NAFTA

Structure of the Presentation
1. What is NAFTA?
 History
 Introduction
 Naaec, Naalc
2. Objectives, Benefits & Limitations
3. Impact on US, Canada & Mexico
4. Future of NAFTA
INTRODUCTION
NAFTA is an agreement signed by the governments of the United
states, Canada and Mexico creating a trilateral trade bloc in
North America.
 Members: Federal Govt of each respective country: Canada,

Mexico & United States
 Official languages: English, French and Spanish
 Secretariats: Mexico city, Ottawa, Washington D.C.
 Establishment: 1 January 1994
 NAFTA supplements: NAAEC & NAALC
UNDERSTANDING NAFTA
 NAFTA is the product of a general trend toward free trade
between North American nations, beginning with the General
Agreement on Tariffs and Trade.
 Wide breadth of opposition
 Benefits ostensibly outweighed the risks
 NAFTA has endured a number of changes since it was first
officially signed in 1992
 various annexations have been applied since 1993
 Over 30 organizations are directly related to the history of
NAFTA-NAFTA Secretariat, Commission for Environmental
Cooperation or the Commission for Labor Cooperation
BACK GROUND
In 1988 Canada & the United States signed the Canada-United
states Free Trade Agreement
The American government then entered into negotiations with the

Mexican government for a similar treaty
Canada asked to join the negotiations in order to preserve its

perceived gains under the 1988 deal
The agreement NAFTA was signed by

U.S. president - George H. W. Bush,
Canadian prime minister - Brian Mulroney and Mexican president
- Carlos Salinas
in San Antanio, Texas on December 17,1992.
OPPOSITION TO NAFTA
CANADA
 General reluctance to engage in any sort of free trade
 Nonetheless, an agreement was signed due to the fact that a
free trade agreement between Mexico and the United States with
the exclusion of Canada would result in real economic problems
AMERICA
 primary concern being a weakened economy due to a diluted
labor market, environmentalists were also rather vocal about
their concerns and opposition
 Nonetheless, interests in preserving a good relationship with
both countries, the potential for growth in incorporating both a
strong and a quickly growing industrialized nation, and
preparation for a globalized economy overrode any reluctance to
engage in the agreement.
Calming the NAFTA Paranoia
 Most credit President Bill Clinton for assuaging these
controversies (quite ironically) by proposing three auxiliary
agreements with Canada and Mexico regarding the
environment, labor, and unforeseen issues that could be
associated with the ratification of NAFTA
 Transitional Assistance Program
NAFTA RULES
ACCESS OF GOODS
 All trade duties between the US & Canada were to be
completely eliminated by 1998
 Alternately, all duties were to be dispensed with for industrial
trade between the United States and Mexico within 10 years,
and for agricultural trade within 15 years
DETERMINANTS FOR NORTH AMERICAN PRODUCTS
 Legislators wanted to ensure that NAFTA-designated
preferential tariffs were not applied to products with too much
foreign influence
 An example is the NAFTA Shift Rule, which requires that
“inputs” from foreign countries must be classified as such,
subsequently subjecting these inputs to tariffs outside of
NAFTA provisions, although these tariffs may not be applied
to the final product.
CUSTOMS
 Canada, the United States, and Mexico agreed to uniform
customs policies under NAFTA
 In essence, verification, record keeping, and rules of origin
are now all handed on the same plane under NAFTA so that
the transfer of goods between each country can be
expedited.
AGRICULTURE
Agreements were a little less standardized; there are three
primary agreements
 Agricultural safeguards that allow a country to revert to pre-
NAFTA tariffs when necessary for the first ten years after
NAFTA took effect
GENERAL SAFEGUARD
 Chapter 8 of NAFTA, titled “Emergency Action,” includes a
generalized safeguard for any country that feels that they
have been economically injured by any provision included in
the history of NAFTA, to include tariff adjustments
GOVERNMENT PROVISIONS
 One of the main provisions of NAFTA is to give the United
States and Canada access to Mexico’s government
procurement market (and vice versa), which includes
parastatals (government controlled enterprises), the
manufacture and cultivation of goods, and contracts for
services and construction
Investments
This includes:
 Parameters for investment in foreign NAFTA countries,
 The reduction of investment restrictions between North
American countries, and
 Guidelines for settling disputes between investors and
foreign NAFTA countries.
 They also ensure that foreign investors are treated the
same as domestic investors, thereby eliminating lines of
distinction between North American countries in terms of
investment.
DISPUTE SETTLEMENT
 Under NAFTA, in order to standardize dispute settlement, a
trilateral free trade commission known as the Secretariat
was developed
ENVIRONMENTAL STANDARDS
 Advocation of strict environmental standards have been
included in the agglomeration of NAFTA rules and regulations
 The reduction of environmental standards in the interest of
investment is strongly discouraged, and fresh water
standards are covered both in NAFTA and the General
Agreement on Tariffs and Trade.
North American Agreement on Environmental Co-operation
(NAAEC)
NAAEC created Commission for Environmental Co-operation

(CEC) in 1994
Development of common priorities for the protection of certain

species
Developing North American Conservation Action Plans for three

shared marine species
Provide tools such as map of terrestrial eco-regions which

management agencies are using in this programs
Setting out common mechanism for planning and monitoring bird

conservation programs
LABOUR COOPERATION
It requires that each North American country provides
guarantees that all administrative, judicial (and quasi-
judicial), and labor engagements are just and transparent.
 Freedom of association and the right to assemble
 The right to collective bargaining
 The right to strike
 The right to refuse labor
 Child and young person labor sanctions
 Minimum wage requirements
 The expulsion of employment discrimination
 Gender equality
 Occupational hazard prevention
 Compensation for occupational injury and/or illness
 Protection for migrant workers
North American Agreement on Labor Co-operation
(NAALC)
 NAALC members work together to protect, enhance and
enforce the basic rights of workers.
 Establishment of institutions & creation of formal process to

raise concerns related to labor law enforcement directly with
government
 Undertaken a wide range of co-operative programs and

technical exchanges on industrial relations,
 occupational safety and health,
 child labor,
 gender equality,
 protection of migrant workers

NAFTA

Uploaded by

Copyright:

Available Formats

NAFTA

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

NAFTA

Uploaded by

Copyright:

Available Formats

Structure of the Presentation

2. Objectives, Benefits & Limitations

3. Impact on US, Canada & Mexico

 Members: Federal Govt of each respective country: Canada,

The American government then entered into negotiations with the

Canada asked to join the negotiations in order to preserve its

The agreement NAFTA was signed by

NAAEC created Commission for Environmental Co-operation

Development of common priorities for the protection of certain

Developing North American Conservation Action Plans for three

Provide tools such as map of terrestrial eco-regions which

Setting out common mechanism for planning and monitoring bird

 Establishment of institutions & creation of formal process to

 Undertaken a wide range of co-operative programs and

You might also like