Is NAFTA doomed?
Donald Trump is drawing the line in the sand
The North American Free Trade Agreement –NAFTA- is an agreement signed on January 1, 1994, from the United States of America, Canada, and Mexico. The agreement has two main branches: the North American Agreement on Environmental Cooperation –NAAEC- and the North American Agreement on Labor Cooperation –NAALC-.
Nevertheless, NAFTA’s main purpose was to establish a free market for business along North America by eliminating certain taxes and tariffs and reducing others. The trilateral trade deal has a total size of 1 trillion dollars, a volume that is 258.5% greater than the one existing in 1993, one year before the agreement came IGNORE INTO rule.
A breakdown of the trillion-dollar market shows who’s the most powerful party to the agreement: The United States and Mexico trade totaled 481.5 billion, while the United States and Canada trade totals 518.2 billion. Mexican – Canadian trade was 34.3 billion dollars, showing United States’ hegemony on the deal. All data corresponds to 2015.
The downsides of NAFTA include claims that the transiting workers are not being taken care of as: working conditions are not being monitored, no health and safety conditions are assured, international policies are not harmonized and employers have no responsibility and liability for violations as signaled by the Council on Hemispheric Affairs.
Addressing the pros and cons of NAFTA, President Donald Trump began renegotiating the terms of NAFTA on August 16, following his presidential promise to withdraw from it if Canada and Mexico decided not to negotiate within his first 100 days as a president.
Donald Trump’s main points on the new NAFTA include selling more to Mexico and buying less, in order to decrease the American-Mexican trade balance. In addition, technological patent markets had not been considered in the original agreement since it was 1994. Other arrangements include reducing “unfair subsidies” for foreign workers in the United States.
Under NAFTA’s Article 2205, Donald Trump could withdraw from the agreement on a 90 days’ notice, which makes his claims serious.
It’s difficult for the United States to withdraw from the agreement, as there are substantial economic benefits for all. It is true that many points of the agreement should be revised. In the end, this could be seen as a political move from Donald Trump in order to make his electorate happy. Not that much is going to be done, just a move to keep the American blue collar societies moral up.
Latin American Post | David Eduardo Rodríguez Acevedo
