depository for any investment-related disputes.” The Secretariat is composed of three national sections. This function is modeled after a function established in the Canada-United States Free Trade Agreement of 1989.

Dispute Settlement

The FTC and dispute resolution panels have primary responsibility for resolving disputes that arise within NAFTA.

NAFTA specifies specifically that the Parties involved in dispute use the FTC “as a stage to explore creative solutions to a conflict.” A formal dispute settlement panel is only utilized if no solution can be derived through the FTC. This aspiration of NAFTA has yet to be fulfilled.

The major disputes that have arisen include the Canada-U.S. supply management, U.S.-Mexican tomatoes and the U.S.-Mexican trucking issues. They have been extremely politically charged, thus creative solutions have not yet been realized. Thus far two commercial disputes only have been settled by the FTC. A majority of others went on to panels meant to arbitrate the issues.

NAFTA and the Environment

Interestingly, NAFTA was conceived with a commitment in mind to further the causes of environmental protection. Specific pledges are apparent within the preamble that promote sustainable development of the environment. Also included are provisions meant to strengthen the development of further environmental laws and regulations.

NAFTA also accords a greater level of importance to the environment over trade considerations in some circumstances via article 104. Among these issues include endangered species, ozone depletion and hazardous waste disposal; issues which in fact take precedence over any trade rights that are crated. In Chapter 7, provisions are set forth that allow the U.S., Canada and Mexico to set whatever level of environmental protection they feel is appropriate. Also, Chapter 11, in Article 1114, provisions are set forth that prohibit a country from lowering the established environmental standard or enforcement of this standard as a means of increasing investment within the country. New mechanisms for the submission of environmental concerns are also set forth in Chapter 20.

Other Committees:

1. The Committee on Standards-Related Measures (CSRM)

To fulfill its goal of protecting the environment and promoting sustainable development, the FTC has established a number of bodies, most notably the Committee on Standards-Related Measures (CSRM).

2. The Committee on Sanitary and Phytosanitary Measures (SPS)

This Committee is designed to help facilitate cooperation to enhance food safety, as well as to manage consultations and meetings related to sanitary and phyto-sanitary measures. Institutions such as the SPS Committee were designed to have direct environmental impact.

3. The Commission for Environmental Cooperation (CEC)

The North American Agreement on Environmental Cooperation, or NAAEC was created to complement NAFTA. Its purpose is to help NAFTA better achieve environmental objectives. In this respect, its central feature is the creation of the Commission for Environmental Cooperation, or CEC whose main objective is to address environmental concerns that stem from regional areas, as well as to help prevent conflicts between trade and environmental areas. The CEC also works to enforce environmental laws.

4. The Border Environment Cooperation Commission (BECC) and the North

American Development Bank (NADB)

The Border Environment Cooperation Commission and the North American Development Bank are bilateral bodies that exist between the U.S. And Mexico, designed to address environmental concerns that arise along the U.S. Mexican border.

10 Years of NAFTA

The NAFTA is an example of the benefits that all countries could derive from moving forward with multilateral trade liberalization. Farmers, workers and manufacturers benefit from the reduction of arbitrary and discriminatory trade rules, while consumers enjoy lower prices and more choices.

Source: Excerpts from a speech on “NAFTA: A DECADE OF STRENGTHENING A DYNAMIC RELATIONSHIP”; PIERRE S. PETTIGREW, ROBERT B.ZOELLICK, FERNANDO CANALES, 2004)

A. Strengthening a Dynamic Relationship

January 1, 2004 marks an important milestone in the trade and economic relationship between Canada, the United States and Mexico.”

Present GDP level of these 3 countries is U.S.$11.4 trillion.”

This makes North America the world’s largest free trade area, with about one-third of the world’s total GDP, significantly larger than that of the European Union”

By strengthening the rules and procedures governing trade and investment on this continent, the NAFTA has allowed trade and investment flows in North America to skyrocket. According to figures of the International Monetary Fund, total trade among the three NAFTA countries has more than doubled, passing from U.S.$306 billion in 1993 to almost U.S.$621 billion in 2002. That’s U.S.$1.2 million every minute”

Canada’s exports to its NAFTA partners increased by 87% in value. Exports to the United States grew from U.S.$113.6 billion to U.S.$213.9 billion, while exports to Mexico reached U.S.$1.6 billion.”

US exports to Canada and Mexico grew from U.S.$147.7 billion (U.S.$51.1 billion to Mexico and U.S.$96.5 billion to Canada) to U.S.$260.2 billion (U.S.$107.2 and U.S.$152.9 billion, respectively).”

Mexican exports to the U.S. grew by an outstanding 234%, reaching U.S.$136.1 billion. Exports to Canada also grew substantially from U.S.$2.9 to U.S.$8.8 billion, an increase of almost 203%.”

The NAFTA has allowed both Canada and Mexico to increase their exports to the United States, but not at the expense of each other’s share in the U.S. merchandise import market. That’s because substantial new trade has been generated throughout North America. Canada has consistently accounted for approximately 18% U.S. imports, while Mexico has seen its share of the U.S. imports increase from 6.8% in 1993 to 11.6% in 2002.”

The NAFTA has also boosted competitiveness at the global level. The Agreement has been instrumental in making North America one of the most active trading regions in the world. The NAFTA countries now account for almost 19% of global exports and 25% of imports.”

NAFTA fosters an environment of confidence and stability required to make long-term investments and partnering commitments. With a strong, certain and transparent framework for investment, North America has attracted foreign direct investment (FDI) at record levels. In 2000, FDI by other NAFTA partners in the three countries reached U.S.$299.2 billion, more than double the U.S.$136.9 billion figure registered in 1993. NAFTA has also stimulated increased investment from countries outside of NAFTA. North America now accounts for 23.9% of global inward FDI and 25% of global outward FDI.”

B. Strengthening Prosperity in North America

Liberalized trade provides advantages for businesses and consumers. Manufacturers in the NAFTA region benefit from a greater supply of inputs at lower prices. The result has been a rise in productivity that strengthens their competitiveness in global markets.”

For consumers in all three countries, NAFTA has provided more choices at competitive prices. Lower tariffs mean that families pay less for the products that they buy and they have a greater selection of goods and services, which increases their standards of living.”

The NAFTA has provided benefits in other, sometimes unexpected, ways as well. The movement of goods and people is creating growing linkages that facilitate the exchange of ideas and methods of addressing common challenges. People of the three countries are visiting each other in increasing numbers and are forming families and friendships that span the continent, which, in turn, promotes a deeper understanding of their respective cultures.”

C. Strengthening Environmental Protection

Through the North American Agreement on Environmental Cooperation (NAAEC), the partners are promoting effective enforcement of environmental laws in all three countries. The commission for Environmental Cooperation (CEC), created by the NAAEC, has trilateral programs that facilitate the sharing of information, data, and best practices; promote transparency and public participation; and foster enhanced technical expertise and environmental policies among the three countries.”

In 2003, the CEC Council adopted the Strategic Plan for North American Cooperation in the Conservation of Biodiversity. This is a landmark of cooperation among the NAFTA partners to protect our shared environment, and under this Plan the NAFTA Parties will identify potential collaborative opportunities for biodiversity conservation that arise from regional trade.”

In 2002, the CEC Secretariat prepared a report on Environmental Challenges and Opportunities of the Evolving North American Electricity Market. In response, the Council established a North American Air Working Group to provide guidance and to facilitate future cooperative work on air related issues.”

In 2002, the Parties agreed to a cooperative agenda to protect children from environmental risks, and in 2003 the CEC Council agreed to publish North America’s first report on environment and health indicators for children.”

Over the years, the CEC has prepared North American Regional Action Plans aimed at achieving sound management of chemicals. This program has resulted in the elimination of the production and use of chemicals such as DDT and chlordane within North America.”

In 2003, the CEC organized its second North American symposium on assessing the environmental effects of trade, which focused on energy and agriculture.”

In June 2003, the CEC Council agreed to work toward the development of a green purchasing action plan that is consistent with national and international obligations of the Parties.”

D. Strengthening the Respect for Basic Labour Standards

The North American Agreement on Labour Cooperation (NAALC) adds a social dimension to the NAFTA.”

Enforcement of labor laws in the NAALC countries has been greatly enhanced through an active program of cooperative activities in key areas such as occupational safety and health, protection for migrant workers, workforce development. The tripartite participation of labor union representatives, employers and government officials in the continuing dialogue among the NAALC countries also lends important balance to the policy discussions and programs.”

The Agreement establishes institutions and creates a formal process through which the public may raise concerns about labor law enforcement directly with governments. This process has led to 26 submissions having been filed and reviewed under the NAALC on issues such as freedom of association; the right to organize and bargain collectively, the right to strike; child labor; minimum employment standards; employment discrimination; occupational safety and health; and the protection of migrant workers.”

Over 50 trilateral cooperative programs have been carried under the NAALC including conferences, seminars, and technical exchanges focusing on labor relations, occupational safety and health, workplace equity, and workforce development.”

The three countries have established a Trilateral Working Group on Occupational Safety and Health. The purpose of the Working Group is to review issues raised in public submissions, formulate technical recommendations for consideration by the governments; develop and evaluate technical cooperation projects; and identify occupational safety and health issues appropriate for bilateral and trilateral cooperation.”

NAFTA: not enough

Source:

Interview with Daniel Lederman, co-author of the World Bank report, The World Bank publication Lessons from NAFTA for Latin America and the Caribbean Countries: A Summary of Research Findings, is highlighted in “NAFTA is Not Enough:.”

Daniel Lederman, William F. Maloney and Luis Serven, Lessons from NAFTA for Latin America and the Caribbean Countries: A Summary of Research Findings” Washington, The World Bank Group, 2003.

Joseph E. Stiglitz, “The Broken Promise of Nafta,” the New York Times, New York, 2004. John Audley, “Learning lessons taught by NAFTA,” (Originally published in the San Diego Union- Tribune, November 25, 2003, Carnegie Endowment for International Peace, Washington 2003. www.ceip.org/files/publications/2003-11-25-sdut.asp

Albala, Nuri. “International law; justice as a commodity,” Le Monde Diplomatique, Paris and London. December, 2003

Teresa Gutierrez -Haces, “Geopolitics of relations in North America,” Jacqueline West, ed., South America, Central America and the Caribbean 2003, Europa Publications (Taylor and Francis Group), New York and London, 2003.)

The main lesson” Lederman states, “is that a free-trade agreement is not a substitute for a development strategy.” It may be an ingredient but not the whole framework. This same reservation seems to have been repeated again and again by Latin American and civil society figures at the Monterrey Summit of the Americas last week.

Joe Stiglitz, Nobel Prize economist, questions Lederman’s assumption that “trade agreements like NAFTA are at least yeast in the development cake.” Stiglitz points out that Mexico’s per capita growth rate was only 1% better than a majority of Latin America during NAFTA’s “sway,” but also worse than the 3.2% per capita the country achieved under the previous regime, between 1948-1973. Thus the 1% would be positive improvement. During the NAFTA decade, Stiglitz also points out that Korea and China grew at 4.3% and 7% respectively, these countries being neighbors to Mexico in the Pacific.

Stiglitz argues that NAFTA is a “one legged stool.” It can be used as a too of integration, but it does not have the social dimensions or “institutions of direct democratic participation” as would the European model.

Mexican Canadianist Teresa Gutierrez-Haces notes in a recent paper on North American geopolitics, “that while Mexico, in the first phase of the Fox government, tried to build on NAFTA and long-term bilateral economic links with the U.S. To develop a comprehensive agreement on Mexican migrants in the U.S., the U.S. was little interested in the agenda and put it in the deep freeze after 9/11” (reviving the issue for domestic electoral reasons just recently).

Other Plus & Minus:

Source: John R. MacArthur, the Selling of Free Trade: Nafta, Washington, and the Subversion of American Democracy,)

PLUS

On the positive side, NAFTA successfully created more jobs in Mexico, primarily along the border. These opportunities pay somewhat better than those that would on the interior of the country, and also provide somewhat better working conditions.

NAFTA also enabled many manufacturers the ability to penetrate the market in Mexico, and provide low-cost, custom manufacturing possible within the U.S. Dell Computer for example, uses low-cost component factories along the Mexican border. Such utilization has allowed many corporations to economically flourish. Many jobs were in fact created for the U.S., jobs that might otherwise have been lost to Japanese and Chinese manufacturing exporters.

MINUS

There are a few minuses to NAFTA. Among them, high paying manufacturing jobs within the United States have not been realized; in fact many have still been lost. MacArthur also argues that NAFTA doesn’t necessarily focus on “free trade.” Rather it acts as an investment agreement that protects American corporations seeking to relocate to Mexico in order to acquire “cheap labor.” Mexicans have very little ability to purchase American goods. The GNP is only 4% of that of the U.S. With the exception of drug traders or the Mexican government elite, very few people are benefited.

ENVIRONMENTAL ISSUE

Source:

Gary C. Hufbauer, Reginald Jones Senior Fellow and Diana Orejas, NAFTA AND THE ENVIRONMENT: LESSONS FOR TRADE POLICY, Institute for International Economics

Debra J. Davidson & Ross E. Mitchell, NAFTA in the New Millennium: Environmental Challenges to International Trade; Departments of Rural Economy and Renewable Resources University of Alberta)

Problems such as air and water pollution as well as disposal of hazardous wastes are but among the primary trans-border environmental problems facing the United States, Canada and Mexico. The Rio Grande and Tijuana Rivers have been described as “noxious.”

NAAEC, created from NAFTA, was responsible for creating new bureaucracies whose function would be to monitor the environment, handle environmental disputes and fund “infrastructure” improvements. Among the bureaucracies created were the Commission for Environmental Cooperation, the Border Environmental Cooperation Commission and the North American Development Bank. Both the BECC and the NADB are regulated by the U.S.-Mexico Border Environmental Cooperation agreement, or (BECA).

Despite what may be considered “advanced measures” to aid environmental causes, mixed notions regarding the success of such ventures have been recorded. Rapid improvement along the U.S.-Mexico border has not occurred.

Also of concern, the CEC has an annual budget of only $9 million, with which it is responsible for providing an institutional framework for environmental cooperation. Also among its objectives includes sponsorship of initiatives aimed at reducing pollution. One third of this budget however, is allocated to project support.

Because of this budget constraint, observers have noted that the CEC should be focusing on the following: (1) establishing itself as a reputable source of environment data in an effort to promote policy creation, and (2) focus on improving the citizen submission process by using Articles 13 and 14-15, which emphasize environmental problems.

For the CEC, NADB and BECC to be effective, they must first strengthen their constitution.

Thus, NAFTA in the future will likely be largely influenced by environmental issues, as they will continue to hold a central position related to global politics. Should NAFTA elect to take action that would contribute to a constructive political relationship with EMOs, powerful alliances might be formed. EMOs might also serve as valuable information resources on trade as well as environmental issues.

In short, the future of NAFTA will be heavily influenced by the central position of environmental issues in global politics. Actions taken by NAFTA administrators that contribute to a constructive political relationship with EMOs have the potential lead to a powerful political alliance. As well, EMOs can serve as a valuable source of information on trade and environment linkages, thereby enhancing the ability of NAFTA to improve social well-being.

