North American Free Trade Agreement
The North American Free Trade Agreement (NAFTA) is a multilateral agreement establishing a free trade zone between the United States, Canada, and Mexico. NAFTA eliminated trade Tariffs on some goods and scheduled other tariffs for gradual reduction or elimination. It is a test case for efforts at managing global change.
NAFTA differs significantly from the European Union trade union. In the European model, each member nation adopts a common set of customs rules and once goods have entered the union they may move customs free within the union. In contrast, under NAFTA, tariffs between member nations remain in place with an exemption for NAFTA member nation source goods. Thus, foreign source goods imported, for example, into Mexico, do not pass customs barrier free into the United States.
NAFTA was authorized by the United States Congress in 1993 and signed into law by President Bill Clinton on September 14 of that year. NAFTA was challenged by some Democratic members of Congress on the grounds that it would subject US workers to unfair wage competition with cheaper workers in Mexico and Canada.
One study estimates that NAFTA has resulted in about 766,000 lost jobs in the United States, with the losses occurring in every single state.
NAFTA remains highly controversial among labor and anti-globalization groups in the U.S. Some argue that anti-corporatization is a more accurate term for critics. Corporate "free market" advocates and others go on to say that NAFTA will eventually improve and/or has improved the average welfare of workers. Critics maintain that these arguments are smokescreens that allow capital movement freedom in markets while still regulating labor freedom (the limited ability of laborers to cross borders or to organize unions for example) and at the same time escape environmental regulations in developed markets. The "Free" in the agreement, this argument asserts, refers to freedom to exploit workers and freedom to plunder the environment.
One of the most onerous provisions of NAFTA is its Chapter 11, which deals with investor-government relations. It allows international investors to sue a government for the loss of future profits caused by local regulations on enterprises. Chapter 11 undermines the ability of governments in the three NAFTA countries to craft, for example, environmental legislation.
The Left has believed in some forms of globalization since the nineteenth century (see movements that fought for the globalization of unions, the Industrial Workers of the World, being but one example).