NAFTA

North American Free Trade Agreement

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“NAFTA” redirects here. For other uses of the acronym, see Nafta (disambiguation).

North American Free Trade Agreement Tratado de Libre Comercio de América del Norte (Spanish) Accord de libre-échange nord-américain(French)
Secretariats		Mexico City, Ottawa and Washington, D.C.
Languages		3[show] English Spanish French
Membership		Canada, Mexico and United States
Establishment
–	Formation	January 1, 1994
Area
–	Total	21,783,850 km2 (1st) 8,410,792 sq mi
–	Water (%)	7.4
Population
–	2010 estimate	457,284,932 (3rd)
–	Density	25.1/km2 (195th) 54.3/sq mi
GDP (PPP)		2008 (IMF) estimate
–	Total	$17,153,462 trillion (n/a)
–	Per capita	$35,491 (n/a)
GDP (nominal)		2008 (IMF) estimate
–	Total	$16,792 trillion (n/a)
–	Per capita	$35,564 (18th)
Website http://www.nafta-sec-alena.org

The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada-United States Free Trade Agreement between the U.S. and Canada. In terms of combined purchasing power parity GDP of its members, as of 2007 the trade bloc is the largest in the world and second largest by nominal GDP comparison.^[update]

The North American Free Trade Agreement (NAFTA) has two supplements, the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC).

Contents [show] 1 Background 2 Negotiation and ratification 3 Provisions 4 Mechanisms 4.1 Trade 4.2 Industry 4.3 Environment 4.4 Agriculture 4.5 Mobility of persons 5 Criticism and controversies 5.1 Canadian disputes 5.1.1 Change in income trust taxation 5.1.2 Further criticism in Canada 5.2 U.S. deindustrialization 5.3 Impact on Mexican farmers 5.4 Impact of NAFTA on Canada 5.5 Chapter 11 5.6 Chapter 19 5.7 Chapter 14 6 See also 7 References 8 External links 9 Further reading

[edit] Background

In 1988 Canada and the United States signed the Canada-United States Free Trade Agreement after which the U.S. Congress approved implementing legislation. The American government then entered into negotiations with the Mexican government for a similar treaty, and Canada asked to join the negotiations in order to preserve its perceived gains under the 1988 deal.^[1] The climate at the time favored expanding trade blocs, such as the Maastricht Treaty, which created the European Union in 1992.

[edit] Negotiation and ratification

Following diplomatic negotiations dating back to 1986 between the three nations, the leaders met in San Antonio, Texas, on December 17, 1992, to sign NAFTA. U.S. President George H. W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas, each responsible for spearheading and promoting the agreement, ceremonially signed it. The agreement then needed to be ratified by each nation’s legislative or parliamentary branch.

Before the negotiations were finalized, Bill Clinton came into office in the U.S. and Kim Campbell in Canada, and before the agreement became law, Jean Chrétien had taken office in Canada.

Bill Clinton had become president of the U.S. before the agreement came into force, and is seen here signing the U.S. implementation legislation.

The proposed Canada-U.S.trade agreement had been extremely controversial and divisive in Canada, and the 1988 Canadian election was fought almost exclusively on that issue. In that election more Canadians voted for anti-free trade parties (the Liberals and the New Democrats) but more seats in parliament were won by the pro-free trade Progressive Conservatives (PCs). Mulroney and the PCs had a parliamentary majority and were able to easily pass the Canada-U.S. FTA and NAFTA bills. However Mulroney himself had become deeply unpopular and resigned on June 25, 1993. He was replaced as Conservative leader and prime minister by Kim Campbell, who then led the PC party into the 1993 election where they were decimated by the Liberal party under Jean Chrétien. Chrétien had campaigned on a promise to renegotiate or abrogate NAFTA, but instead negotiated the two supplemental agreements with the new U.S. president. In the U.S., Bush, who had worked to “fast track” the signing prior to the end of his term, ran out of time and had to pass the required ratification and signing into law to incoming president Bill Clinton. Prior to sending it to the United States Senate, Clinton introduced clauses to protect American workers and allay the concerns of many House members. It also required U.S. partners to adhere to environmental practices and regulations similar to its own. The ability to enforce these clauses, especially with Mexico, and with much consideration and emotional discussion the House of Representatives approved NAFTA on November 17, 1993, by a vote of 234 to 200. The agreement’s supporters included 132 Republicans and 102 Democrats. NAFTA passed the Senate 61-38. Clinton signed it into law on December 8, 1993; it went into effect on January 1, 1994.^[2][3]