The most notable accomplishment of EMOs is the success in setting many aspects of the global political agenda. There is suggestive evidence that EMOs have played a direct role in encouraging the development international environmental treaties throughout history. More recently, EMOs have guided debates toward specific issues, including trade in products created through environmentally damaging processes, consideration of the polluter pays principle, and eco-labeling.

While NAFTA stands alone among international trade agreements with the inclusion of an environmental side agreement, observers in the social sciences are skeptical of the extent to which this effort has translated into real environmental improvement. Even the authors of a report commissioned by the CEC itself were largely critical of the effectiveness of the environmental side accord (CEC 1998).

NAFTA has proven itself to be largely resistant to ongoing pressures for change. If anything, there are some indications of decline in the precedence of environmental issues. The environment ministers making up the CEC themselves have expressed a shift in position toward Weak Ecological Modernization, rather than encouraging stronger levels of improvement.

Contradictory Objectives in NAFTA and the NAAEC: The Preamble to NAFTA explicitly reveals a concern for the environment, stating that the signatories resolve to undertake the NAFTA “in a manner consistent with environmental protection and conservation”; “promote sustainable development;” and “strengthen the development and enforcement of environmental laws and regulations…” Nonetheless, protection of the environment goes unmentioned in the enumeration of NAFTA’s basic objectives.

NAFTA: Ten Years Later

(by Andrew Rudman; Office of the Western Hemisphere, Market Access and Compliance)

Since its implementation on January 1, 1994, NAFTA has been more successful than even the most optimistic analysts had predicted

Trade between the United States and Mexico has nearly tripled. The United States now trades more with Mexico in a day than with Paraguay in a whole year, more in a week with Mexico than with Chile in a year, and more in a month with Mexico than with all of the Mercosur countries in a year.

The economies of Canada, Mexico, and the United States are more closely integrated than ever before, and the private sector is responsible for much of this integration.

Since NAFTA’s implementation, two sectors in particular have taken advantage of tariff provisions to create economies of scale within each market. While integration in the automotive industry predates NAFTA, the tariff elimination schedule contained in the agreement promoted far more extensive expansion of cross-border production in all three countries.

The steel sector also has made use of NAFTA to integrate North American markets. Not only has the industry developed production patterns to maximize the advantages of the North American market, but it also has begun to speak with a single voice when dealing with the various governments.

NAFTA implementation created the conditions for integration, but governments cannot mandate it — “rather it must come from the U.S., Mexican, and Canadian private sector third area of regional integration is in policy. As the economies of the United States, Mexico, and Canada continue to integrate, policy decisions facing the three governments should increasingly converge. For example, the need to identify new markets for our “joint” exports will lead to the promotion of North America as one export source, as a producer of high-quality goods and services.

NAFTA represents part of an economic strategy responding to changes in the U.S. economy brought about by the end of the cold war. The dwindling military industry and fewer blue-collar jobs combined with a growing demand for U.S. products and greater opportunities for educated and technically adept workers called for an initiative which would expand opportunities for export-oriented industries and increase high-wage jobs. NAFTA continues to succeed in these areas without compromising U.S. autonomy in fields such as currency, public health, foreign policy, safety standards, welfare programs or immigration policy. Since its implementation, NAFTA has continued to play a vital role in invigorating the U.S. economy. The pact created new jobs for U.S. workers by expanding markets for U.S. goods and services in Canada and Mexico. During the first two years, U.S. exports to partners were up by 22%. Increased exports can be seen in a variety of industrial sectors including agriculture, automotive, banks/brokerages, textiles, energy and trucking.

Other Issues:

A. The Wage Gap

NAFTA should lead to a convergence of per capita income between U.S. And Mexico.

The opposite is happening.

1970-2000, real GDP per capita rose about 60% in Mexico and about 87% in the U.S.

1981 and 1999 – U.S. increased 48%, Mexico increased only 6.8% for the entire period

In 2000, Mexico’s per capita GDP was 16.6% of the United States.

Greek per capita GDP was 47:3% of Germany’s.

In terms of purchasing power parity, Mexico is 25.7% of the U.S. And Greece is 65% of Germany.

B. Migrant Labor million undocumented Mexicans in U.S.

300,000 undocumented workers cross border each year

Sept 11 has delayed migrant labor negotiations

Differences in standard of living make free movement of labor unattainable in short run

Demographics make it attainable over long run

Mexico wants to maintain preferential access to the U.S. In the context of NAFTA widening.

Mexico is seeking deeper integration to maintain an advantage over rest of Latin America.

To enhance security without impeding trade, NAFTA members are working on a common security perimeter.

To improve conditions for Mexican migrants, Fox is seeking legalization of migrant labor.

C. Post 911 – Border Security

Border security is now a high priority

Goal: achieve greater security while minimizing cost of cross-border business

North American economy is increasingly integrated, especially manufacturing

Non-tariff border costs (Can-U.S.) ranged from 5-13% of price of product before 9-11

Border security is being addressed bilaterally.

Canada and U.S. enjoy high level of trust & long history of security cooperation

Mexico and U.S. do not Northern border has 1 border guard for every 4,000 legal crossings

Southern border has 1 for every 1,100 crossings

Roughly 130 U.S. Customs Officers work at Canadian airports; none at Mexican airports

85% of Canadians are in favor of security perimeter

59% of Canadians don’t mind giving up some sovereignty to increase security in North America

62% of Mexicans think Mexico should remain neutral

Mexico is discussing border security with U.S.

Congressional approval may be a problem

Mexico wants to include migration issue

Mexico is creating computerized database on arrivals and departures

Mexico increased security on southern border

Mexico will seek U.S. financial assistance for cost of border security technology

D. People Movement

Passenger delays shorter in North than South.

US visa requirement for Mexicans, not Canadians.

US limit of 5500 NAFTA visas for Mexican professionals but no limit for Canadians.

U.S. customs officers stationed at airports in Canada, but not at airports in Mexico.

9-11 will perpetuate asymmetries regarding movement of people.

E. Cross-border capital flows

NAFTA governments used money-laundering laws to deal with terrorist funds.

9-11 has led to stricter rules to combat illicit transactions.

Cross-border consolidation of financial industry facilitates compliance in Mexico.

Mexican bank secrecy law may complicate.

NAFTA experience: security measures will operate differently for North and South.

MNC security and pre-clearance programs will cover most trade in goods.

Division of security costs between governments and firms affect location costs.

Wage gaps and compliance with financial rules will affect people and capital flows.

F. The Argument against NAFTA

Mexico’s “comparative advantage” is only for very specialized products that are capital intensive, few producers, and have higher risk and costs

Not self-sufficient

Large, efficient agribusinesses with access to technological advances benefit from NAFTA

Economic models do not account for social welfare

G. Other Views

US needs Mexico to be part of security perimeter, not just Canada

Efficiency of border management will influence investment patterns of firms

Economic integration in NAFTA region will deepen and lead to closer ties

Doha success will lessen Latin America’s desire for FTAA

Doha failure will increase its desire for FTAA

1. Public Citizen blames Nafta for the loss of hundreds of thousands of full-time, high-wage manufacturing jobs in the U.S. And noted that of the 67 companies it surveyed, 60 had not created any jobs.

2. But others see the free-trade pact as a success. Economics Professor J. Bradford DeLong at the University of California at Berkeley credits Nafta for moving Mexico toward democracy and prosperity and has argued that U.S. has both a strong interest and a neighbourly duty to try to help Mexican political and economic development. By that yardstick, Professor DeLong says, Nafta is a qualified success. Nafta has helped Mexico economically and in doing so has brought with it political reform with a shift toward more democratic institutions.

Comparative Statements:

Source: NAFTA:

Nick Campolo, Are We Better Off Because of It

AFL-CIO Rallies Against Clinton’s New Free Trade Pacts” New York Times, Sept. 24, 1997

Trade Pacts War on the Home Front” New York Times, Sept. 14, 1997.)

Ricardo’s Theory of Comparative Advantage predicts we would be better off with free trade as participants specialize in their areas of greater factor productivity’s.

The Heckscher Ohlin (HO) Theory agrees with this, and elaborates on it. The HO theory argued countries with different factor endowments could benefit from free trade. The theory shows that if one nation is capital abundant and another is labor abundant, each nation will specialize in producing goods that uses its most abundant resource.

The U.S. is capital abundant, and Mexico is labor abundant.

While greater output is predicted with free trade, it is also predicted that in the U.S., owners of capital will benefit while laborers will loose. However, the gains are large enough that if the winners would compensate the losers, all would still be better off.

So, while gains from trade are predicted, there is still a valid argument for trade adjustment assistance in the U.S. In Mexico, it is predicted that laborers will gain at the expense of capitalists.

Labor Issues:

Labor groups voiced their fears of wage and benefit reductions that would be asked for in the name of competitiveness, as well as their fears of complete job displacement.

They foresaw American companies moving to Mexico to reap the ultra cheap labor and lax environmental laws. Environmentalists envisioned more severe environmental degradation in Mexico where environmental laws are lax and often unenforced. They also predicted that there would be a weakening of America’s present environmental laws in the name of staying competitive with Mexico.

Critics include labor leaders such as John Sweeney, president of the AFL-CIO, and some political figures such as Rep. Richard Gephardt, House Minority leader. The Sierra Club, an environmental group, has been a strong critic of NAFTA.

There are documented cases of workers who have lost their higher paying jobs due to trade, being thrown into a labor market that paid significantly lower wages. Public Citizen, a watchdog group, reported that there were an estimated 69,000 jobs in the high paid motor vehicle industries that were lost due to trade with Mexico in 1996.

This same year, many other manufacturing facilities, such as Zenith Television, JVC, and Thompson Consumer Electronics have closed down American plants and opened shop in Mexico. During this same year, there has been an increase of 7% in temporary services employment. Temporary services jobs often are low paid with little or no benefits, and have become a means to cheaply replace more expensive workers that work directly for companies.

The department of Labor had certified that 127,000 workers had lost their jobs due to imports from Mexico or Canada, yet only 5,300 workers received NAFTA transitional adjustment assistance.

It can certainly argued that many jobs were created by NAFTA, but this means little to the individuals who were forced to find jobs in a market that paid lower wages for the same skills they were once paid more for.

Companies have also used threats to move to Mexico when bargaining with workers. NAFTA Labor Secretariat Professor Kate Bronfenbrunner of Cornell University reported that over one half of companies surveyed had used the threat of moving to Mexico when confronted with union organization attempts.

It is fair to say that consumer gains occurred to some extent. But there are also indications that consumer gains were less than they should have been.

For example, many American auto plants have moved to Mexico to utilize labor costs that were 1 / 11 the average U.S. cost. But as they began producing the same models formerly made in the U.S., they continued selling these models for the same prices as before. Their cost savings have clearly not made their way to consumers.

The Environment: Public Citizen and The Sierra Club reported a harshly negative impact on the environment.

They indicated that promises the environmental side agreements were to address failed to do so, and compiled much data indicating that the environmental conditions have eroded

U.S. Companies have used threats of moving to Mexico to bargain for reductions in environmental restrictions.

Timer Giant Boise Cascade has moved operations from the U.S. To Guerrero, Mexico. A comment they had made after this move was, “How many more mills will be closed depends on what Congress does.”

The 104th congress created a law that allowed for a vast increase in logging of national forests, and suspended many other environmental logging restrictions.

There is little doubt that the threats made by the logging industry provided the impetus to undo environmental policies that took decades to create.

Labor in Mexico: NAFTA proponents spoke of expected prosperity for Mexican workers. Unfortunately, these gains did not materialize.

Between 1993 and 1995 the number of unemployed workers had doubled to 1.7 million. Between 1994 and 1996 real hourly Mexican wages had fallen by 27%, and stood at 37% less than 1980 levels. Of the 1996 working population, 19% worked for less than minimum wage, and 66% lacked any benefits. During the first three years of NAFTA, the citizens classed as “extremely poor” had risen from 32% to 51%. In 1995 the country experienced the well-known Peso Crisis. Mexican workers seemed to have actually have fared worse with NAFTA. This disagrees sharply with the HO prediction

Recco: It would be difficult to state that the U.S. And Mexico would be better off without trade. There is no argument there. But free trade benefits are only optimized when externalities are not present, or are insignificant. But they do exist and are substantial.

The large gains predicted by models are based on assumptions that do not hold true in the real world. There are also distributional effects within national economies from increased trading that indicate a need for compensation.

In summary, NAFTA has failed in a number of ways.

The environmental provision and Mexican labor protection provisions of the agreement did not produce the results that they intended. Trade adjustment assistance has not materialized to an acceptable extent. Mexican labor did not gain as predicted, but rather, suffered losses.

The poor outcome of the NAFTA agreement is a justified call to renegotiate terms.

Environmental and labor provisions should be put into the main agreement.

Until environmental and labor rights goals are met, well thought out trade barriers are justified.

NAFTA DEBATE CONTINUES

The only statistic pro- and anti-NAFTA forces agree on is that trade among the partners has more than doubled over the decade, to $621 billion last year.

NAFTA has brought lower prices and more choices for American consumers, and larger markets for U.S. manufacturers.

Mexico had the most to gain or lose from NAFTA and yet, according to the Carnegie Endowment for International Peace, the pact has been neither the disaster predicted by critics nor the miracle promised by supporters.

The World Bank, in its 10-year assessment, found that NAFTA has helped Mexico move toward the development levels of the U.S. And Canada. Because of NAFTA, the report says, per capita income in Mexico is about 5% higher, foreign investment 40% higher, and exports 25% higher than they otherwise would have been.

NAFTA, on balance, has succeeded in doing precisely what it was intended to do: reduce trade barriers and increase trade among the partners.

Free trade’s benefits flow throughout an economy in the form of lower prices and more choices. (1-6, Source: The Caltrade Report; Vol 2, No 14; Mar 15-31, 2004)

In the United States, NAFTA has failed to fulfill the most dire warnings of its opponents and the most fervent expectations of its supporters. In Mexico, however, the treaty remains controversial and even harmful — ” as do America’s efforts to liberalize trade throughout the hemisphere.

The first six years of Nafta saw unemployment in the United States fall to new lows. (Of course, to most economists there was little basis for Mr. Perot’s worries in the first place. Maintaining full employment is the concern of monetary and fiscal policy, not of trade policy.) Nafta has brought some benefits to Mexico as well; it was trade with America, fueled by Nafta — ” not the bailout of Wall Street lenders — ” that was responsible for Mexico’s quick recovery after the financial crisis of December 1994.

Nafta has delivered on its principal promise of increasing trade. Since 1993, the year before the pact took effect, two-way commerce between the United States and Mexico roughly tripled, from $81 billion to $232 billion. For another, NAFTA has helped speed Mexico’s dramatic economic and political transformation. The trade agreement marks a major milestone in Mexico’s turn away from a closed, centrally directed economic system under the authority of a one-party state, to an open and dynamic market democracy.

