NAFTA

NAFTA (North American Free Trade Association) In operation since 1 January 1994, it aims to create a free trade area between Canada, Mexico, and the USA through the elimination of trade barriers on most industrial goods, as well as the financial and service sectors, by 2015. It was thus far less ambitious than the European Union. It emerged from the ‘Free Trade Area’ between Canada and the USA, which had been effective from 1 January 1989 following an initiative of Brian Mulroney. In the 1992 and 1996 US presidential elections, a rich vein of populist opposition to NAFTA was uncovered. This was mainly based on fears that NAFTA would serve to export US jobs to Mexico. According to Joseph E. Stiglitz, however, the US lost far more jobs to Asian economies with a cheap and well-educated workforce, such as China and India. And, despite the commitment to nominal free trade, barriers continued to effect Mexican exports, for instance in agricultural goods. Overall, the USA benefited disproportionately. Between 1994 and 2004 US income increased relative to that of Mexico by over 10 per cent. As a result, under George W. Bush the US proposed to extend the treaty to Latin America and the Caribbean.

http://www.nafta-sec-alena.org