NAFTANAFTANorth American Free Trade Agreement

Chapters 11 & 15 North American Free Trade Agreement

Chapters 11 & 15

Economic Stability✦ Ensuring economic stability within a

nation-state

✦ NAFTA - seek to break down trade barriers, such as tariffs, that restrict trade

✦ Protectionism - restrains trading between states, through tariffs and quotas to discourage imports, and prevent foreign take overs

NAFTA Background

1950s - a continentalist approach was spoken about

1964 - Merchant-Heeney Report - called for Canada to recognize the special position of the United States and pursue quiet diplomacy on global issues of importance to the United States

should not visibly challenge US policy but coordinate its actions

NAFTA is an example of this coordination

The aim was (Canada) to obtain easier access to the large markets to the south

some say that NAFTA does not go as far as the EU (no joint political administration or currency)

http://www.nafta-sec-alena.org/en/view.aspx?x=283#When%20was%20the%20NAFTA%20signed

NAFTA

seeks to reduce trade barriers such as tariffs, regulations and subsidies to let goods flow easily between member nations (Canada, USA, Mexico)

Harmonizing these rules and regulations result in sacrificing sovereignty

What has been lost and gained through this agreement?

NAFTA

http://amhist.ist.unomaha.edu/module_files/NAFTA.jpg

NAFTA

✦ Agreement was signed on Dec 8, 1993

✦ Brian Mulroney (Canada)

✦ Carlos Salinas de Gortari (Mexico)

✦ Bill Clinton (USA)

✦ 2007, largest trade bloc in the world (based on purchasing power parity)

http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/nafta-alena/texte/index.aspx?lang=en&menu_id=34&menu=R

NAFTA Information

There has been job growth, but how can it be determined how much of this resulted directly from NAFTA?

Came into effect - 1994

Since signing, trade with the US has increased 40%

NAFTA created the largest trading area in the world (406 million people)

Auto sector is the largest ($104.1 billion - 1999)

nearly 2/3 of Canada’s forest products are exported to the United States

NAFTA Information

Canada is the US largest energy trading partner ($66.7 billion) being exported annually

US/Canadian electrical grids are interconnected

Air traffic between the two countries has significantly increased since an agreement was signed in 1995

The US is Canada’s largest foreign investor, with 72% of total foreign investment. Canada is USA 3rd largest foreign investor

http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/nafta-alena/fast_facts-faits_saillants.aspx?lang=eng

Flight Video

American flight traffic

Economic Security

Economic Security - term used to make rules to protect markets and ensure a supply of resources

Ex. Canada must continue to export petroleum to the United States at levels comparable to the previous three years

Were an oil shortage to occur, we could not restrict exports in favour of domestic use

The increased reliance upon oil sands productions in Alberta is a direct consequence

Alberta Oil Sands

http://www.neb.gc.ca/clf-nsi/rpblctn/spchsndprsnttn/2007/nfrstrctrdvlpmntcnd/nfrstrctrdvlpmntcnd-eng.html

Oil Sands Production

http://www.neb.gc.ca/clf-nsi/rpblctn/spchsndprsnttn/2007/nfrstrctrdvlpmntcnd/nfrstrctrdvlpmntcnd-eng.html

Potential New Markets

http://www.neb.gc.ca/clf-nsi/rpblctn/spchsndprsnttn/2007/nfrstrctrdvlpmntcnd/nfrstrctrdvlpmntcnd-eng.html

Potential Pipeline Projects

http://www.neb.gc.ca/clf-nsi/rpblctn/spchsndprsnttn/2007/nfrstrctrdvlpmntcnd/nfrstrctrdvlpmntcnd-eng.html

National Treatment

National Treatment - This clause in the agreement means that foreign investors have the unrestricted right to invest in member nations without conditions and without limits

As a result, Canada has lost the ability to say that only investment that will help Canada is acceptable.

http://thiscanadian.typepad.com/this_canadian/2006/04/canadians_in_af.html

One American thought

Increase of Trade

NAFTA✦ Effects are both positive and negative

✦ Mexico has seen real income rise and poverty rates fall

✦ Others argue that business owners and elites benefit

✦ Negative impact on Mexican farmers - saw food prices fall based on cheap imports from US agribusiness

✦ more investment in education

Ideas and Opinions

“Policy protecting cultural industries is still subject to severe economic retaliation under the terms of the global trade regime. Under these conditions, the actual meaning of the cultural exemption, for which the Canadian government has fought so gamely, is difficult to ascertain”

Darin Barney, Communication Technology, 2005

One Perspective

NAFTA... has been in effect almost 12 years and a new stage, NAFTA Plus is in the works

the elites of the three countries have been aggressively moving forward to build a new political and economic entity

A “tri-national merger” is underway that leaps beyond a single market to a single state, called “North America”

http://www.newint.org/features/2004/12/01/mexico-labour-rights/

NAFTA Superhighway

Canada’s Involvement

✦ To what extent should Canada’s involvement in this form of international relations benefit Canada? (p.242)

✦ NAFTA - beneficial or detrimental? (p.245)

✦ What criteria would you use to determine if Canada should remain in NAFTA?