NAFTA helped to break the grip of the once-dominant PRI party over the daily life of Mexicans. It set the stage for the election of Vicente Fox in 2000 as the first opposition-party candidate to be elected president in 71 years. NAFTA has also encouraged higher regulatory standards in Mexico and more cross-border cooperation on sensitive environmental issues.

Though U.S. investment in Mexico has increased, American cash hasn’t exactly been gushing southward. In the past four years, America’s direct manufacturing investment in Mexico has averaged $1.9 billion a year, a fraction of the $200 billion invested annually in our domestic manufacturing capacity.

NAFTA has been a blessing for many U.S. manufacturers. Our domestic automobile industry, for example, now produces about the same number of cars and light trucks in the United States as it did before the agreement, but it assembles those vehicles more cost-effectively by spreading out its sourcing among the three NAFTA countries — the United States, Mexico, and Canada. Total manufacturing output in the United States has risen 41% during the past ten years, compared to 34% in the preceding 10 years.

In the first five years of NAFTA, the U.S. economy added a net half million manufacturing jobs. By allowing American manufacturers to more efficiently allocate their production, NAFTA deserves a share of the credit for the healthy up tick in U.S. worker productivity since the mid-1990s.

The recession in manufacturing sector that began in 2000 cannot be reasonably blamed on NAFTA. It began years after the agreement took effect, and for reasons unrelated to NAFTA, such as the East Asian financial crisis, the bursting of the dot com and telecom bubbles, a collapse of business investment and demand, corporate scandals and uncertainty caused by the war on terrorism. In fact, since 2000, imports from and exports to Mexico have both declined. The problem for U.S. manufacturers is not too much trade with Mexico, but not enough.

8-14 Source: Daniel T. Griswold, After 10 Years, NAFTA Continues to Pay Dividends)

Despite three million U.S. jobs eliminated due to trade deals since 1994 and the creation of a massive new U.S. trade deficit with Mexico since the North American Free Trade Agreement (NAFTA), the Bush administration is desperate to declare NAFTA a success.

The eliminated jobs (which include 1.7 million U.S. manufacturing jobs) and the surging $450 billion U.S. trade deficit make you wonder what outcomes would be necessary for NAFTA proponents to stop misrepresenting the mess that has been spawned by this agreement.

Given that half of Mexico’s population lives on $5 a day 10 years after the signing of NAFTA, it needs to be acknowledged that NAFTA is not working for most people. During the eight years NAFTA has been in effect, the gulf between Mexico’s rich and poor has grown, and eight million middle class Mexicans who celebrated NAFTA in 1994 have slipped into poverty.

In Brazil, 10 million people voted against a plebiscite on the proposed Free Trade Area of the Americas (FTAA), a 31-nation NAFTA expansion. And more than 50 million Brazilians elected Luiz Inacio Lula da Silva, who ran on an anti-FTAA platform. Likewise, Ecuadorians elected Lucio Gutierrez, who also opposes the FTAA. This shows that broad-based opposition to the NAFTA model is spreading throughout the hemisphere.

15-18, Source: Lori Wallach, Facts Cloud Attempt to “Celebrate” NAFTA 10th Anniversary Signing Ceremony, Director of Public Citizen’s Global Trade Watch, Dec 2003)

Comparative Statements: (Source: JOSEPH E. STIGLITZ, The Broken Promise of Nafta, NY Times, January 6, 2004)

In the United States, the North American Free Trade Agreement has failed to fulfill

The most dire warnings of its opponents and the most fervent expectations of its supporters.

In Mexico, however, the treaty remains controversial and even harmful — ” as do America’s efforts to liberalize trade throughout the hemisphere.

There is some good news. In America, the “giant sucking sound of jobs being pulled out of this country” that Ross Perot predicted never quite materialized. The first six years of Nafta saw unemployment in the United States fall to new lows.

Nafta has brought some benefits to Mexico as well; it was trade with America, fueled by Nafta — ” not the bailout of Wall Street lenders — ” that was responsible for Mexico’s quick recovery after the financial crisis of December 1994.

But while Mexico benefited in the early days, especially with exports from factories near the United States border, those benefits have waned, both with the weakening of the American economy and intense competition from China. Meanwhile, poor Mexican corn farmers face an uphill battle competing with highly subsidized American corn, while relatively better-off Mexican city dwellers benefit from lower corn prices.

And as all but one of Mexico’s major banks have been sold to foreign banks, local small- and medium-sized enterprises — ” particularly in nonexport sectors like small retail — ” worry about access to credit.

Growth in Mexico over the past 10 years has been a bleak 1% on a per capita basis — ” better than in much of the rest of Latin America, but far poorer than earlier in the century. From 1948 to 1973, Mexico grew at an average annual rate of 3.2% per capita. (By contrast, in the 10 years of Nafta, even with the East Asian crisis, Korean growth averaged 4.3% and China’s 7% in per capita terms.)

And while the hope was that Nafta would reduce income disparities between the United States and its southern neighbor, in fact they have grown — ” by 10.6% in the last decade.

There has been disappointing progress in reducing poverty in Mexico, where real wages have been falling at the rate of 0.2% a year.

Nafta enhanced Mexico’s ability to supply American manufacturing firms with low-cost parts, but it did not make Mexico into an independently productive economy.

America perhaps stood more to gain economically than Mexico, but the concrete gains were likely to be small on both sides. Tariff rates on both sides were already very low, with Mexico’s tariffs being slightly higher than America’s, and Nafta would not eliminate important nontariff barriers.

The disparity in income across the Mexican border is among the largest anywhere, and the resulting migration pressure was enormous. Doing what little America could do to enhance growth in Mexico would be good for Mexico, and good for America; and it was the right thing to do for Mexico

Unfortunately, much of the goodwill that the United States might have expected has been squandered. First, America attempted to use barriers to keep out Mexican products that began to make inroads in U.S. markets.

Despite the impressive efforts of workers’ rights groups, efforts to ease the life of immigrants have stalled. Recent moves in California to prevent illegal immigrants from receiving driver’s licenses and medical care have been a depressing sign that conditions for Mexican immigrants in this country are getting worse.

The United States has said it does not want agriculture or non-tariff barriers to be on the table in these talks. But while it refuses to give in on these points, it wants Latin American countries to compromise their national sovereignties and to agree to investor “protections.”

In fact, the United States has been demanding that countries fully liberalize their capital markets just as the International Monetary Fund has finally found that such liberalization promotes neither growth nor stability in developing countries. Unfortunately, many of the smaller and weaker countries will probably agree in the quixotic hope that by linking themselves to America, they will partake of America’s prosperity.

In the long run, while particular special-interest groups may benefit from such an unfair trade treaty, America’s national interests — ” in having stable and prosperous neighbors — ” are not well served. Already, the manner in which the United States is bullying the weaker countries of Central and South America into accepting its terms is generating enormous resentment.

NAFTA’s effects cannot be isolated from the broader changes in a globalizing economy. But many economists and political analysts say that while the accord stimulated trade and overall growth, it also brought jarring dislocations. For better or worse — or both — NAFTA transformed the continent’s economic landscape with startling speed.

Robert B. Zoellick, the U.S. trade representative, says NAFTA achieved its objective of increasing trade, especially doubling American agricultural exports to Mexico. Though the U.S. trade deficit with Canada and Mexico grew nine-fold to nearly $90 billion, total trade among the three nations grew by 109%.

Critics argue that the pact failed to address problems created by massive industrialization along the U.S.-Mexican border, which has some of the region’s most polluted rivers and air. The treaty also has done little to stem the flow of illegal immigrants northward. Bitter trade disputes over trucking, sugar and timber remain unresolved

But there is no question that Nafta hastened the economic integration of the United States and its neighbors. Billions of dollars have flowed from U.S. And Canadian investors to Mexican factories, stores and banks, along with raw materials and components for manufacturing. A steady stream of northbound trucks clogs the highways, carrying automobiles, televisions and vegetables to U.S. And Canadian customers

If these trade agreements do no better for them than Nafta has done for Mexico, then both peace and prosperity in the hemisphere will be at risk.

Fact sheet on the NAFTA Record: A 10th Anniversary Assessment

Increased trade and investment: NAFTA supporters emphasize that total trade among the NAFTA countries has more than doubled between 1993 and 2002, increasing at a rate of $1.2 million per minute. There has also been a doubling of foreign direct investment by NAFTA partners in the three countries, from $136.9 billion in 1993 to $299.2 billion in 2000.

Disconnect between exports/investment/productivity and wages: Mexico did indeed attract a significant number of jobs in export processing factories. However, despite substantial productivity growth, real wages in manufacturing dropped 13.5% between 1994 and 2000, according to the International Monetary Fund.

Failure on labor rights: Part of the explanation for falling Mexican wages is that NAFTA has failed to protect the rights of workers to fight for their fair share of economic benefits. The agency set up under the NAFTA labor side agreement has proved incapable of holding governments or corporations accountable for worker rights violations. More than 20 complaints have been filed regarding alleged violations in all three NAFTA countries, but in not a single case has the process yielded more than a bit of public exposure to the problem.

New jobs disappearing: According to the Mexican government, from a high of about 1.3 million in 2000, the country lost more than 230,000 export assembly jobs by the end of 2003. Analysts estimate that as much as 35% of these cuts were due to shifts in production to China, where workers make about 60 cents an hour, compared to Mexico’s average manufacturing wage of about $2. This job flight has raised fears that Mexico’s strategy of attracting investment by offering low wages is short-sighted.

Foreign investment offers little benefit for other industries: NAFTA forbids governments from placing requirements on foreign investors that would ensure benefits for the broader economy. For example, Mexico cannot require that investors use a set amount of local content in manufacturing. Hence, only about 3% of inputs are Mexican. www.tni.org/archives/cavanagh/nafta.htm”

Rural impacts: Under NAFTA, Mexico agreed to a timetable for lifting barriers to U.S. And Canadian agricultural imports. In most years, the Mexican government has allowed even more imports than required, claiming that this would lower consumer food prices. As a result, U.S. corn imports doubled between 1994 and 2000. There are no firm data on how this affected rural livelihoods, but World Bank figures indicate an increase in rural poverty from 79% in 1994 to 82% in 1998.Mexican industries that use corn did benefit from cheaper prices, but these cost savings were not passed on to consumers due to monopoly pricing of tortillas, a staple food.

NAFTA math” on U.S. jobs: During the NAFTA debate, promoters argued that the deal would lead to a large U.S. trade surplus with both NAFTA partners, and on the basis of this, they projected a net job increase. A widely cited report by the Institute for International Economics, for example, estimated that NAFTA would create 170,000 net jobs. However, instead of a trade surplus, the United States has experienced massive deficits with both Canada and Mexico. Even though U.S. exports to these countries did increase somewhat, the combined U.S. trade deficit with Mexico and Canada went from about $9 billion in 1993 to $87 billion in 2002 – almost a tenfold increase. NAFTA supporters now claim that it is valid to base job impacts solely on exports, without considering the displacement effects of increased imports. Critics, on the other hand, argue that if U.S. consumers switch from buying American to foreign products, this does have a negative effect on U.S. employment.

NAFTA layoffs: The U.S. Labor Department has certified more than a half million American workers for a retraining program available to those who have lost their jobs because their firm shifted production to Mexico or Canada or was hurt by competition from those countries. This number is just a fraction of total jobs lost because of the program’s narrow qualification criteria.

Whipsawing: NAFTA has had a detrimental impact on the power of American workers to fight for better wages and working conditions. Cornell University Professor Kate Bronfenbrenner has documented threats by U.S. employers to move to Mexico and other low-wage countries in order to fight unions and restrain wages. She found that the use of such threats in union organizing drives increased from about 50% in the early 1990s to 62% in 1998 and 68% in 1999. Most economists concede that such pressures were a factor in the meager growth of U.S. real wages in the late 1990s, despite near record low unemployment.

Blackmail in Canada: In Canada, the business community has used NAFTA to push for cuts in social programs, arguing that it was necessary to compete with the United States, which generally offers lower levels of protection. The clearest example of their impact is the scaling back of Canada’s unemployment insurance. According to a publication of the Canadian Centre for Policy Alternatives, the percentage of unemployed that qualified for this insurance dropped from 87% in 1989 to only 39% in 2001.

Environment: Although NAFTA promoters theorized that trade-related economic growth would produce greater environmental spending, research by Kevin Gallagher of Tufts University reveals that such expectations were pure fantasy. Despite steady economic growth, Mexican government investment in environmental protection declined in real terms by about 45% between 1994 and 1998. Environmental funding from the North American Development Bank amounted to only about $3 million per year during NAFTA’s first decade. Meanwhile, air pollution from Mexican manufacturing nearly doubled.

Unprecedented Investor rights: When officials in any of the NAFTA countries attempt to tackle environmental problems through regulation, they face the threat of an expensive lawsuit, thanks to NAFTA protections for foreign investors. For example, investors are allowed to demand compensation for “indirect expropriation,” interpreted to mean any government act that diminishes the value of a foreign investment. Following one such suit, the Mexican government was ordered to pay nearly $17 million to a California firm that was denied a permit from a municipality to operate a hazardous waste treatment facility in an environmentally sensitive location. Similar suits in Canada and the United States have stirred up rancor among state and local government groups that have historically supported free trade agreements.

The steep decline in manufacturing jobs in the United States is not exactly a state secret, Mexico has gained 500,000 manufacturing jobs between 1992-2003. A recent study by Robert Scott, an economist with the Economic Policy Institute, showed that NAFTA has indeed caused a net job loss of 879,280 in the United States.

1.7 million American small farmers went bankrupt during the last 10 years

Although immigration from Mexico has not stopped by any stretch of imagination (the number of undocumented Mexican migrants in the United States rose from 2 million in 1990 to 4.8 million in 2000) NAFTA-defenders claim that the U.S. would have a much worse immigration problem if it weren’t for the local jobs created in Mexico thanks to NAFTA.

Hundreds of thousands of American jobs have gotten lost in the job shuffle, including more than 115,000 lost in Ohio, Michigan and Indiana alone. Unemployment has hit an eight-year high and the Republicans are ever refusing to extend unemployment benefits.

Ten years of the North American Free Trade Agreement have spurred economic development in Mexico, but the country hasn’t caught up with its partners, the United States and Canada, the World Bank said Wednesday.

NAFTA has created a prime environment for a commercially-oriented, innovative export credit agency such as Export Development Canada to facilitate mutually beneficial trade between Canada and Mexico.

NAFTA has greatly accelerated trade between Canada and Mexico. Total bilateral trade between Canada and Mexico trade (in USD terms) has doubled since 1993 and Canadian exports to Mexico have quadrupled in the same time frame. Mexico has quickly become one of Canada’s largest export markets. In turn, Mexico exports more to Canada than to all of the countries of the European Union combined.

Canadian investment in Mexico grew from USD $500 million in 1993, to close to USD $5 billion in 2002. Canadian companies are the fourth most important investors in Mexico, after the U.S., the Netherlands and Spain.

