NAFTA North American Free Trade Agreement Chapters 11 & 15 North American Free Trade Agreement Chapters 11 & 15

Economic Stability ✦ Ensuring economic stability within a nation- state ✦ NAFTA - seek to break down trade barriers, such as tariffs, that restrict trade ✦ Protectionism - restrains trading between states, through tariffs and quotas to discourage imports, and prevent foreign take overs

NAFTA Background 1950s - a continentalist approach was spoken about Merchant-Heeney Report - called for Canada to recognize the special position of the United States and pursue quiet diplomacy on global issues of importance to the United States should not visibly challenge US policy but coordinate its actions NAFTA is an example of this coordination The aim was (Canada) to obtain easier access to the large markets to the south some say that NAFTA does not go as far as the EU (no joint political administration or currency)

NAFTA seeks to reduce trade barriers such as tariffs, regulations and subsidies to let goods flow easily between member nations (Canada, USA, Mexico) Harmonizing these rules and regulations result in sacrificing sovereignty What has been lost and gained through this agreement?

NAFTA

NAFTA ✦ Agreement was signed on Dec 8, 1993 ✦ Brian Mulroney (Canada) ✦ Carlos Salinas de Gortari (Mexico) ✦ Bill Clinton (USA) ✦ 2007, largest trade bloc in the world (based on purchasing power parity)

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NAFTA Information There has been job growth, but how can it be determined how much of this resulted directly from NAFTA? Came into effect Since signing, trade with the US has increased 40% NAFTA created the largest trading area in the world (406 million people) Auto sector is the largest ($104.1 billion ) nearly 2/3 of Canada’s forest products are exported to the United States

NAFTA Information Canada is the US largest energy trading partner ($66.7 billion) being exported annually US/Canadian electrical grids are interconnected Air traffic between the two countries has significantly increased since an agreement was signed in 1995 The US is Canada’s largest foreign investor, with 72% of total foreign investment. Canada is USA 3rd largest foreign investor

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Flight Video American flight traffic

Economic Security Economic Security - term used to make rules to protect markets and ensure a supply of resources Ex. Canada must continue to export petroleum to the United States at levels comparable to the previous three years Were an oil shortage to occur, we could not restrict exports in favour of domestic use The increased reliance upon oil sands productions in Alberta is a direct consequence

Alberta Oil Sands

Oil Sands Production

Potential New Markets

Potential Pipeline Projects

National Treatment National Treatment - This clause in the agreement means that foreign investors have the unrestricted right to invest in member nations without conditions and without limits As a result, Canada has lost the ability to say that only investment that will help Canada is acceptable.

One American thought

Increas e of Trade

NAFTA ✦ Effects are both positive and negative ✦ Mexico has seen real income rise and poverty rates fall ✦ Others argue that business owners and elites benefit ✦ Negative impact on Mexican farmers - saw food prices fall based on cheap imports from US agribusiness ✦ more investment in education

Ideas and Opinions “Policy protecting cultural industries is still subject to severe economic retaliation under the terms of the global trade regime. Under these conditions, the actual meaning of the cultural exemption, for which the Canadian government has fought so gamely, is difficult to ascertain” Darin Barney, Communication Technology, 2005

One Perspective NAFTA... has been in effect almost 12 years and a new stage, NAFTA Plus is in the works the elites of the three countries have been aggressively moving forward to build a new political and economic entity A “tri-national merger” is underway that leaps beyond a single market to a single state, called “North America”

NAFTA Superhighway

Canada’s Involvement ✦ To what extent should Canada’s involvement in this form of international relations benefit Canada? (p.242) ✦ NAFTA - beneficial or detrimental? (p.245) ✦ What criteria would you use to determine if Canada should remain in NAFTA?