What Did The North American Free Trade Agreement Do

Additional ancillary agreements have been adopted to allay concerns about the potential impact of the treaty on the labour market and the environment. Critics feared that U.S. and Canadian companies in Mexico would have generally low wages, which would lead to a shift of production to Mexico and a rapid reduction in manufacturing employment in the United States and Canada. Meanwhile, environmentalists were concerned about the potentially catastrophic effects of rapid industrialization in Mexico, which does not have experience in implementing and enforcing environmental legislation. Possible environmental problems were raised in the North American Environmental Cooperation Agreement (NAAEC), which established the Commission for Environmental Cooperation (CEC) in 1994. Agriculture, in particular, has seen a boost. Canada is the largest importer of U.S. agricultural products, and Canadian agricultural trade with the United States has more than tripled since 1994, as has Canada`s overall agricultural exports to NAFTA partners. NAFTA has long been a political objective. In 2008, then-Presidential candidate Barack Obama responded to widespread trade skepticism within the Democratic base by promising to renegotiate NAFTA to incorporate stricter labor and environmental standards. The Obama administration tried to address NAFTA issues during the Trans-Pacific Partnership negotiations, a massive trade agreement with 11 other countries, including Canada and Mexico.

The TPP was deeply unpopular – Hillary Clinton ultimately opposed the deal during her 2016 presidential bid – and President Trump withdrew the United States from the TPP in one of his first official acts. It is impossible to isolate the effects of NAFTA in the larger economy. For example, it is difficult to say with certainty what percentage of the current U.S. trade deficit, which reached a record $65,677 million at the end of 2005, is directly attributable to NAFTA. It is also difficult to say what percentage of the 3.3 million manufacturing jobs that were lost in the United States between 1998 and 2004 is the result of NAFTA and what percentage would have been created without this trade agreement. It cannot even be said with certainty that the intensification of trade between NAFTA countries is exclusively the result of the trade agreement.