NAFTA has also opened the door to dialogue in areas other than trade, such as the environment, human rights, and labour standards, as well as education and culture

The charge is being led by small and medium-sized enterprises (SMEs), whose activities are at the core of innovation in Canada, and whose growth potential lies beyond Canada’s borders (approximately 70% of exporters and investors supported by EDC in Mexico last year)

Some unequal effects from the agreement, including that northern and central states grew faster in the 1990s, modestly reducing income gaps with the area around Mexico City, while poorer southern states grew slower because of low levels of education, infrastructure and quality of local institutions.

One key conclusion from careful evaluation of the impact of NAFTA is that the treaty does not suffice to ensure economic convergence in North America”

Foreign investment in Mexico has increased dramatically. It now stands at $12 billion a year, more than India receives. Exports have grown by a factor of three, up to $161 billion. Mexico’s per capita income has risen 24%, to $4,000 a year. All these trends were underway before NAFTA, but NAFTA continued and cemented them.

Mexican farmers are upset at competition from American pork and corn. Most of these farmers are not mechanized in any way. They push a plow through their fields with a burro or ox. It is hard to imagine how preserving these sectors could benefit Mexico’s future development.

A recent World Bank report confirms this positive view: “without NAFTA Mexican exports would have been around 25% lower than the actual numbers, foreign direct investment would have been around 40% less and the country’s per capita income in 2002 would have been up to 5% lower.”

Between in the first six years of NAFTA U.S. average farm gate prices per bushel dropped 33% for corn, 42% for wheat, 34% for soybeans and 42% for rice, while production costs have continued to skyrocket

In the U.S., 33,000 small farmers with annual incomes of less than $100,000 were forced out of business during the first seven years of NAFTA, a rate seven times higher than before NAFTA the proposed new trade agreements include foreign investor rights modeled after NAFTA as trade rules that could affect state and local authority in such areas as water services, electricity, health facilities, health insurance and zoning

As the North American Free Trade Agreement nears its 10th anniversary, a study from the Carnegie Endowment for International Peace concludes that the pact failed to generate substantial job growth in Mexico, hurt hundreds of thousands of subsistence farmers there and had “minuscule” net effects on jobs in the United States.

The report seeks to debunk both the fears of American labor that Nafta would lure large numbers of jobs to low-wage Mexico, as well as the hopes of the trade deal’s proponents that it would lead to rising wages, as well as declines in income inequality and illegal immigration.

The Carnegie findings strike a much more pessimistic note than those of a World Bank team that concluded in a draft report this year that the trade accord “has brought significant economic and social benefits to the Mexican economy..”..

The Carnegie report argues that the growth in manufacturing resulting from the trade agreement was largely offset by lost employment among rural subsistence farmers, who were adversely affected by falling prices for their crops, especially corn – a problem intensified by the Mexican government’s decision to lower tariff barriers to American-grown corn even more rapidly than the agreement required.

North America’s trade deal drove down the real wages of Canadian workers by about 20% — if they did not lose their jobs altogether, says globalisation critic Murray Dobbin, author of a critical book about Canada’s new prime minister, Paul Martin.

All of the studies have shown that workers in Mexico, the U.S. And Canada have not profited from NAFTA,” says Dobbin, whose book ‘Paul Martin: CEO for Canada’, argues the multi-millionaire prime minister broke the unions in his companies, closed domestic shipyards and registered his fleet under “flags of convenience” to drive down wages and workplace rights

Dobbin said the erosion of jobs and buying power occurred when Canada racked up huge trade surpluses. “It’s ironic that these surpluses came at a time when workers have seen the greatest erosion of their real wages since the Great Depression of the 1930s.”

U.S. investments in Canada ballooned to 215 billion dollars (166 billion U.S. dollars) in 2001, an increase of 150 per cent in the past 10 years, according to government figures. During the same period, Canadian investment in U.S. companies jumped 230%, to nearly 200 billion dollars.

From 1993 to 2001, Canada’s merchandise exports to its NAFTA partners increased almost 95%. Mexican exports increased by 221%, and U.S. exports increased by 86%.”

Dobbin says Canada has lost 300,000 industrial jobs to Mexico and low-wage, anti-union southern states in the U.S.

Ten years on, we’ve got a better sense that the folks who sold NAFTA kind of oversold the benefits and the folks who were very fearful of it were a little overly pessimistic,” said Patrick Cronin, assistant professor of international studies at Thunderbird, the American Graduate School of International Management, in Glendale.

Tying any economic development over the past 10 years solely to NAFTA is shortsighted. Other factors, such as increasing globalization, the devaluation of the Mexican peso, and the stock market boom and bust in the United States, helped shape the countries’ economies and lifestyles

The Mexican economy: Foreign investment soared until the recent recession, as U.S. companies in particular felt more comfortable doing business there. Economists consider the increased foreign investment more important than trade gains because tariffs on the U.S. side already were relatively low. Overall, Mexico’s fortunes are now more closely tied to a stable United States rather than its more volatile Latin American neighbors. More than 80% of the country’s exports are bound for the United States. The U.S. economy gained less, as expected, given its size. “We have such a huge economy that NAFTA didn’t make as much of a difference,” Orrenius said.

Large American manufacturers: They slashed production costs and boosted profits by opening factories in Mexico, where workers are paid about $2 an hour. Automakers, clothing manufacturers and computer and electronics companies, in particular, have used Mexico as a platform for fast, cheap and flexible production facilities. Levi Strauss & Co., once a big player in El Paso’s dominant textile industry, has moved most production overseas.

Nationally, more than 500,000 workers have been certified by the government as having lost their jobs because their employer shifted production to Mexico or Canada or the business was hurt by imports from those countries. The hardest-hit areas, based on the number of certified NAFTA casualties, have been North Carolina (48,152 workers), Texas (47,657) and Pennsylvania (36,855). Arizona, whose economy is heavier in services than manufacturing, has had 5,000 such workers.

Major NAFTA critics, such as the Economic Policy Institute in Washington, D.C., contend that the actual U.S. job damage attributable to NAFTA is close to 800,000.

The North American Free Trade Agreement has had a positive impact on Mexico’s economy, although its benefits could have been greater if the government had spent more money on education, technology and infrastructure, says a report released by the World Bank yesterday, two weeks ahead of the pact’s 10th anniversary.

Among the unequal effects of the pact were the fast growth of northern and central states compared with slow growth in the south, and the increase in productivity of irrigated lands vs. nonirrigated lands. Large firms also benefited from increased access to northern markets, while small and medium-sized companies continued to suffer the effects of the country’s economic crisis.

According to the bank, there was an increase in wages of those with higher levels of education, and NAFTA, like other free-trade agreements, increased the demand for highly skilled workers at the expense of those with low educational levels.

Researchers for the report were also surprised to find that Mexico’s agricultural sector gained from the agreement, while farmers, including those at the subsistence level, were not negatively impacted by NAFTA, as previously thought

According to a report released by OXFAM in August analyzing the situation of corn farmers, real prices for Mexican corn have declined more than 70% since 1994, when NAFTA was implemented.

As a result, 15 million Mexicans who depend on the crop have had seen a sharp decline in incomes.

The cheap imports have caused farmers to go to the cities or migrate, both of which are problematical, because it increases the size of our cities and increases illegal immigration.

While the World Bank report says small farmers have not been affected by the pact, those growing export foods, especially those grown on irrigated lands, benefited the most. In general, NAFTA was responsible for productivity growth, since the amount of time for adoption of foreign technologies was cut in half in comparison to the period prior to the agreement, the report says.

The report also points out that, despite its success, NAFTA has not ensured economic convergence with North America and that “Mexico still suffers from important gaps that constrain its ability to catch up with its northern neighbors.”

Its member countries — the United States, Canada and Mexico — now envision a Free Trade Area of the Americas, a hemisphere wide trading bloc with barriers falling throughout the Americas. But public advocacy and special-interest groups pledge to block future agreements based on NAFTA, which they call a miserable failure.

The opponents claim the agreement cost thousands of jobs in the three countries, widened the gap between rich and poor and superseded national sovereignty in terms of the environment, worker rights and economic security. They argue that NAFTA needs to be renegotiated and that new accords need to take these issues into account

Concerns that have grown out of NAFTA, including rich nations’ refusal to cut agricultural subsidies and disputes over intellectual property rights and foreign investment, are holding up progress on the 34-country Free Trade Area of the Americas and World Trade Organization talks on global trade rules.

The next step for the agreement is to address post-Sept. 11 border restrictions and work toward a migration accord to provide legal channels for the millions of Mexicans who work in the United States. For Mexico, it also means working toward vast improvements in education, infrastructure, and research and development

Opponents say NAFTA failed to substantially increase wages or reduce income inequalities, replaced manufacturing jobs with low-paying service sector jobs in Canada and the United States, and allowed foreign investors to sidestep environmental, drug-patent and food-safety laws in all three countries

But NAFTA still had net gains for all three of its members, economists and analysts say. In Mexico’s case, exports grew and the auto industry flourished — although in the past three years, mostly because of the lure of cheaper wages in China, Mexico has lost about 200,000 of the assembly-for-export jobs that NAFTA first brought.

The illegal immigration from Mexico to the U.S. has become part of everyday life on both sides of the border, for Mexico, it is an escape valve for the unemployment, it generates billions of Dollars in annual revenues. It has become part of the young working class people’s upbringing.

For the U.S., it reduces their labor costs, it permits agricultural production that, otherwise, could not be made, the U.S. hotel industry and other industries would have serious problems without it.

Possibly the most important aspect for Mexico is that it is changing the American political outlook towards Mexicans, as this is becoming an important electoral force in the U.S.

NAFTA has not created a consumer market in Mexico. It has created an export platform. As a Nation, we now ship more consumer goods to Switzerland than we do to Mexico. A good example is the auto industry. From 1994 to 1995, production in the Maquilladoras for the domestic Mexican market plummeted by 72%. The production for export to the United States grew by 36%. We are selling fewer cars in Mexico and shipping more back here and, as a result, our trade deficit in the auto sector ballooned to more than $15 billion.

Meanwhile, the environment is suffering the consequences. Families along the border continue to live near, bathe in and drink the water that American Medical Association has called — “and I quote — “a cesspool of infectious disease.” This is the AMA.

The North American Development Bank, which was set up to fix these problems, we all remember that debate. That was going to solve some of the environmental problems on the border. But after 38 months, the bank has yet to make a single meaningful loan for the public good. And, what is more, NAFTA has helped create what some called a wave line border check. Eleven thousand trucks now pass over the border from Mexico every day and for every truck that gets inspected, 199 do not. They are just waved through and God knows what is on them. Every single week seems to bring another story of corruption at the highest levels of the Mexican Government.

The United States is Mexico’s single largest market for agricultural products, absorbing 78% of all Mexican agricultural exports, which have doubled since 1994. Two-way trade created by NAFTA has benefited the Mexican agricultural sector immensely. NAFTA has contributed to increased agricultural earnings and jobs in the agricultural sector. The U.S. recognizes that Mexican agriculture faces structural challenges that predate NAFTA. These include the high cost of credit, high producer costs, and lack of marketing, transportation, and cold chain infrastructure. The United States is actively cooperating with the Mexican government and the private sector through the Partnership for Prosperity and other bilateral programs to address these issues.

Opening markets has benefited both sides and U.S.-Mexico bilateral trade has indeed increased, reaching nearly 140 billion pesos in 2001. As U.S. exports of agricultural products have increased substantially since NAFTA’s implementation, Mexico’s exports of agricultural products to the United States have done the same.

Overall, Mexico now enjoys a trade surplus with the U.S. thanks to NAFTA. For example, increased access to U.S. agricultural products has provided the Mexican livestock sector (beef, poultry, and pork) with a low-cost, high quality, sustainable supply of inputs such as feed grains, thus lowering Mexican farmers’ production costs over time. Thus, the Mexican agricultural sector has been a beneficiary of two-way trade both on the export and import side. While some sectors have had challenges with liberalizing markets, NAFTA has offered a reasonable implementation period to allow both countries to adjust to the changing market conditions

The Points below are with reference to Canada and NAFTA

The main economic rationale for free trade, however, was that increases in two-way trade would boost Canadian productivity, and thus lead to higher wages and rising living standards. What actually happened was that, between 1989 and 1993, average labour productivity in the business sector grew at an annual rate of 0.6%, which was less than half of its rate of growth over the previous eight years (1981-88), when productivity rose by 1.6% per year. Over the same CUFTA period (1989-93), real (inflation-adjusted) hourly wages in Canada rose by only 0.2% per year — less than half the 0.5% average increase over the previous pre-free-trade years.

A comparison of productivity increases and labour costs in the key manufacturing sector in the U.S., Canada and Mexico from 1993 to June 2002 shows that, over this period, the cumulative increase in Canadian output per hour was only 14.52%, while the increase in the U.S. amounted to 51.98%, and in Mexico 53%. Labour costs, measured in U.S. dollars, actually fell in all three countries, further evidence that productivity gains were not passed on to workers in any of the three NAFTA countries.

In the years prior to CUFTA, manufacturing productivity in Canada stood at 83% of the U.S. level. By 2000, it had dropped to only 65%. So the productivity gap widened rather than narrowed, as promised by the proponents of free trade. One of the reasons for the widening productivity gap is the dominance of foreign transnational corporations in Canadian manufacturing, since foreign corporations typically invest much less than domestic firms in industrial research and development.

The promoters of free trade predicted that it would lead to new foreign direct investment (FDI) in Canada and to the expansion of U.S.-owned branch plants. Such U.S. investment did grow by a modest C$36.8 billion in the CUFTA years, and by a further C$102 billion under NAFTA up to 2002. But most of this “investment” took the form of takeovers of Canadian firms, not new “greenfield” investments. From 1985 to 2002, there were 10,052 foreign takeovers of Canadian companies, 6,437 of them by U.S. corporations.

Of all the new direct foreign investment in Canada over this period, an extraordinary 96.6% was for takeovers and only a meager 3.4% for new business. And to make matters even worse, many of these takeovers were financed through borrowing within Canada.

At the same time, there was a marked increase in Canadian FDI in the U.S., showing a pattern of disinvestment from Canada. By 2002, Canadians held about U.S.$133 billion worth of FDI in the U.S., three times more than they did in 1990. But this doesn’t mean that Canadian investors are taking control of key U.S. industries. As Mel Hurtig points out, “There is not one single industry in the U.S. that is majority-foreign-owned and/or foreign-controlled.” As of 1999, Canadians owned less than 0.6% of U.S. industrial investment.

Job losses and labour “flexibility”: In describing its “success,” NAFTA boosters credit the agreement with increasing employment and prosperity in all three countries. Admittedly, during NAFTA’s first nine years, employment in Canada grew by 19%, representing a gain of 2.7 million new jobs. But fewer than half these new jobs were full-time. And this apparently rosy period of Canadian job gains under NAFTA should be set against the prior six-year period of heavy job losses under CUFTA. Between 1988 and 1994, Canada lost 334,000 manufacturing jobs, equivalent to 17% of total manufacturing employment in the year before CUFTA came into effect. Canada’s official unemployment rate rose from an average of 7.8% in 1988-90 to 11% during 1991-93.

