Nafta Report

  • View

  • Download

Embed Size (px)



Text of Nafta Report


INTRODUCTION NAFTA AND ITS PURPOSE OBJECTIVES OF NAFTA The North American Agreement on Environmental Cooperation The North American Agreement on Labor Cooperation



Does NAFTA really promote free trade? CONCLUSION REFRENCES

INTRODUCTIONNAFTA AND ITS PURPOSE NAFTA is short for the North American Free Trade Agreement. NAFTA covers Canada, the U.S. and Mexico making it the worlds largest free trade area. NAFTA was launched 20 years ago to reduce trading costs, increase business investment, and help North America be more competitive in the global marketplace. The first of NAFTA's stated objectives is to "eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between" the Parties. This goal is being accomplished as the various provisions of the NAFTA are phased in which eliminate duties, harmonize procedures, recognize standards as equivalent and encourage the exchange of information. In addition, the NAFTA created some twodozen working groups, committees and subcommittees to advance the objectives of the Agreement. Article 316.3 emphasizes the importance of facilitating trade in goods and provides a means for ensuring that, as the NAFTA is implemented and as its various working groups meet, sufficient communication takes place to assure that the common goal of facilitating the cross-border movement of goods is undertaken in a comprehensive, coordinated and efficient manner. NAFTA was signed by President George H.W. Bush, Mexican President Salinas, and Canadian Prime Minister Brian Mulroney in 1992. It was ratified by the legislatures of the three countries in 1993. The U.S.

House of Representatives approved it by 234 to 200 on November 17, 1993. The U.S. Senate approved it by 60 to 38 on November 20, three days later. It was signed into law by President Bill Clinton on December 8, 1993 and entered force January 1, 1994. Although it was signed by President Bush, it was a priority of President Clinton's, and its passage is considered one of his first successes. Grant the signatories Most Favored Nation status. Eliminate barriers to trade and facilitate the cross-border movement of goods and services. Promote conditions of fair competition. Increase investment opportunities. Provide protection and enforcement of intellectual property rights. Create procedures for the resolution of trade disputes. Establish a framework for further trilateral, regional and multilateral cooperation to expand NAFTA's benefits. NAFTA has eliminated trade barriers, increased investment opportunities, and established procedures for resolution of trade disputes. Most important, it has increased the competitiveness of the three countries involved on the global marketplace

0BJECTIVES OF NAFTA1. The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, mostfavored-nation treatment and transparency, are to: a) Eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories of the Parties; b) Promote conditions of fair competition in the free trade area; c) Increase substantially investment opportunities in the territories of the Parties; d) Provide adequate and effective protection and enforcement of intellectual property rights in each Party's territory; e) Create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes In his October 1992 campaign address, Clinton set out US negotiating objectives for the labor and environment side agreements. Clinton argued that the environment side agreement should create an environmental protection commission to clean up and prevent water pollution and to encourage the enforcement of each country's domestic environmental laws through education, training, and a commitment of resources. Similarly, Clinton stated that the labor side agreement should create a labor commission to encourage high worker standards and safety and to educate, train and develop minimum standards for the


SUB AGREEMENTS UNDER NAFTAThe environment and labor side agreements have two main objectives: (1) To improve environment and labor conditions in North America through cooperative initiatives. (2) To mediate environment and labor disputes. The side agreements create transactional environment and labor commissions to carry out these objectives. The main goals and achievements of each agreement is examined in turn below.

The North American Agreement on Environmental Cooperation The negotiation of the NAFTA provoked numerous concerns about the impact of increased trade and investment on environmental conditions in the region. The most widely-cited problems raised by the environmental community in the United States involved: (1) worries that US environmental protection standards would be driven down in NAFTA member countries by businesses moving or threatening to move production to countries with lower environmental standards in order to gain a cost advantage; (2) that lax Mexican environmental enforcement could result in a "pollution haven" in Mexico which would threaten the competitiveness of manufacturing facilities in the United States; (3) and that pollution "spillover" into the United States would rise as Mexican production, especially in the US-Mexico border region, increased.3 The NAAEC was created to respond to environmental concerns related to the NAFTA.

The NAAEC has these broad goals: (1) To encourage improvement of environmental conditions in North America, through cooperative initiatives, (2) To provide a mechanism for mediating environmental disputes. The NAAEC provides an institutional structurethe Commission for Environmental Cooperation (CEC)to implement these environmental objectives. (3)The CEC consists of an independent Secretariat located in Montreal, a Council of cabinet level representatives from each NAFTA country, and a Joint Public Advisory Committee (JPAC) composed of fifteen citizens, five from each member country. (4) The Secretariat carries out the day-to-day activities of the CEC, while the Council meets annually and holds special sessions at the request of any NAFTA member. (5) The JPAC provides a channel for public input on Council deliberations and Secretariat activities.

Goal 1: Cooperation Agenda The CEC has established a tripartite work program to promote improvement of environmental conditions in North America. The 1997 CEC total budget was US$9.9 million: US$3 million from each member country and US$0.9 million from other sources.6 of the total budget, US$2.7 million was used for direct program expenses.

The CEC has given priority to the protection of human health and the environment. In that area, the Commission agreed at the regular session of the CEC Council on October 13, 1995 to create regional plans for reducing or phasing out selected persistent organic pollutants. Regional plans have been developed for PCBs, chlordane, DDT, and mercury. Other initiatives related to human health and environment include programs on limiting adverse climate change effects and a program to develop a North American pollutant release inventory . A significant portion of CEC cooperative program resources (24 percent of total direct project costs in 1997) have been devoted to programs related to habitat and species. Initiatives in this area include the creation of a set of North American ecosystem maps, the development of a Network of Important Bird Areas and an agreement to increase protection of Marine and Coastal Area Ecosystems. Programs have also been created to enhance existing conservation efforts for migratory songbirds and the Monarch Butterfly. The remaining cooperative program resources have been spent on a variety of programs: Environment, Trade and Economy,9 and Information and Public Outreach (20 percent of total direct project costs in 1997) and Enforcement Cooperation and Law (16 percent of total direct project costs in 1997). Goal 2: Dispute Settlement The NAAEC contains three provisions to resolve environmental disputes: (1) Investigations of controversial issues initiated by the Secretariat. (2) Submissions by non-governmental organizations (NGOs) and individuals

(3) Government initiated consultations under Part V regarding enforcement. The North American Agreement on Labor Cooperation The NAALC was developed to mitigate concerns that NAFTA would distort labor markets in both the United States and Mexico. The two main labor concerns were that Mexico has poorer working conditions and labor standards, and that low Mexican wages and poor enforcement of Mexican labor standards would attract investment to Mexico, depriving US workers of jobs and driving down US wages. The NAALC has two broad goals: (1) to encourage the improvement of labor conditions in North America through cooperative activities, including the promotion of a set of eleven labor principles;21 and (2) to provide a mechanism for mediating labor disputes. To fulfill these objectives, the NAALC created the Commission for Labor Cooperation (CLC), composed of a Council of cabinet-level ministers from the three NAFTA countries and a Secretariat with an annual budget of US$1.8 million in 1996. The NAALC also requires that each government establish a National Administrative Office (NAO) within its Labor Ministry. The NAOs serve as a point of contact between the domestic government agencies, the NAOs of the other NAFTA countries, and the Secretariat. They are charged with responding to public requests regarding labor law matters in the other NAFTA countries and helping the Commission carry out its coo