Nafta

The economy of North America encompasses more that 514 million people in 23 sovereign states and 15 dependent territories. The boundary of the economy of North America is marked by the sharp division between the northern English and French speaking countries of Canada and the United States, which are considered the wealthiest and most developed nations in the world, and the countries of Central America and the Caribbean, which are considered less developed. Mexico is a NIC, or newly industrialized country, which lies in the middle of the two extremes, is apart of the North America free trade agreement and the only Latin American member of the OECD.

On January 1, 1994, the United States, Mexico, and Canada entered into the North American Free Trade Agreement (NAFTA), creating the largest free trade area and richest market. The NAFTA is considered the most comprehensive regional trade agreement ever negotiated by the United States. It is said that by 2008, the NAFTA will be fully implemented.

Some of the key goals of the NAFTA include:

Ð'* to reduce barriers to trade

Ð'* to increase cooperation for improving working conditions in North America

Ð'* to create an expanded and safe market for goods and services produced in North America

Ð'* to establish clear and mutually advantageous trade rules

Ð'* to help develop and expand world trade and provide a catalyst to broader international cooperation

The objectives of the NAFTA are to (1) eliminate barriers to trade in, and facilitate the cross-border movement of goods and services between the Party's territories, (2) to promote conditions of fair competition in the free trade area, (3) increase substantially investment opportunities in the countries included in the NAFTA, (4) to provide exceptional protection and enforcement of intellectual property rights of the NAFTA members, (5) to create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes, and (6) to establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement.

The agreement was originally perused by the conservative governments in the United States and Canada who were supportive of free trade. The Canadian Prime Minister Brian Mulroney, U.S. President George H. W. Bush, and the Mexican President Carlos Salinas de Gortari were the heads of these governments at the time. In December 17, 1992 the three-nation NAFTA was signed, however before anything else, the legislatures of the three countries had to approve of it. There was a considerable opposition in all three countries, but in the United States, after Bill Clinton made its passage a major legislative initiative in 1993, the NAFTA proposal was approved.

During Clinton's presidential campaign, he had promised to review the agreement, which he thought was insufficient. However he did not alter the original agreement, instead he complemented it with the aforementioned NAAEC and NAALC. After an intense political debate and negotiation, the U.S House passed NAFTA by 234-200, and the U.S Senate passed it by 61-38. Then finally in November of 1993, Clinton sanctioned the ratification.

However despite the aforementioned compliments made my former President Bill Clinton, many have risen arguments against NAFTA. One such argument is that the North American Free Trade Agreement is actually not a "free trade" agreement, but rather is government managed trade. The fundamental nature of this criticism is that such trade agreements don't promote free trade. They inhibit it by implementing another level of bureaucracy on top of national governments. This can not only be detrimental on the involved nation's trade, it also results in an erosion of sovereignty for the involved nations. This causes citizens and governments to be bound by decisions made by an unelected international body.

In Canada, there is concern over the provision that if something is sold as a commodity, the government cannot stop its sales in the future. Other fears come from the effects NAFTA has on Canadian lawmaking. An excellent example of this occurred in 1996, when MMT, a gasoline additive that studies have linked to nerve damage, was brought into Canada by an American Company. The Canadian federal government banned the importation of the additive. The American company brought in a claim under NAFTA Chapter 11 and sought US$201 million, and by Canadian Provinces