Social programs: Canada’s business elite has consistently argued that, for Canada to be competitive in NAFTA, its social programs would have to be cut to match the generally inferior U.S. levels. This process started just four months after the implementation of CUFTA when the Mulroney government brought down its 1989 budget. It imposed cuts to Unemployment Insurance, old Age Security, and federal transfers to the provinces for health care and education. This pattern of social spending cuts continued throughout the mandate of the Tory government, and was accelerated by the Liberals after they took office in 1993 — especially in their 1995 budget which included $29 billion in spending cuts over the next three years

The most stark example of this downward harmonization of Canadian social policy is what happened to unemployment insurance. The UI system has been slashed repeatedly by both Tory and Liberal governments to conform to the lower standards prevailing in the U.S. Whereas in 1989, 87% of the unemployed in Canada qualified for UI benefits (as compared to 52% in the U.S.), by 2001 only 39% of jobless Canadians could qualify for coverage. These deep cuts hurt more women than men because women more frequently work part time and enter and leave the workforce more often due to child-care responsibilities

Trade disputes: The Mulroney government and other free trade pushers claimed that a free trade agreement with the U.S. would exempt Canada from American anti-dumping and countervailing duty measures. This promise, too, proved false. Canada remains subject to U.S. arbitrary actions such as the punitive U.S. duty on Canadian softwood lumber exports. All that Canada got was a provision that special panels would decide whether U.S. trade laws were being correctly applied. But even if a panel were to rule against the U.S., the U.S. would be free to change its laws unilaterally to negate such a ruling

Agriculture: The experience of Canadian farmers clearly demonstrates that more trade does not necessarily translate into more prosperity. The National Farmers Union points out that, since 1988, agricultural exports have almost tripled, but net farm income (adjusted for inflation) has fallen by 24%. Over the same period, farm debt has doubled, 16% of Canadian farmers have been forced off the land, the number of independent hog farmers has dropped by 66%, and there are 2,400 fewer jobs in the agri-food processing industry

Free trade and other neoliberal economic policies have also led to a markedly more unequal distribution of wealth. From 1984 to 1999, the poorest 40% of Canadians had their share of the nation’s total wealth reduced from 1.8% of all personal assets to just 1.1%. Over the same period, the richest 10% of the population enjoyed a rise in net worth from 51.8% of all wealth to 55.7%.

NAFTA may not have helped the export efforts of U.S. furniture manufacturers much, but it has been a big bonus for Canadian manufacturers. Canadian furniture exports to the United States have grown nearly four times since 1993. NAFTA is partly responsible for this, but then, so is the declining value of the Canadian dollar through much of the ’90s and up until 2003.

The Points below are with reference to U.S. And NAFTA

Canada and Mexico are the United States’ No. 1 and No. 2 trade partners in terms of the volume of exports. Together, they constitute 39% of all U.S. trade activity, and their importance is even greater when we consider the volume of capital flows within North America

NAFTA and employment: The exact number of U.S. workers negatively affected by NAFTA is difficult to calculate. A special Act of Congress created a program of benefits for workers who have been certified as having lost jobs due to NAFTA, and, as of July 2002, the number stood at 413,123. But this figure grossly understates the job losses directly caused by NAFTA because many workers don’t know about this program and others apply for relief under a more generic trade adjustment program. Also pertinent is that only industrial workers can qualify. Service providers are not eligible, nor are workers who lose their jobs indirectly to NAFTA such as auto parts suppliers who are laid off when the auto plant they serve is moved to Mexico. Thus the number of jobs lost directly and indirectly because of NAFTA is considerably higher than 413,123. U.S. employment did grow during the late 1990s, but that growth served mainly to redistribute employment into industries that pay lower wages and offer fewer benefits. This shift is perceptible in the fact that, between 1990 and 2000, manufacturing industries in the U.S. lost 1.5 million jobs. Meanwhile, service sector employment grew by 10.5 million jobs, and retail and wholesale trade jobs increased by 3 million. Service sector jobs accounted for 99% of the net new jobs created during the 1990s. Surveys of such displaced industrial workers indicate that they suffered a reduction of wages of 13%, on average, when they found new employment in the service sector. Average wages in the service sector are only 77% of those in manufacturing.

NAFTA and labour: During the NAFTA debate, unions feared its impact on worker rights. The Clinton administration responded with a weak side agreement designed to gain some labour support. But this side agreement is so toothless and cumbersome that it has never effectively protected the rights of workers. As the unions feared, the greater ease afforded the corporations to move operations out of the U.S. has armed them with the threat of moving to undermine job security and quality, suppress wages, and discourage union organizing. When firms actually do move, jobs are lost — not because of increased competition from Canadian and Mexican imports, but because of the availability of lower wages elsewhere. Studies have found that, between 1992 and 1995, over half the employers surveyed had used the threat of closing and/or moving production during union organizing drives, and to resist union bargaining efforts if such drives were successful. The average annual number of new union members gained through organizing efforts dropped from about 300,000 in the mid-1970s to less than 100,000 by the mid-1990s.

The shift in jobs to lower wage areas has not only depressed wages in the U.S., but has also created a global system of production in which goods are produced by the cheapest labour. Some economists have argued that this system is more “efficient,” but it has also reduced the ability of consumers to buy the products of the cheap-wage system. During the 1990s, this slack was taken up by a large increase in consumer debt — up from 63% of annual personal income in 1979 to 85% in 1997. Between 1990 and 2000, credit card debt grew from $432 billion to $1,173 billion

NAFTA and Immigration: One of the promises of NAFTA was that it would help Mexico and lower pressures to immigrate to the U.S. This has not happened. Between 1991 and 2000, the number of persons declared “illegal aliens” and deported from the U.S. grew by 51% to 1,814,729, with 95% of these deportees being from Mexico. Between 1998 and 2001, legal Mexican immigration to the U.S. increased by 40%, and in 2001 205,000 Mexicans came to this country. Violations of the civil rights of Mexican migrants to the United States are a growing problem, both when they attempt to cross the border and once they are living and working in the United States.

NAFTA and Inequality: The problems associated with NAFTA and other trade agreements have exacerbated inequalities between people of colour and white society. The gap in wages between white workers and those of both African-Americans and Latinos has widened. In 1990, the difference between white median family income and that of African-Americans and Latinos was $12,645 and $18,901, respectively. By 2000, these gaps had increased to $14,249 and $19,748. There is also a gap in access to health care benefits that has not been narrowed in the NAFTA years. In 2000, 67% of whites received health care benefits, compared with 60% of African-Americans and 45% of Latinos.

One reason for these growing gaps has to do with the massive job dislocation that has been caused by negative trade balances and highly mobile capital. African-Americans and Latinos are often the first to be laid off and it takes them longer to find alternative employment. As a result, unemployment rates of both African-Americans and Latinos have been consistently higher during the 1990-2000 period. In 1990, the African-American employment rate was three times higher than the rate for whites (15.1% compared to 4.8%). Latinos had a rate of 9.3%. By 2000, with strong economic growth, the gaps narrowed slightly but were still significant — 7.6% for African-Americans and 5.7% for Latinos, compared with a rate of 3.5% for whites. So even in the best of times these minority groups did poorly, and during the current recession it is likely that the gaps will widen once more.

The end result is that more African-Americans and Latinos have fallen into poverty and/or have been incarcerated. The average poverty rate for whites between 1999 and 2000 was 7.5%, but for African-Americans was 23.1% and for Latinos 22.1%. At present, African-Americans and Latinos make up 62% of the U.S. prison population. In 1999, 11% of all black males and 4% of Latinos in their 20s and 30s were in prison or jail, compared with only 1.5% of whites in the same age bracket.

Large U.S. manufacturers were big gainers on NAFTA: They slashed production costs and boosted profits by opening factories in Mexico, where workers are paid about $4 to $5 a day. Automakers, clothing manufacturers and computer and electronics companies, in particular, have used Mexico as a platform for fast, cheap and flexible production facilities. Levi Strauss & Co., once a big player in El Paso’s dominant textile industry, has moved most production overseas.

The Points below are with reference to Mexico and NAFTA

The government of Mexico regarded NAFTA as a fundamental element in its overall economic strategy. This strategy was — and continues to be — the IMF and World Bank recipe: growth based on exports and the stimulus of foreign investment. Proponents of NAFTA promised that it would generate more jobs and reduce poverty. Mexican exports did indeed grow enormously, and there was a huge inflow of foreign investment — but no significant economic growth was achieved, and neither more nor better jobs were created.

Foreign trade: Exports increased by over 300% under NAFTA, from U.S.$51.9 million in 1993 to $160.7 million in 2002. During the first nine years of NAFTA, Mexico’s accumulated exports exceeded a trillion dollars ($1,086,285,300,000). These exports were mainly manufactured goods. Since the inception of NAFTA, Mexico has built up a $141 billion accumulated trade surplus with the United States.

A it is an exaggeration to say that Mexico has become a manufacturing export power because of NAFTA. In reality, in the NAFTA period, 54% of exports have been petroleum or maquiladora production — and these exports have not generated general growth in the Mexican economy. Also significant is that most of the inputs in Mexico’s exports are imported goods.

The Mexican economic strategy is based on the idea that exports will be an engine of growth for the economy, but that has not happened, mainly because the export companies are not connected to the rest of the country through national productive linkages. Instead, they are like an island that is disconnected from the rest of the economy and generating hardly any new jobs

NAFTA’s real purpose: Under the NAFTA rules on trade and investment, conditions are created so that companies find it easier to maximize their profits, but without any requirement to contribute to the host country’s development. In an export-oriented economy, under NAFTA, the interests of the exporting country are ignored. A foreign company can set up Mexico and produce goods for export in a way that does little or nothing to promote overall economic or employment growth

Foreign investment: Direct investment in Mexico has increased under NAFTA — totaling some U.S.$153 billion up to 2002 — but it is not well integrated into the country’s national productive chains and therefore has not produced the promised multiplier effects in terms of growth and employment. It has been mainly concentrated in the manufacturing export sector, in banking, and in commerce. There was virtually no foreign investment in the Mexican countryside, just a bare 0.25% during the entire NAFTA period. So the gap between Mexico’s poor and marginalized areas and those that enjoy greater wealth has been widened by NAFTA, not narrowed

Employment: The negotiators and promoters of NAFTA promised that it would create more and better jobs. They now speak of “thousands” of jobs having been generated by the export sector. There is no doubt that large exporters and the maquiladoras have hired more workers, but conversely, many jobs have been lost by the former domestic suppliers to those exporters

During the first nine years of NAFTA, 8,073,201 new jobs were created in the country — but that number was 46.6% lower than was needed to provide work for all the people aged 15-64 entering the workforce. In addition, most of these new jobs were “bad” jobs, with 55% of them not providing even the minimal benefits required by law, such as social security, 10 days’ vacation a year, and a Christmas bonus. These are general data, of course, and are influenced by many factors besides NAFTA, but they do demonstrate the failure of the country’s basic economic strategy — of which NAFTA is a key element — to generate growth and employment

Productivity has increased by 53% in the non-maquiladora manufacturing sector during the NAFTA years, which would be a welcome improvement if the benefits of the higher productivity were shared with the workers. But in fact, during the nine years of NAFTA, labour costs (mainly wages and benefits) declined by 36% — meaning that the workers produced 53% more per hour of work, but at a 36% less cost for employers

NAFTA’s impact on the agricultural sector is even more dramatic than critics had predicted. Imports of corn and oilseeds have increased from 8.8 million metric tons a year in 1993 to 20.3 million metric tons in 2002. The situation with meat, tropical fruits and other products is similar. These imports have replaced national products, increasing rural unemployment. Statistics indicate that Mexico is losing its food sovereignty and instead has increased its dependency on imports, which has generated a major outflow of foreign currency. The supposed advantages for consumers based on greater access to less expensive, imported food products turned out to be pure rhetoric. From 1994 to 2002, the prices the goods in the basic food basket increased 257%, while prices paid to agricultural producers rose only 185%

Trade relations between Mexico and the United States and Canada are characterized by numerous inequalities that explain much of NAFTA’s negative impact on the agricultural sector. These include asymmetries existing even before NAFTA, such as differences in levels of technology and higher production costs for energy and other inputs, problems in the negotiations, including Mexico’s failure to exclude sensitive agricultural goods and the lack of any provisions to review the accord, and problems after the signing of the agreement, particularly the passage of the 2002 U.S. Farm Bill, which dramatically expanded the already unequal levels of subsidies given to U.S. farmers

Conclusion: NAFTA has not fulfilled the objectives and expectations set forth by its promoters. It has not even achieved significant economic growth — at least, not stable, sustained and sustainable growth. And it certainly has not brought social justice. Even the low growth rate that has occurred has come at the cost of massive environmental degradation and the depletion of natural resources. Instead of creating more and better jobs, NAFTA has accelerated the disintegration of national production chains and the denationalization of the country’s productive structure. Nearly all the banks in Mexico and most of the large export companies are now owned by foreigners. There have been few winners and many losers. NAFTA has created a few islands of economic success — very successful in terms of profits for their owners and investors — but the economy as a whole has not benefited.

1-12, Source:1. Corbacho, Ana and Gerd Schwartz. “Mexico: Experiences with Pro-Poor Expenditure Policies,” IMF Working Paper, January 2002.

2. INEGI web site (inegi.gob.mx)

3. Arroyo, Alberto. Impacts of the North American Free Trade Agreement in Mexico: Lessons for the Free Trade Area of the Americas Negotiation. (English edition) Philadelphia: American Friends Service Committee, May 2003.

4. Ackerman, Frank, Timothy A. Wise, Kevin P. Gallagher, Luke Ney, and Regina Flores. Free Trade, Corn, and the Environment: Environmental Impacts of U.S.-Mexico Corn Trade Under NAFTA, Global Development and Environment Institute, Working Paper No. 03-06, Tufts University, June 2003.

5. World Bank, Memorandum of the President of the International Bank for Reconstruction and development and the International Finance Corporation to the Executive Directors on a Country Assistance Strategy Progress Report of the World Bank Group for the United Mexican States, Report No. 22147-ME.

6. Bronfenbrenner, Kate. Uneasy Terrain: The Impact of Capital Mobility on Workers, Wages and Union Organizing, Report to the U.S. Trade Deficit Review Commission, September 6, 2000, www.ustdrc.gov

7. Hemispheric Social Alliance. Lessons from NAFTA: The High Cost of “Free Trade.” Ottawa: Canadian Centre for Policy Alternatives, 2003.

8. Gallagher, Kevin, P. NACEC and Environmental Quality: Assessing the Mexican Experience. Greening NAFTA: The Experience and Prospects of the North American Commission for Environmental Cooperation. John Knox and David Market (eds). Palo Alto: Stanford University Press, 2002.

