NAFTA

Political, social, and economic relations between the United States and Mexico changed drastically with the introduction of the North American Free Trade Agreement, also known as NAFTA. The legislation was highly controversial and continues to be so. The agreement of free trade was reached in 1992. NAFTA was enacted on the first of January 1994, with the provision to remove barriers to trade among Mexico, the United States, and Canada. All non-tariff barriers to trade in the agriculture industry between Mexico and the U.S. were immediately removed, with all provisions to be removed by 2008, and many other tariffs would follow suit over the next 5 to 15 years. The barriers removed included Mexico's import licensing system, which was replaced by tariffs or tariff-rate quotas. According to Sue Greenfield and Harold Dyck, "By adding to the free trade areas of the U.S. and Canada, the North American continent will have a total market of 364 million consumers," which is currently 25% higher than the European Community (1992). The authors also note that, while this is a reason for passing NAFTA, there are opposing views as well. "Critics, on the other hand, contend the passage of NAFTA and subsequent expansion from the current two thousand foreign-owned assembly plants or maquiladoras…will only acerbate infrastructural problems that exist in Mexico" (Greenfield and Dyck 1992). Then President of Mexico Carlos Salinas de Gortari said in a televised announcement that, "'Above all, the agreement means more jobs and better-paid [ones] for Mexicans. More capital and investment will come, bringing more job opportunities here in our country, for our countrymen'" (Greenfield and Dyck quoting Darling and Miller 1992). The following impacts of NAFTA were quoted by Greenfield and Dyck (1992): · "Global competition and its ensuing productivity gains mean lower overall costs to consumers." · "lower prices for goods and services help increase a nation's standard of living." · "NAFTA should benefit the U.S. by helping to stimulate faster economic growth in Mexico. In turn, this should · enhance Mexican demand for more U.S. products and services." The more than 800-page North American Free Trade Agreement document is interpreted loosely by companies to either increase their profits or to lower their responsibilities. To view the document, visit The Council for Agricultural Science and Technology site at http://www.nafta-sec-alena.org/english/nafta/toc.htm or http://www-tech.mit.edu/Bulletins/nafta.html.