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NAFTA North American Free Trade Agreement

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NAFTA North American Free Trade Agreement
The North American Free Trade Agreement, known usually as NAFTA, links Canada, the United States, and Mexico in a free trade sphere. NAFTA went into effect on January 1, 1994.
NAFTA called for immediately eliminating duties on half of all U.S. goods shipped to Mexico and gradually phasing out other tariff overNafta a period of about 14 years. Restrictions were to be removed from many categories, including motor vehicles and automotive parts, computers, textiles, and agriculture. The treaty also protected intellectual property rights (patents, copyrights, and trademarks) and outlined the removal of restrictions on investment among the three countries. Provisions regarding worker and environmental protection were added later as a result of supplemental agreements signed in 1993. This agreement was an expansion of the earlier Canada-U.S. Free Trade Agreement of 1989. Unlike the European Union, NAFTA does not create a set of supranational governmental bodies, nor does it create a body of law which is superior to national law. NAFTA, as an international agreement, is very similar to a treaty (indeed, in Spanish, it is styled a tratado). Under United States law it is classed as a congressional-executive agreement.
The agreement was pursued by the free-trade conservative governments in the US and Canada. In Canada, the Government was led by Brian Mulroney of the Progressive Conservative Party of Canada. The Canadian government worked aggressively with Republican President George H. W. Bush to create and sign the agreement. There was considerable opposition on both sides of the border, and the Clinton administration made passage of the agreement its major legislative initiative in 1993. After intense political debate and the negotiation of several side agreements, the House passed NAFTA by 234-200 (132 Republicans and 102 Democrats voting in favor) and the Senate passed it by 61-38. Some opposition persists to the present day. Recently in Canada, labour unions have removed their objections to the agreement from their platforms.


The United States and Canada have been arguing for years over the United States decision to impose a 27% duty on Canadain softwood lumber imports. Canada has filed numerous motions to have the duty eliminated and the collected duties returned to Canada. Canada has won every case brought before the NAFTA tribunal, the last being on August 10, 2005. The United States responded by saying "We are, of course, disappointed with the [NAFTA panel's] decision, but it will have no impact on the anti-dumping and countervailing duty orders," (Neena Moorjani, spokeswoman for U.S. Trade Representative Rob Portman.) The failure of the U.S. to adhere to the terms of the treaty has generated widespread political debate in Canada. The debate includes pulling Canada out of NAFTA, imposing counterveiling duties on American products, and shutting off energy shipments, especially natural gas to Chicago and the midwest during the winter of 2005. Some analysts have called the failure of the U.S. to abide by the treaty the greatest American affront to Canada since the War of 1812.

See Also:
link NAFTA Foreign Trade Statistics from the U.S. Census Bereau
link NAFTA Complete Document
link Visit our Maquiladora and Manufacturing section