9. Harry Dunphy, Mexico Behind Canada despite NAFTA, Dec 2003

10. Review by Sarah Anderson and John Cavanagh Institute for Policy Studies, 18 December, 2003

11. Review by Mark Bourrie

12. Dawn Gilbertson and Jonathan J. Higuera, Decade of NAFTA brings pains, gains

13. World Bank Report (14. U.S. Embassy in Mexico Report, Dec, 2003)

NAFTA & Food Regulation Agencies

In order to better the efficiency of the regulatory system on food, the countries of the North American Free Trade Agreement (NAFTA), Canada and Mexico have consolidated their food safety agencies. Each country claims their overall goal is food safety, but many critics see many variables in the equation that cause challenges or see complexity in the new systems. Canada’s government made the switch to consolidate its agencies under the Canadian Food Inspection agency (CFIA) because it needed a system that was more cost-efficient.

In Mexico the food regulatory system has increasingly grown out of a need for an economic market growth, and for the push towards democratization of a severely corrupted government. The two agencies under the Mexican governments plan for democratization consolidated, and have increased stringency in laws resembling those of Codex Alimentations Committee.

Due to the cooperation between the NAFTA nations who are based on trade incentives for economic growth, polices for the sanitary and healthy products has changed and conflicts of interests have grown out of economic vs. food safety. Through the political reorganization that has happened within the Mexican nation transparency, legitimacy, and reform policies have become more apparent to the Mexican and international body since the arrival of President Vicente Fox.

The United Republic of Mexican States’ food regulatory system is conferred upon two main departments: Secretaria de Agricultura, Ganeria, Desarollo Rural, Pesca y Alimentacion (SAGARPA) and Secretaria De Salud (SSA). These two government departments are elected by the President of Mexico and attain legitimacy through the enforcement, and development of regulatory policies. If disputes arise out of contamination violations in the foods or products due to failure in compliance of Mexican laws the judicial branch will render decision of adequate punishments for the accused industry (Leyes y Secretaria, 4 June 2002). The Mexican food safety system has become more consolidated and strict due to the new coming Presidents’ push to correct Mexico’s previous problems by promoting the democratization of the nation and furthering economic development. The characteristics of the food safety system of Mexico include health promotion, transparency of information, science-based decision-making, and market-induced norms to establish food protection laws (Practicas de Higiene Y Sanidad en Preparacion de Alimentos, 1 June 2002).

For many decades, Mexico’s safety regulation agencies and policies have had difficulty in enforcing the ethics of safety to the businesses throughout the nation. Politics, economy and U.S. standards of food safety have all been key elements in creating a new Mexico that appears to show a promising future.

The laws in Mexico are numerous. Prior to sharing the ideas of the United States laws, Mexico had its own but now more and more they are matching the standards of the U.S. It used to be that each food had its own law of how it should be shipped or the attention it should receive. That is still true but since the collaboration to make SAGARPA, all foods now carry a high value of importance. However, all these laws and agencies are having difficulty enforcing the health act to businesses. In theory, the laws ask for strict procedures that should be followed, in practice the constant pressure of gaining quick profits put health safety as second. Such as in the controversies that have occurred in pesticides and genetically engineered seeds

In April of 1997 Canada created a centralized food safety agency called the Canadian Food Inspection agency (CFIA). Intended to be independent from the government CFIA was created for budgetary and efficiency reasons. Before CFIA $430 million in government dollars was spread amongst the fragmented agencies of Canada that included the Agriculture and Agri-food Canada, Industry Canada, Health Canada, Fisheries and Oceans Canada, and Environment Canada (Prince, 2000, 219). It was the goal of the Canadian government for CFIA to cut the budgetary spending through one centralized food inspection agency as well as having the agency promote trade and commerce

The result of the conflicting duties of CFIA resulted in an agency that is partly a government department and partly an independent firm.

Though the other agencies remained in existence, the Canadian Food Inspection Agency became the core agency in food safety with a partnership with Health Canada and Agriculture and Agri-Food Canada. Due to the creation of CFIA the other agencies had more limited responsibilities than before. Health Canada’s responsibilities included the research and creation of laws for food safety and other Canadian health issues in general, while it was the Canadian Food Inspection Agency’s responsibility to oversee the public’s safety as well as to monitor the compliance of industries and enforce the laws

Though Canada succeeded in consolidation of it’s food safety system, its food safety legislation still remains in a fragmented state

Canada and Mexico have been positive examples of the merits of consolidation to the food safety system. Though neither country has committed to a single conventional agency, their respective changes have gone towards the direction of correcting the fragmentation of each of their systems

Canada has been able to increase its food safety system’s efficiency, and cut its budgetary spending by millions of dollars. Mexico has achieved improved regulation in food safety along with encouraging economic growth in its country

Both North American NAFTA countries have shown that consolidation of their fragmented programs works for their countries. Whether the third member of NAFTA follows in these two countries is up to the United States. Just because consolidation benefited these two nations does not mean that consolidation is the answer for every countries’ food safety programs. What is certain is that the United States has efficiency problems when dealing with food safety just as Canada and Mexico did, and consolidation may be the answer to those problems

NAFTA – Future — the Road Ahead

Today, the Latin American countries are too young to think of giving up their sovereignty, which might change in the following 50 years as happened in Europe.

This is fundamental in determining the future for NAFTA.

Will it remain as a trade agreement or will it go further?

Will NAFTA have a common currency?

To go further, NAFTA must first establish common economic, environmental and social policies as well as permit freedom of immigration.

This is possible but difficult when there are similar economic, social and cultural levels, such as happened in Europe, when this is not the case, it becomes much more difficult.

In Latin American countries, the levels of education of large sectors of society do not permit them to adopt new technologies, which increase their productivity at the same rate as in the more developed societies, therefore, this will require currency adjustments that would not be possible if they had a common currency, this might change when the level of education reaches the same standards throughout the region.

What concerns manufacturers across North America is not so much greater competition within the continent, but what many perceive as unfair competition from Asian countries, particularly China.

The response from the Canadians has been to build on the image of made-in-Canada quality. Since the 1990s, Canadian manufacturers in many industries, not just wood manufacturing, have built success on a low dollar, which has at the same time hindered the ability and the willingness of U.S. manufacturers to increase their presence in the Canadian market. However, as the Canadian exchange rate climbs to between 75 and 80 cents, Canadian manufacturers have to adopt a new strategy.

NAFTA In Numbers (Report by U.S. Embassy in Mexico, 2003)

When NAFTA implementation began eight years ago, it created the world’s largest free trade area, which now links more than 406 million people producing more than $11 trillion worth of goods and services. Since 1994, the total volume of trade between the three NAFTA parties has expanded from $109 billion to $622 billion in 2000, an increase of 109%. Each day the NAFTA parties conduct nearly $1.7 billion in trilateral trade.

Mexico is our 2nd largest trading partner (after Canada). Mexico exported $139 billion to its NAFTA partners in 2001, 225% more than in 1993, the year prior to the start of NAFTA implementation. Over the past seven years, export growth has contributed to more than half of real GDP growth in Mexico.

Since 1994, Mexico’s annual average capital inflow is three times the annual amount received in the seven years prior to the Agreement, and the annual cumulative foreign direct investment from 1994 to 2001 reached 111.9 billion.

In Mexico, the export sector is the leading generator of job creation: more than half of the new jobs created between 1994 and 2000 were related to export activity. Export-oriented manufacturing jobs pay wages nearly 40% higher than the rest of the manufacturing industry.

Trade liberalization has made goods and services more accessible. By 2003, nearly all trilateral trade will be duty free, further spreading the benefits of free trade.

An issue for all: NAFTA’s Chapter 11

This “investor-state” clause gives foreign investors the right to sue governments directly for compensation for immediate or even future loss of profits caused by public interest laws. Chapter 11 is a serious threat to the ability of governments at all levels to pass laws or adopt policies that serve the public good.

Corporations seeking damages under the investor-state clause can take their claims to special NAFTA tribunals, whose hearings are usually held in secret, with no obligation to allow participation by private citizens, NGOs, or even local government officials. Such tribunals supersede the authority of national courts — and their rulings cannot be appealed.

So far, 27 charges by corporations against governments have been filed under Chapter 11. Both the Canadian and U.S. governments have been sued over bans on hazardous gasoline additives. The Canadian government settled the case involving MMT, a nerve toxin, by paying the U.S.-based Ethyl Corporation $13 million in compensation. Canada’s Methanex Corporation is demanding $970 million in compensation for a California ban on MTBE, a chemical that can cause cancer that was leaching into local groundwater. The U.S. Metalclad Company successfully sued Mexico over a local community’s refusal to allow the company to open a toxic-waste dump without the necessary environmental precautions. In each of these cases, the public danger posed by the banned chemicals or environmental conditions was not a consideration, only the companies’ loss of actual or potential profits.

There is also evidence that companies are using the threat of investor-state charges to discourage governments from even considering the passage of new public-interest laws. Lobbyists for the U.S. tobacco giants Philip Morris and R.J. Reynolds threatened such a suit when the Canadian government proposed to legislate plain packaging for cigarettes, and the legislation was quickly withdrawn. Similar threats in recent years have reportedly scuttled planned Canadian environmental and public-safety laws on pesticides, pharmaceuticals, and other chemicals.

Despite the inhibiting effects of Chapter 11, however, none of the three NAFTA governments has tried to eliminate or even modify this clause. On the contrary, their efforts continue to extend it to other countries in the hemisphere through the proposed FTAA.

NAFTA Goal Fulfillment:

Ten years after the signing of the North American Free Trade Agreement, the promise of a greatly improved environment along the 1,950-mile U.S.-Mexico border is still largely unfilled.

Before NAFTA was approved, experts told U.S. lawmakers that it would take $5 billion to $6 billion to improve the quality of the border environment. But as of June 18, the Border Environment Cooperation Commission (BECC) has certified only $1.7 billion worth of capital projects along the U.S.-Mexico border

Although today most of El Paso’s colonias have potable water, an estimated 3,500 residents must still haul water for drinking, bathing and washing clothes.

Some believe the NAFTA side agreements that created BECC and other agencies intended to protect the environment have failed precisely because those responsible for administering them have no enforcement powers.

Amelia Simpson, director of the Border Environment Justice Campaign, cited the case of U.S. battery recycling company that left 7,000 pounds of lead at its Tijuana plant when it went out of business. Tests on 20 children in the community showed that all of them had high levels of lead in their blood, which can stunt growth and lead to physical problems such as hearing loss. Yet the organization created through NAFTA to monitor environmental problems — the Commission for Environmental Cooperation — only issued a 1998 report documenting the problem, followed by another report last year. “There’s no enforcement mechanism,” Simpson said. Documentation “is the extent of their mandate.”

In addition to BECC and the Commission for Environmental Cooperation, NAFTA’s side agreements created the North American Development Bank to help deal with remediation. The NADBank was created specifically by the governments of the United States and Mexico to finance projects.

Environmental groups, such as the Tucson-based Sky Island Alliance, note that NAFTA has failed to stem the flow of undocumented immigrants into the United States. And the U.S. response to the problem — beefing up border security by having hundreds of Border Patrol agents in off-road vehicles — is increasingly hurting the desert ecology, said David Hodges, the alliance’s executive director.

NAFTA – Major Milestones

December: President George H.W. Bush, Mexican President Carlos Salinas de Gortari and Canadian Prime Minister Brian Mulroney sign NAFTA.

September: Operation Hold the Line begins as way to stem illegal immigration.

November: U.S. Congress approves the trade agreement.

January: NAFTA takes effect.

December: In Mexico, the peso is devalued and a recession begins. An estimated 1 million Mexicans lose jobs during coming recession.

United States rescues Mexico’s economy with a $20 billion aid program, part of a $51 billion international aid plan to shore up Mexico’s banks.

March: Mexican government announces austerity plan including layoffs and tax and price increases.

April: Yahoo shares triple in first day of trading, an early sign of the dot-com boom.

November: President Clinton is re-elected.

June: U.S. jobless rate falls to 4.8%, the lowest since 1973. Census reports more than a million Mexican immigrants make up 28% of the U.S. foreign-born population in 1997.

U.S. trade deficit is the biggest in a decade.

Virtually all U.S.-Canada trade is tariff-free, with exception of a few products.

March: Dow Jones industrial average tops 10,000.

July: The Dow tops 11,000.

Undocumented immigrant apprehensions peak.

March: Nasdaq peaks at 5,048.

July: Vicente Fox is elected president of Mexico, ending 71 years of one-party rule.

November: George W. Bush is elected U.S. president.

December: Nasdaq ends year at 2,470, ending the tech-stock mania.

Citibank acquires Banamex for $12.5 billion, creating Mexico’s largest banking group.

March: U.S. recession begins, ending a record 10-year economic expansion.

September: Terrorists attack the World Trade Center and the Pentagon; Dow falls 15% in the first week after markets reopen.

Congress renews Trade Promotion Authority for the executive office. It reauthorizes the administration’s authority to negotiate comprehensive trade agreements that Congress can only approve or reject but not amend.

December: Dow and Nasdaq complete third consecutive year of annual losses. U.S. unemployment rate hits 6%, highest level since 1994.

U.S. trade deficit with Mexico reaches $37.2 billion.

Negotiations for the Free Trade Area of the Americas pact are scheduled to begin, with Mexico serving as host country.

January: Virtually all tariffs between Mexico and Canada are eliminated.

February-April: U.S. prepares for and launches war against Iraq. Oil prices reach levels not seen since 1991 Persian Gulf war.

All tariffs affecting agricultural trade between the United States and Mexico are scheduled to end.

All tariffs on goods traded among NAFTA partners are scheduled to have been eliminated.

Consolidated Bibliography:

A. Print Sources – Underwood Law Library

North American Free Trade Agreement between the Government of the United States of America, the government of Canada, and the government of the United Mexican States. (GPO, 1993 -). 6 vols. [4th Fl. KDZ 944.A41992 A2 1993.].

The North American Free Trade Agreements, ed by Holbein, James R. And Musch, Donald J., (Oceana, 1993 -). loose-leaf: Treaties, vols.. 1-4; Commentary, vols. 1-2; Dispute Settlement, vol. 1. [4th Fl. KDZ 944.A41992 L39]

NAFTA: Final Text, Summary, Legislative History and Implementation Directory, ed. By Holbein, James R. And Musch, Donald J. (Oceana, 1994) [KDZ 944.A41992]

International Legal Materials (3rd Fl. Law Periodicals) has published the text at 32 I.L.M. 289 (1993) (table of contents, preamble, parts I-III) and 32 I.L.M. 605 (1993) (parts IV-VII, annexes). Side at 32 I.L.M. 1480 (1993) (Environmental Cooperation); 32 I.L.M. 1502 (1993) (Labor Cooperation) and 32 I.L.M. 1520 (1993) (Emergency Measures).

B. Electronic Sources – Commercial Databases & the Web

LexisNexis Congressional – From the Underwood Law Library website at http://library.law.smu.edu, click on Research Databases, select Congressional Information from list of contents and click on LexisNexis Congressional.

Arnold & Porter Legislative History – NAFTA Implementation Act – Complete history of PL 103-182 prepared by law firm. Database Identifier: NAFTA-LH. Or from Directory page o WESTLAW.com, click on U.S. Federal Materials®Legislative History & Tracking®Legislative History – Arnold & Porter Legislative History for Specific Acts®NAFTA.

