NAFTA 20 years later: Are we better off today? - The Packer

NAFTA 20 years later: Are we better off today?

05/15/2014 08:49:00 AM
Tom Karst

Tom KarstIt has been more than 20 years since the North American Free Trade Agreement took effect, and there are several online stories looking back in retrospective fashion at the trade treaty.

A USA Today story asks, “NAFTA: 20 years later: Success or failure?

That coverage focused on the effects of NAFTA within Mexico, observing that while there has been improvement in Mexico’s economy (auto, electronics and agriculture), the treaty has not solved Mexico’s poverty problem and the wage gap between the U.S. and Mexico is still wide. Yet more good than bad has come from NAFTA, and Mexico would be in a worse position today without the trade deal, one Mexican economist said in the article.

An opinion piece by Jim Kolbe in also pointed out the positives from the trade pact.

Headlined “NAFTA working despite dire predictions,” Kolbe writes:

It became the first free-trade agreement among developed and developing countries. It was the first trade agreement to include all agricultural products and allow their free movement to consumers in the region. It created a regional market in excess of $19 trillion — much larger than any market created by other regional trade agreements before or since.

It helped to nearly quadruple trade flows among the three countries, from just under $300 billion annually to over $1 trillion each year. It has made Canada our largest trading partner, supporting 8 million jobs in this country, and Mexico our second-largest trading partner, supporting about 6 million jobs here at home.

The USDA FAS also published a 20-year review of NAFTA relative to agricultural U.S. agricultural trade.

Called “NAFTA - 20 years of successful U.S.-Mexico Agricultural Trade” the report is entirely upbeat about the agreement. From the report:

Initiated on January 1, 1994, the North American Free Trade Agreement (NAFTA) between the United States, Mexico, and Canada redefined the economic relationship of said three countries. Eliminating trade barriers and giving preferential treatment to imported goods manufactured within the region, translated into an increase (both in volume and value) of goods and services, including agricultural and food products. Some strategic commodities were reserved by each member for additional periods of time, but 20 years after NAFTA’s inception, virtually every product can be traded among the three partners, giving way to not only a bigger market, but industry integrations that allow the North American bloc to compete into foreign markets as one unit.

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