Structure of the Structure of the PresentationPresentation

1. What is NAFTA? History Introduction Naaec, Naalc

2. Objectives, Benefits & Limitations

3. Impact on US, Canada & Mexico

4. Future of NAFTA

INTRODUCTIONINTRODUCTIONNAFTA 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 GROUNDBACK GROUNDIn 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 NAFTAOPPOSITION TO NAFTACANADA 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 RULESNAFTA RULESACCESS 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-North American Agreement on Environmental Co-

operation (NAAECoperation (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-North American Agreement on Labor Co-

operation (NAALCoperation (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