World Tradelaw.net:

http://www.worldtradelaw.net/nafta/index.htm

NAFTA Secretari at: http://www.nafta-sec-alena.org/english/index.htm- Full Text of Treaty in English.

National Law Center for Inter-American Free Trade:

http://www.natlaw.com/treaties.htm. Includes the full text of the Treaty in English and Spanish, as well as other NAFTA-related documents.

Selected Reference Sources – Print & Electronic

Appleton, Barry. Navigating NAFTA: A Concise User’s Guide to the North American Free Trade Agreement. (Carswell, 1994.) [HF 3211.A66 1994. Law Storage].

Metz, Allan. A NAFTA Bibliography. (Greenwood Press, 1996.) [KDZ 944.A12M48 1996. Law Classified].

Rosenberg, Jerry M. Encyclopedia of the North American Free Trade Agreement, the New American Community and Latin-American Trade. (Greenwood Press, 1995) [Law Reference, 2nd Fl. HC 94.R668 1995].

Index to Foreign Legal Periodicals. (1985 -). Indexes legal periodical articles from countries other than the U.S. And U.K. Commonwealth countries. Available from Underwood Law Library Web site; click on Research Databases, and select from list. (Accessible only from the Law School Quad.)

Selected Treatises & Analytical Materials at Underwood Law Library

Abbott, Frederick M. Law and Policy of Regional Integration: the NAFTA and Western Hemispheric Integration in the World Trade Organization System. (Kluwer, 1995) [4th Fl. KDZ 944.A41992 A73 1995].

Ackerman, Bruce A. Is NAFTA Constitutional? (Harvard University Press, 1995. [4th Fl. KDZ 944.A41992 A74 1995.

Appleton, Barry. Navigating NAFTA: A Concise User’s Guide to the North American Free Trade Agreement. (Carswell, 1994). [Law Storage HF 3211.A66 1994].]

BNA International Trade Reporter (Bureau of National Affairs, 1984 -). [K 3943.A13 I582]. Includes a section on NAFTA with news about amendments, court decisions, etc.

Blank, Stephen and Haar, Jerry. Making NAFTA Work: U.S. Firms and the new North American Business Environment. (North-South Center Press, University of Miami, 1998). [Law Storage HF 1746.B53 1998]

Cameron, Maxwell A. And Tomlin, Brian W. The Making of NAFTA: How the Deal Was Done. (Cornell University Press, 2000). [Law Storage HF 1746.C33 2000].

Eaton, David W. Transformation of the Mexican Maquiladora Industry: The Driving Force Behind the Creation of a NAFTA Regional Economy. (National Law Center for Inter-American Free Trade, 1997). [Law Storage HD 9734.M42 E381997].

Folsom, Ralph H. NAFTA in a Nutshell. (West Group, 1999). [RESERVE KDZ 944.F653 1999].

Folsom, Ralph H. And Folsom, W. Davis, eds. NAFTA Law and Business. (Kluwer Law International, 1999 -). [4th Fl. KDZ 944.A4 1992 N35]

Glick, Leslie Alan. Understanding the North American Free Trade Agreement: Legal and Business Consequences of NAFTA. (Kluwer Law & Taxation Pubs., 1993). [4th Fl. KDZ 944.A4 1992 G58 1993]

Hastings, Paul. North American Free Trade Agreement: Summary and Analysis. (Matthew Bender, 1993). [4th Fl. KDZ 945.N67 1993]

Hufbauer, Gary Clyde, et al. NAFTA and the Environment: Seven Years Later. (Institute for International Economics, 2000). [Law Storage HF 1746.N3312 2000]

Orme, William A. Understanding NAFTA: Mexico, Free Trade, and the New North America. (University of Texas Press, 1996). [Law Storage HF 1746.O75 1996].

Norton, Joseph J. And Bloodworth, Thomas L. NAFTA and Beyond: A New Framework for Doing Business in the Americas. (M. Nijhoff, 1995). [4th Fl. KDZ 944.A41992 N335 1995].

Rockenbach, Leslie J. The Mexican-American Border: NAFTA and Global Linkages. (Routledge, 2001). [In processing.]

Weiler, J.H.H., ed. The EU, the WTO and the NAFTA: Towards a Common Law of International Trade? (Oxford University Press, 2000). [4th Fl. K 3943.E9 2000].

Selected Periodicals at Underwood Law Library

Americas Trade (Americas Trade, 1997 -). (formerly Inside NAFTA)

BNA International Trade Reporter: Current Reports. (Bureau of National Affairs, 1984 -). [4th Fl. KF3943.A13 I582].

Inside NAFTA (Inside Washington Publishers, 1994-1997). (Continued by Americas Trade).

MB: The Magazine of the NAFTA Marketplace (Hemisphere Publishers’ Group, 1999 -).

NAFTA Arbitration Reports (Cameron May Conferences). [On Order].

NAFTA Digest (Office for the Study of U.S.-Mexico Trade Relations, Laredo State University, 1992 -).

NAFTA, Law and Business Review of the Americas (Kluwer Law International, 1995 -).

The NAFTA Watch (Commerce Clearing House, 1994).

North American Free Trade & Investment Report (World Trade Executive, 1995 -).

Lexis and Westlaw (subscription required)

World Wide Web

The North American Integration and Development Center:

http://naid.sppsr.ucla.edu/

National Law Center for Inter-American Free Trade:

http://www.natlaw.com/

NAFTA Connect

http://www.naftaconnect.com/naftaconnect.archivos/other.html

Western Hemispheric Trade Information Center

http://www.tamiu.edu/coba/usmtr/- Includes links to sources of trade information, including NAFTA, for multiple countries in English, Spanish, Portuguese and French, as well as numerous news sources covering trade issues.

North American Institute:

http://www.northamericaninstitute.org/- This non-profit organization addresses common concerns resulting from the economic integration of North American countries following the implementation of NAFTA. The site provides relevant information regarding such shared concerns as the environment, education, labor, immigration and social welfare.

Canadian Embassy:

http://www.canadianembassy.org/homepage/index.html

Canada Customs & Revenue Agency:

http://www.ccra-adrc.gc.ca/menu-e.html.

Mexican Embassy:

http://www.embassyofmexico.org/english/

NAFTA Works:

http://www.naftaworks.org/- Representative office of Mexico’s Ministry of the Economy, promoting export and foreign investment in Mexico, assisting companies doing business in Mexico and monitoring Mexico-U.S. trade relations.

U.S. Customs Service:

http://www.customs.ustreas.gov/.

Other Reference Sources

Eaton, David W. Transformation of the Mexican Maquiladora Industry: The Driving Force behind the Creation of a NAFTA Regional Economy. (National Law Center for Inter-American Free Trade, 1997). [Law Storage HD 9734.M42 E381997].

Barry, Tom. Crossing the Line; Immigrants, Economic Integration, and Drug Enforcement on the U.S. – Mexico Border with Harry Browne and Beth Sims Interhemispheric Resources Center Press, 1994. Looks at cross-border problems presented by the northward migration stream, the maquila economy, the booming narcotics trade, and the infrastructure crisis.

Dwyer, Augusta. On the Line: Life on the U.S.-Mexican Border. (1994) Based on thorough first-hand research by a Canadian reporter. Sections on the history of the maquiladoras, women workers issues, attempts to organize, health, safety, and environmental issues. Still essential though a bit dated.

Economic Policy Institute publishes frequent reports on the impact of free trade on North Americans. See their NAFTA at Seven reports. www.epinet.org

Free Trade and Economic Restructuring in Latin America a NACLA Reader ed. By Rosen & McFadden.

Articles from North American Congress on Latin America give broad background for what is happening in the maquiladoras by analyzing the effects of neo-liberalism all across Latin America.

Hathaway, Dale. Allies Across the Border; Mexico’s ‘Authentic Labor Front’ and Global Solidarity (south End Press, 2000) Good background on Mexico in the global economy and history of one of Mexico’s most progressive and solidarity-minded unions.

MacArthur, John R. The Selling of Free Trade; NAFTA, Washington and the Subversion of American Democracy (Hill & Wang, 2000). Expose of how NAFTA got passed.

Martinez, Oscar. Border People. (University of Arizona, 1994) The sociological analysis is a little dull, but if you skip over that and go to the stories based on interviews, you get a good multifaceted view of the border culture and issues from lots of different points-of-view.

LaBotz, Dan. Mask of Democracy: Labor Suppression in Mexico Today. (South End Press, 1992). Overview on labor law and rights and brief history of labor movement in Mexico. Shows how charro unions and company unions all work in tandem with the PRI and corporations to keep labor down. Detailed case histories but somewhat dated.

La Botz, Dan. Democracy in Mexico. (South End Press, 1995) This book puts the struggle of workers on the northern border and of campesinos at the southern border in a broader context. Good summary of modern development of the PRI-linked unions and current struggles to break free.

Langewiesche, William. Cutting for Sign. (Vintage, 1995) More focus on immigration and drugs than labor. Gives some interesting insights into shifting cultural allegiances and the underside of life at the Border. Interesting sections on organizational work of Maria Torres and Ed Krueger.

Mexican Labor News and Analysis, ed by Dan La Botz bimonthly news magazine on labor and economic policy in Mexico. http://www.igc.apc.org/unitedelect/alert.html.

Kamel, Rachael & Anna Hoffman. The Maquiladora Reader; Cross-Border Organizing Since NAFTA (American Friends Service Committee, 1999, $14.95).

PeA±a, Devon G. The Terror of the Machine; Technology, Work, Gender & Ecology on the U.S.-Mexico Border (Center for Mexican-American Studies, 1997)

Public Citizen Global Trade Watch. NAFTA Report Card (Dec. 1998) at http://www.citizen.org/pctrade/nafta/reports/5years.htm. Comprehensive report on NAFTA at five years. See other NAFTA information at this web site.

Ross, John. The Annexation of Mexico; From the Aztecs to the IMF. (Common Courage Press, 1998) Very powerful and well-written account by American journalist who has traveled widely and is very familiar with Mexico’s history and contemporary social movements. Looks at U.S.-Mexico relations from an historical and economic perspective and Mexican opposition to current U.S. “annexation” strategy.

Sims, Beth. On Foreign Soil; Government Programs in U.S.-Mexico Relations (Interhemispheric Resource Center Press, 1993) A look at U.S. Mexico Relations in the context of free trade, military aid and the war on drugs.

Sims, Beth. Workers of the World Undermined; American Labor’s Role in U.S. Foreign Policy. (South End Press, 1991) A very critical look at the AFL-CIO’s foreign policy and complicity with CIA and corporate interests in Latin America.

Urrea, Luis Alberto. By the Lake of Sleeping Children. (Anchor, 1996) A hard and sometimes elegiac portrait of daily life in the colonia inside the garbage dump in Tijuana. This is one that could create a strong impression for people who can’t actually go there. Similar in many ways to conditions in some of the poorest colonias in Tamaulipas.

Williams, Heather L… Social Movements & Economic Transition; Markets and Distributive Conflict in Mexico. (Cambridge University Press, 2001) Examines patterns of political mobilization among groups in Mexico whose livelihoods have been threatened by neoliberal policies.

Bener’a, Lourdes. “The Mexican Debt Crisis: Restructuring the Economy and the Household.” Unequal Burden. Ed. Lourdes Bener’a and Shelley Feldman. Boulder: Westview Press, 1992.

Bener’a, Lourdes. “Subcontracting and Employment Dynamics in Mexico City.” The Informal Economy: Studies in Advanced and Less Developed Countries. Ed. Alejandro Portes, Manuel Castells and Lauren Benton. Baltimore: Johns Hopkins University Press, 1989.

Buchanon, Patrick J. (Nov. 7, 1993). America First, NAFTA Never [Online]. Available: http://www.buchanan.org/never.html[1997, December 6].

DePalma, Anthony. “Mexicans Fear for Corn, Imperiled by Free Trade.” The New York Times. July 12, 1993.

Garcia, Arnoldo. (Summer 1996) NAFTA and Neoliberalism: The Deepening Mexico Crisis [Online]. Available: http://www.nnirr.org.nnirr/networknews/sum96/mexico.html [1997, Nov 20].

Golden, Tim. “A History of Pollution in Mexico Casts Clouds Over Trade Accord.” The New York Times. August 16, 1993.

Lemco, Jonathan and Robson, William. Ties Beyond Trade: Labor and Environmental Issues Under the NAFTA. Canadian – American Committee. Toronto: 1993.

Marinez, Elizabeth and Arnoldo Garcia. (No date). What is “Neo-Liberalism”? [Online]. Available: http://www.corpwatch.org/trac/corner/glob/neolib.html[1997, Nov 20]. (June 27-29, 1997). NAFTA’s Failure to Deliver [Online]. Available:

http://www/coha.org/pressr/naftapr/html[1997, Nov 20].

Nelan, Bruce W. (April 4, 1994). Days of Trauma and Fear [Online]. Available:

http://pathfinder.com/@@N0pVEAUAjt…tic/1994/940404/940404.mexico.html[1997, Nov 20].

Perlo, Victor. (March 4, 1995). The Rape of Mexico [Online]. Available:

http://www.hartford-hwp.com/archives/46/031.html[1997, Nov 20].

The President, the peso, the market and those Indians.” The Economist 24 Dec 1994: 43.

Roberts, Bryan. “Employment Structure, Life Cycle, and Life Chances: Formal and Informal Sectors in Guadalajara.” The Informal Economy: Studies in Advanced and Less Developed Countries. Ed. Alejandro Portes, Manuel Castells and Lauren Benton. Baltimore: Johns Hopkins University Press, 1989.

Russell, Philip. The Chiapas Rebellion. Mexico Resource Center. Austin: 1995.

Shadows of Tender Fury: The Letters and Communiques of Subcomandante Marcos and the Zapatista Army of National Liberation. Monthly Review Press. New York: 1995.

Canada. 2002. Food and Beverages Regulations In Mexico. Web site: http://atn-riae.agr.ca/info/latin/e1678.htm

Economist. 2002. Economist.com / Country Briefings: Mexico. Web site: http://www.economist.com/countries/Mexico/profile.cfm?folder=Profile-FactSheet

HHS News. 2001. U.S. And Mexico Share Vital Food Safety Information. Web site: http://www.hhs.gov/news/press/2001pres/20010904.html

Lembke, Magnus. 1998. Interest Representation and National Peasant Alliances: A study of the permanent agrarian congress and the Mexican state. Stockholm University: Institute of Latin American Studies.

Organic Consumer Association. 2001. U.S. Dumping Genetically Engineered Corn in Mexico. Web site: http://www.organicconsumers.org/corn/USDumpingGE.cfm

Wright, Angus. 1990. The Death of Ramon Gonzalez: The modern agriculture dilemma. Web site: http://www.sarep.ucdavis.edu/NEWSLTR/v5n1/sa-14.htm

HOW TO RESEARCH NAFTA ISSUE: SELECTIVE BIBLIOGRAPHY

NAFTA texts

32 International legal materials 289 (1993). K9.N87 LAW/FOREIGN-International

North American Free Trade Agreements (James R. Holbein & Donald J. Musch, eds.).

