Agreement That Ended Trade Barriers Between The United States Canada And Mexico

Part of NAFTA`s rationale was that it would reduce illegal immigration from Mexico to the United States. The number of Mexican immigrants – all legal status – living in the United States nearly doubled between 1980 and 1990, when it reached an unprecedented level of 4.3 million. Boosters argued that unifying the U.S. and Mexican markets would lead to a gradual convergence of wages and living standards, which would reduce Mexicans` motives for crossing the Rio Grande. Carlos Salinas de Gortiari, then president of Mexico, said the country would „export goods, not people.“ While NAFTA had a net impact on the economy as a whole, it was barely noticeable. A 2003 Congressional Budget Office report concluded that the agreement „increased the annual GDP of the United States, but by a very small amount – probably no more than a few billion dollars or a few hundredths percent.“ The CRS cited the report in 2015 and suggested that it had not reached another conclusion. Political scientist Daniel W. Drezner of Tufts University argued that NAFTA makes it easier for Mexico to transform into a true democracy and become a country that considers itself North America. This has strengthened cooperation between the United States and Mexico. [81] The CEPR argues that if its 1960-1980 growth rate had continued, Mexico could have reached a per capita level at the Portuguese level. Instead, it reached the 18th worst rate in 20 Latin American countries and grew by only 0.9% per year on average between 1994 and 2013. The country`s poverty rate remained virtually unchanged between 1994 and 2012. But other economists, including Gary Clyde Hufbauer and Cathleen Cimino-Isaacs of the Peterson Institute for International Economics (PIIE), have pointed out that increased trade is paying off the U.S.

economy. Some jobs are lost because of imports, others are created and consumers benefit greatly from lower prices and often improved product quality. Your 2014 PIIE study on the impact of NAFTA revealed a net loss of about 15,000 jobs per year as a result of the pact – but gains of about $450,000 for each job lost, in the form of higher productivity and lower consumer prices. The second parallel agreement is the North American Environmental Cooperation Agreement (NAAEC), which established the Commission for Environmental Cooperation (CEC) in 1994. The CEC is responsible for strengthening regional cooperation in the environmental field, reducing potential trade and environmental conflicts and promoting effective enforcement of environmental legislation. It also facilitates public cooperation and participation in efforts to promote conservation, protection and improvement of the North American environment. It consists of three main components: the Council (Minister of the Environment), the Joint Advisory Committee of Governments (JPAC) and the Secretariat, which is headquartered in Montreal. It has an annual budget of $9 million, with Canada, Mexico and the United States contributing $3 million per year and settled by consensus (non-majority). The meat industry was one of the most affected agricultural sectors.

In 2004, Mexico moved from a small player in the U.S. export market to the second largest importer of U.S. agricultural products, and NAFTA may have been an important catalyst for this change. Free trade eliminated the barriers to business between the two countries, allowing Mexico to offer a growing meat market in the United States and increase sales and profits for the United States.

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