10 Things to Know About NAFTA
1. The North American Free Trade Agreement prevents barriers and sets standards for trade between the U.S., Mexico and Canada. The pact was signed into law by Bill Clinton in 1993, but negotiations occurred during the last years of the George H.W. Bush administration. Free trade between the U.S. and Canada dates back to 1989, and Canada piggybacked on what was to be a similar deal between the U.S. and Mexico.
2. Trade of goods among NAFTA partners accounted for about a quarter of total U.S. trade in 2015, according to Census data, and exports and imports among the three nations have nearly tripled in the 23 years since the agreement took effect.
3. In preparation for the renegotiation, each of the three partner nations released documents outlining priorities and key objectives. Canada’s focus is modernization, including a more competitive technology sector and progressive measures like addressing climate change and gender equality. Ottawa also wants to maintain independent panels to resolve trade disputes. Priorities for Mexico include maintaining equal standing in a partnership that has been key to national economic well-being. An 18-page document from the office of the United States Trade Representative outlines goals that center on reducing U.S. trade deficit with partners and maintaining economic opportunity for Americans.
4. A third of manufacturing jobs have been lost since NAFTA went into effect, according to data from the Bureau of Labor Statistics. Despite President Donald Trump’s campaign promises to the Rust Belt, though, problems in the U.S. manufacturing industry do not all stem from what he has called “the worst trade deal in the history of the world.” Significant manufacturing job loss occurred after China joined the World Trade Organization in 2001 and during the Great Recession between 2008 and 2009.
5. According to a joint government website, nearly 40 million jobs were created by NAFTA in the first 15 years, with 25 million of them in the U.S.
6. Americans have the most negative view of NAFTA, according to a Pew Research Center survey. But more than half of survey respondents in the U.S., Canada and Mexico said that the trade agreement has been a “good thing” for their country.
7. The largest trade deficit that the U.S. has with Mexico is in the transportation industry. Bringing production back to the U.S., where labor, material and factory costs are higher, could raise the price of American cars and make them less competitive in the international market. Other sectors with trade deficits that could see similar effects are computers and oil and gas.
8. Trump may focus his NAFTA woes on Mexico, but Canada is the trade partner that has received the most complaints. According to CNN, 35 complaints have been brought against Canada since the pact was first signed, compared to 22 against Mexico and 20 against the U.S.
9. According to Bloomberg, chief negotiators for the U.S. include Commerce Secretary Wilbur Ross, Trade Representative Robert Lighthizer and Assistant Trade Representative John Melle. Joining this group in Washington from Mexico are Economy Minister Ildefonso Guajardo, Foreign Minister Luis Videgaray and Chief Technical Negotiator Kenneth Smith Ramos and from Canada are Foreign Affairs Minister Chrystia Freeland, Ambassador David MacNaughton and former Prime Minister Brian Mulroney.
10. A simple clause in the NAFTA document allows any party to withdrawal with written notice to other parties. Trump can sign a new agreement before Congress reviews, but it is likely that negotiations will last well into 2018.