IN PROCESS

WESTLAW: NAFTA

LEXIS: INTLAW;NAFTA and related documents. http://www.sice.oas.org/tradee.asp#NAFTA

NAFTA legislation, drafting history, and subsequent history

North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057 (1993). United States Statutes at Large. LAW/STACKS KF50.A2

Bernard D. Reams, Jr., and Jon S. Schultz, The North American Free Trade Agreement (NAFTA): documents and materials including a legislative history of the North American Free Trade Agreement Implementation Act: Public Law 103-182 (1994). KDZ944.A41992R43 1994 LAW/FOREIGN-International

Office of the U.S. Trade Representative, NAFTA works for America: administration update on the North American Free Trade Agreement, 1993-1998 (1999). ANDERSON/U.S. DOCUMENTS PREX 9.2:B 76

President’s comprehensive review of the NAFTA: hearing before the Subcommittee on Trade of the Committee on Ways and Means, House of Representatives, 105th Cong., 1st Sess., September 11, 1997 (1999). ANDERSON/U.S. DOCUMENTS Y 4.W 36:105-58

Report card on NAFTA: Hearing before the House Subcommittees on International Economic Policy and Trade of the Committee on International Relations, 105th Cong., 1st Sess. (1997).

ANDERSON/U.S. DOCUMENTS

4.IN 8/16:N 81/4

President William Jefferson Clinton, Study on the operation and effects of the North American Free Trade Agreement (1997). LAW/DOCUMENTS

PREX 1.2:N 82/3

GATT, Uruguay Round

Final agreement and legislation

33 International legal materials 1125 (1994). K9.N87 LAW/FOREIGN-International

LEXIS: INTLAW;GATT

Uruguay Round Agreements Act, Pub. L. 103-465, 108 Stat. 4809 (1995). United States Statutes at Large. LAW/STACKS KF50.A2 http://www.wto.org/english/docs_e/docs_e.htm” WTO: Official Documents and Legal Texts. http://www.wto.org/english/docs_e/docs_e.htm. WTO/GATT. http://www.sice.oas.org/tradee.asp#WTO/GATT

General Agreement on Tariffs and Trade (Organization), Basic instruments and selected documents. ANDERSON/GENERAL COLL K4602.B37x Suppl

Stephen Zamora & Ronald A. Brand, eds., Basic documents of international economic law (1990) [also available on LEXIS: INTLAW; BDIEL]. LAW/FOREIGN-International REF

JX1252.B37 1990

Treaty resources

United States treaties and other international agreements. LAW/FOREIGN-International JX236

1950.A22

Treaties and other international acts series. LAW/RESERVES JX235.9.A32

WESTLAW: USTREATIES

United States treaty index: 1776-1990 consolidation. LAW/FOREIGN-International REF KZ235.U53

Current Treaty Index. LAW/FOREIGN-International REF KZ235.U54

U.S. Department of State Dispatch [also available on LEXIS: INTLAW; DSTATE]. K25.N5832 LAW/FOREIGN-International

International Legal Materials [also available on WESTLAW: ILM]. K9.N87 LAW/FOREIGN-International

LEXIS: INTLAW;ILMTY http://www.sice.oas.org/tradee.asp” OAS – Foreign Trade Information System. http://www.sice.oas.org/tradee.asp

United States legislative information

U.S. Code Congressional and Administrative News.

KF 63.U5 LAW/STACKS http://www.lexis-nexis.com/congcomp” Congressional Information Service (“CIS”) [print indexes not available after 1999; use http://www.lexis-nexis.com/congcomp].KF 49.C62 LAW/DOCS http://thomas.loc.gov/” THOMAS: Legislative Information on the Internet. http://thomas.loc.gov/

Establish a frame of reference (Get a clue!)

Encyclopedias

Jerry Martin Rosenberg, Encyclopedia of the North American Free Trade Agreement, the new American community, and Latin-American trade (1995). NDERSON/REFERENCE HC94.R668 1995

Treatises and monographs

Barry Appleton, Navigating NAFTA: A concise user’s guide to the North American Free Trade Agreement (1994). LAW/FOREIGN-International KDZ944.A41992 A66 1994

Deborah Barndt, Women working the NAFTA food chain: women, food and globalization (1999). ANDERSON/GENERAL COLL. [in process]

Stephen Blank, Making NAFTA work: U.S. firms and the new North American business environment (1998). ANDERSON/GENERAL COLL

HF1746.B58 1998

Maxwell A. Cameron & Brian W. Tomlin, The making of NAFTA: how the deal was done (2000).

ANDERSON/GENERAL COLL HF1746.C33 2000.

Michael Dreiling, Solidarity and contention: the politics of security and sustainability in the NAFTA conflict (2001). ANDERSON/GENERAL COLL HF1731.D74 2001

Ralph H. Folsom, NAFTA in a nutshell (1999). LAW/RESERVES KDZ944.A41992F468 1999

Leslie Alan Glick, Understanding the North American Free Trade Agreement (2d ed. 1994). ANDERSON/GENERAL COLL KDZ944.A41992 G58 1994

Jerry Haar & Krishnan Dandapani, Banking in North America: NAFTA and beyond (1999). ANDERSON/GENERAL COLL. [in process]

Barbara Hogenboom, Mexico and the NAFTA environment debate: the transnational politics of economic integration (1998). ANDERSON/GENERAL COLL HF1776.H65 1998

Gary Clyde Hufbauer, et al. NAFTA and the environment: seven years later (2000). ANDERSON/GENERAL COLL HF1746.N3312 2000

Gary Clyde Hufbauer & Jeffrey J. Schott, NAFTA: An assessment (1993). ANDERSON/GENERAL COLL

HF3211.H83 1993

Gary Clyde Hufbauer & Jeffrey J. Schott, North American Free Trade: Issues and Recommendations (1992). LAW/STACKS HF3211.H84 1992.

Ann E. Kingsolver, NAFTA stories: fears and hopes in Mexico and the United States (2001). ANDERSON/GENERAL COLL HF1746.K56 2001

Alan S. Lederman, The NAFTA Guide: How NAFTA will affect you and your business (1995). ANDERSON/GENERAL COLL KDZ944.A41992L43 1995

Luis Malpica de Lamadrid, El sistema mexicano contra practicas desleales de comercio internacional y el Tratado de Libre Comercio de America del Norte (1996). LAW/FOREIGN-International KGF4827.M35 1996

Frederick Mayer, Interpreting NAFTA: the science and art of political analysis. (1998). ANDERSON/GENERAL COLL

HF1746.M338 1998

Joseph A. McKinney, Created from NAFTA: the structure, function, and significance of the treaty’s related institutions (2000). ANDERSON/GENERAL COLL

KDZ945.A41992 M37 2000

NAFTA law and business (Ralph H. Folsom & W. Davis Folsom, eds., 1999 -). LAW/FOREIGN-International KDZ944.A41992N36 TA revisited: expectations and realities (Paul Rich & Guillermo de los Reyes, eds.1997). ANDERSON/GENERAL COLL

H1.A4 v. 550

Loretta Ortiz Ahlf, Aspectos juridicos del tratado de libre comercio de America del Norte y sus acuerdos paralelos (1998). LAW/FOREIGN-International KDZ944.O78 1998

The post-NAFTA political economy: Mexico and the Western Hemisphere (Carol Wise, d., 1998). ANDERSON/GENERAL COLL HC135.P715 1998

Jimmie V. Reyna, Passport to North American Trade: Rules of origin and customs procedures under NAFTA (1995). LAW/FOREIGN-International

KDZ949.O74 R49 1995

Maryse Robert, Negotiating NAFTA: explaining the outcome in culture, textiles, autos, and pharmaceuticals (2000). ANDERSON (in process)

Seymour J. Rubin, NAFTA and investment (1995). ANDERSON/GENERAL COLL

KDZ944.A4 1992 N34 1995

Alan Rugman, John Kirton & Julie Soloway, Environmental regulations and corporate strategy: a NAFTA perspective (1999). ANDERSON/GENERAL COLL.

Trading punches: Trade remedy law and disputes under NAFTA (Beatriz Leycegui, William B.P. Robson, and S. Dahlia Stein, eds., 1995).

ANDERSON/GENERAL COLL

KF6708.D8 T7 1995

Sidney Weintraub, NAFTA at three: a progress report (1997). ANDERSON/GENERAL COLL

HF1746.W438 1997

International law

Encyclopedia of public international law. LAW/FOREIGN-International JX1226.E52

Restatement (3d) of the foreign relations law of the United States [also available on WESTLAW: REST-FOREL, and on LEXIS: INTLAW;FORREL]. KF 4650.A17A5 LAW/RESERVE

Mark W. Janis, An introduction to international law (1988). LAW/FOREIGN-International

KZ3140.J36 1988

Thomas Buergenthal, Public international law in a nutshell (1990). LAW/RESERVE

JX3091.B84 1990

Use other people’s research

Research guides http://www.law.harvard.edu/library/ref/ils_ref/nafta_research_guide.htm” NAFTA Research Guide. Http://www.law.harvard.edu/library/ref/ils_ref/nafta_research_guide.htm” http://www.law.duke.edu/lib/libser/publicat/researchguides/nafta/nafta.pdf” Research Guides: NAFTA. http://www.law.duke.edu/lib/libser/publicat/researchguides/nafta/nafta.pdf” http://www.llrx.com/features/wto2.htm” WTO/Gatt Research. http://www.llrx.com/features/wto2.htm

Claire M. Germain, Germain’s transnational research: A guide for attorneys (1995). LAW/FOREIGN-International REF

K85.G47 1991

Guide to international legal research (2d ed. 1993). LAW/FOREIGN-International REF JX1291.G85 1993 graphies

NAFTA

Allan Metz, A NAFTA bibliography (1996). ANDERSON/GENERAL COLL KDZ944.A12 M48 1996

Alejandro Posadas, Closer Borders: Investment and Law in Mexico After the NAFTA. A Bibliography with an Index, 6 Duke J. Comp. & Int’l L. 371 (1996). K4.U536 LAW/FOREIGN-International

B.J. Zangari, NAFTA: Issues, industry sector profiles and bibliography (1994). ANDERSON/GENERAL COLL

HF3211.N348 1994

Francisco Avalos, NAFTA Primary and Secondary Sources: A Selective Bibliography, 10 Ariz. J. Int’l & Comp. L. 201 (1993). K1.R48 LAW/FOREIGN-International

Statistics

Handbook of North American industry: NAFTA and the economies of its member nations (1998 -). ANDERSON/REFERENCE HF1746.H36 1999

GATT

Select Bibliography: Uruguay Round Issues, 18 Brook. J. Int’l L. 197 (1992). K2.R67 LAW/FOREIGN-International

Peter M. Kelly & Judy Moore Melton, Select Bibliography: the General Agreement on Tariffs and Trade, 25 Tex. Int’l L.J. 317 (1990). K24.E93 LAW/FOREIGN-International

CFTA

Lyonette Louis-Jacques, Researching the U.S. – Canada Free Trade Agreement, 18 Int’l J. Legal Info. 17 (1990). K9.N8497 LAW/FOREIGN-International

International trade

International trade reporter [also available on LEXIS: ITRADE;INTRAD].

KF1975.A8I572 LAW/STACKS

Investment laws of the world. K1112.A48 LAW/FOREIGN-International

Commercial laws of the world. K1004.C65 LAW/FOREIGN-International

Digest of commercial laws of the world. K1005.4.D54 LAW/FOREIGN-International

LEXIS: ITRADE

WESTLAW: INT-TP

XIS: LAWREV;INTLR

Journals devoted to NAFTA, international trade, and international law in general

NAFTA digest. Z L250.6 N13 ANDERSON/TX DOCUMENTS

NAFTA: Law and business review of the Americas [available on WESTLAW: NAFTALBRA].

United States – Mexico law journal. K25.N586 LAW/FOREIGN-International

The transnational lawyer. K24.R356 LAW/FOREIGN-International

World trade and arbitration materials. K27.O767 LAW/FOREIGN-International

The international lawyer [also available on LEXIS: INTLAW;INTLAW, and on WESTLAW: INTLLAW]. K9.N86 LAW/FOREIGN-International Journal of International Law [also available on LEXIS: INTLAW;AJIL]. K1.M454 LAW/FOREIGN-International

World Wide Web sites http://www.nafta-sec-alena.org/english/index.htm” NAFTA Secretariat. http://www.nafta-sec-alena.org/english/index.htm” http://www.tamiu.edu/coba/usmtr/” Office for the Study of U.S.-Mexico Trade and North American Free Trade Agreement Information Center. http://www.tamiu.edu/coba/usmtr/” http://www.nafta-customs.org/” NAFTA Customs Web Site. http://www.nafta-customs.org/” http://wehner.tamu.edu/mgmt.www/nafta/weblinks/Index.htm” TAMU NAFTA Website. http://wehner.tamu.edu/mgmt.www/nafta/weblinks/Index.htm” http://www.sice.oas.org/” Organization of American States – Trade Unit. http://www.sice.oas.org/” http://www.usitc.gov/” The United States International Trade Commission Home Page. http://www.usitc.gov/” http://www.ustr.gov/” United States Trade Representative’s Home Page. http://www.ustr.gov/” http://www.wto.org/” World Trade Organization Homepage. http://www.wto.org/” http://www.jus.uio.no/lm/index.html” Lex Mercatoria. http://www.jus.uio.no/lm/index.html” http://www.law.uh.edu/librarians/tmulligan/economic.html” Researching International Economic Law. http://www.law.uh.edu/librarians/tmulligan/economic.html” http://www.law.uh.edu/librarians/tmulligan/nacle.html” NACLE Web Resources. http://www.law.uh.edu/librarians/tmulligan/nacle.html

Mexico

Bibliographies and other gateways

Francisco Avalos, The Mexican Legal System (1992). LAW/RESERVE

KGF150.A95 1992

Mexico,” in Thomas H. Reynolds & Arturo A. Flores, Foreign Law: Current Sources of Codes and Legislation in Jurisdictions of the World. K38.R49 LAW/FOREIGN-International REF

Indicador Legal Andrade: sobre leyes, reglamentos, acuerdos, decretos, etc. LAW/FOREIGN-International REF KGF52.I52

LEXIS: MEXICO ESTLAW: MEXLAW http://info.juridicas.unam.mx” Informacion Juridica. http://info.juridicas.unam.mx

Canada

Bibliographies and other gateways

Jacqueline R. Castel & Omeela K. Latchman, The Practical Guide to Canadian Legal Research (1993). LAW/FOREIGN-International REF

KE250.C37 1993

Margaret A. Banks, Using a Law Library (1985). LAW/FOREIGN-International REF

KE250.B36 1985

Canada,” in Thomas H. Reynolds & Arturo A. Flores, Foreign Law: Current Sources of Codes and Legislation in Jurisdictions of the World. K38.R49 LAW/FOREIGN-International REF

Canadian Abridgment. LAW/FOREIGN-International KE173 165. http://legalresearch.org” Best Guide to Canadian Legal Research.

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