North American Free Trade Agreement Gdp Ppp

For optimists in Mexico, nafta 1994 seemed to be full of promise. The agreement was indeed a 1988 Canada-U.S. extension. Free trade agreements, and it is the first that has linked an emerging market economy to development. The country has undergone difficult reforms and has begun a transition from the type of one-party economic policy to market orthodoxy. Proponents of NAFTA argued that the economy`s attachment to that of its wealthier northern neighbours would lock these reforms in and stimulate economic growth, ultimately leading to a convergence of living standards between the three economies. A “secondary agreement” reached in August 1993 on the application of existing domestic labour law, the North American Convention on Labour Cooperation (NAALC) [39], was severely restricted. With regard to health and safety standards and child labour law, it excluded collective bargaining issues, and its “control teeth” were only accessible at the end of a “long and painful” dispute. [40] The obligations to enforce existing labour law have also raised questions of democratic practice. [37] The Canadian anti-NAFTA coalition Pro-Canada Network suggested that guarantees of minimum standards in the absence of “extensive democratic reforms in the [Mexican] courts, unions and government” would be of no use. [41] However, subsequent evaluations indicated that NAALC`s principles and complaint mechanisms “created a new space for princes to form coalitions and take concrete steps to articulate the challenges of the status quo and promote the interests of workers.” [42] As a result of NAFTA, Canada recorded a more modest increase in trade with the United States than Mexico, with 63.5% adjusted for inflation (trade between Canada and Mexico remains negligible). Unlike Mexico, it has no trade surplus with the United States.

While it sells more goods in the United States than it buys, a large trade deficit in the services sector with its southern neighbour brings the total balance to $11.9 billion in 2015. Such trade benefits often come under interest, because while costs are highly concentrated in certain sectors such as the automotive industry, the benefits of an agreement such as NAFTA are widespread in society. PROPONENTs of NAFTA estimate that about 14 million U.S. jobs depend on trade with Canada or Mexico, and that the nearly two hundred thousand export-related jobs created each year by the pact cost an average of 15-20% more than lost jobs.

Originally published on April 11, 2021