by Quentin Morris

Created on: December 14, 2008

NAFTA is an acronym which stands for the North American Free Trade Agreement. It is a trilateral trade agreement between the United States, Canada and Mexico which facilitates trade in this area. In terms of purchasing power of the member states, NAFTA is the biggest trade agreement in the world. NAFTA has been hailed by some economists as a successful tool for promoting trade, especially for Mexico, while others argue that it only benefits big business, leaving small Mexican producers no better off than before. By tracing the evolution of NAFTA from its foundation in 1993, this article will try to establish what NAFTA was intended to be and what it has actually become.

Origins

The current NAFTA agreement was the result of a long process of negotiations between big business on the one hand and labor and environmental groups on the other. The original treaty was signed in October 1992 however it was not until December 8th 1993, that Bill Clinton of the USA, Brian Mulroney of Canada and Carlos Salinas de Gortari signed what was to become the most important trade agreement in North America. In order to appease the environmentalists and labor unions two supplemental agreements were added to the treaty.

The first of these was the North American Agreement on Environmental Cooperation, NAAEC[1]. This agreement ensures that each member state enforces their own environmental laws, to prevent regressive laws from Mexico being enacted in Canada in the USA. The Commission for Environmental Cooperation, which was created as part of the NAAEC, is designed to provide environmental recommendations to the member states to foster environmental protection. A Development Bank NADBank) was also established to help fund pollution reduction while the Border Environmental Cooperation Commission (BECC) is a separate financial body which has funded environmental projects in Mexico.

The second supplemental agreement was the North American Agreement on Labor Cooperation or NAALC[2]. This agreement was designed to facilitate negotiations between the member states over organized labor problems. It was also designed to improve communications between trade unions in order to make campaigning for better working conditions easier and more effective. The NAALC represents the first time agreements on labor and trade have been linked in a treaty.

Aims and effects

The NAFTA agreement came into full effect in 1st January 1994. The objectives of the treaty are outlines in article 102 and include the following:

a)

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