Which Is A Major Concern For Mexico Under The North American Free Trade Agreement

Date Posted: October 15, 2021 by admin

NAFTA has six main advantages. According to a 2017 report by the Congressional Research Service, the law has more than tripled trade between Canada, Mexico and the United States since its passage. The agreement reduced and eliminated tariffs. NAFTA came into force in 1994 under the Clinton administration. The objective of the agreement was to boost trade in North America between Canada, the United States and Mexico. It also aimed to remove barriers to trade between the three parties, as well as most taxes and customs duties on goods imported and exported by both parties. Notes: Data on U.S. exports to Canada are derived from import data compiled by Canada. Using Canadian import data to create U.S.

export data requires multiple alignments to compare the two series. The aggregate U.S. export figure is slightly higher. U. Census Bureau, “U.S./Canada Data Exchange and Substitution,” www.census.gov/foreign-trade/reference/guides/tradestatsinfo.html#canada. At the time of NAFTA implementation, the U.S.-Canada Free Trade Agreement was already in place and U.S. tariffs on most Mexican products were low, while Mexico had the highest protective trade barriers. Under the agreement, the U.S. and Canada gained better access to the Mexican market, which at the time was the fastest-growing main export market for U.S. goods and services.13 NAFTA also opened up the U.S.

market to increased imports from Mexico and Canada, creating one of the largest individual markets in the world. Key NAFTA provisions included tariff and non-tariff trade liberalization, rules of origin, trade in services, foreign investment, protection of intellectual property rights, government procurement and dispute settlement. Labour and environmental regulations have been incorporated into separate NAFTA sub-agreements. A key issue for the 115th Congress is the direction of U.S. trade policy under the Trump administration, particularly the upcoming renegotiation of NAFTA. Congress may want to reflect on how NAFTA could be modernized and renegotiated, the role of Congress in future renegotiations, the negotiating positions of Mexico and Canada, and the impact of a possible NAFTA withdrawal. Congress could also consider new “21st century” issues addressed in recent U.S. free trade agreements, such as the U.S.-Korea Free Trade Agreement and the TPP, and determine whether they could be potential topics for discussion regarding NAFTA.

If the U.S. withdraws completely from NAFTA, it could lead to significant disruptions in North America`s vast production chains and lead to job losses in all three countries. On the other hand, depending on how the President and Congress move forward, there may be opportunities to look at the successes of NAFTA and where it has not lived up to expectations. According to Chad Bown of the Peterson Institute for International Economics, the Trump administration`s list “is entirely consistent with the president`s position of liking trade barriers and having protectionism. In many ways, this makes NAFTA less of a free trade agreement. [131] The concerns expressed by the U.S. Trade Representative about subsidized state-owned enterprises and currency manipulation do not apply to Canada and Mexico, but are intended to send a message to countries outside North America. [131] Jeffrey Schott of the Peterson Institute for International Economics noted that it would not be possible to conclude the renegotiations quickly while addressing all the concerns on the list.

[133] He also said that it was difficult to do anything to combat trade deficits. [133] The idea of a trade deal actually dates back to the administration of Ronald Reagan. During his tenure as president, Reagan made a campaign promise to open trade in North America by signing the Trade and Tariffs Act in 1984. Four years later, Reagan and the Canadian Prime Minister signed the Canada-U.S. Act. Free trade agreements. Beginning in the 1960s, Mexico had a restrictive policy of import substitution through a series of Mexican automobile decrees in which the government sought to supply the entire Mexican market with locally produced automotive products. .

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