The History of Nafta

The North American Free Trade Agreement was implemented on January 1, 1994. Its purpose was to remove tariff barriers between Canada, the United States and Mexico. The Agreement includes two supplemental agreements on environmental and labor issues that address cooperative efforts to reconcile policies and procedures for dispute resolution between the member countries. NAFTA was preceded by an agreement between the United States and Canada entitled the U.S.-Canada Free Trade Agreement, which was enacted on January 1, 1989, but has now been superseded by the NAFTA.

The NAFTA initialing ceremony in October 1992.NAFTA called for immediately eliminating duties on half of all U.S. goods shipped to Mexico and gradually phasing out other tariffs over a period of about 14 years. Restrictions were to be removed from many categories, including motor vehicles and automotive parts, computers, textiles, and agriculture. The treaty also protected intellectual property rights and outlined the removal of restrictions on investment among the three countries. Provisions regarding worker and environmental protection were added later as a result of supplemental agreements signed in 1993.This agreement was an expansion of the earlier Canada U.S. Free Trade Agreement of 1989. Unlike the European Union, NAFTA does not create a set of supranational governmental bodies, or does it create a body of law which is superior to national law. As an international agreement, is very similar to a treaty Under United States law it is classed as a congressional-executive agreement.

The agreement was pursued by the conservative governments in the US and Canada. In Canada, the Government was led by Brian Mulroney of the Progressive

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Conservative Party of Canada. The Canadian government worked aggressively with Republican President George H. W. Bush to create and sign the agreement. There was considerable opposition on both sides of the border, and the Clinton administration made passage of the agreement its major legislative initiative in 1993. After intense political debate and the negotiation of several side agreements, the House passed NAFTA by 234-200, and the Senate passed it by 61-38. Some opposition persists to the present day. Recently in Canada, labour unions have removed their objections to the agreement from their platforms.

Since NAFTA was signed, it has been difficult to analyze its macroeconomic effects due to the large number of other variables in the global economy. Various economic studies have generally indicated that rather than creating an actual increased trade, NAFTA has caused trade diversion, in which the NAFTA members now import more from each other at the expense of other countries worldwide. Some economists argue that NAFTA has increased concentration