Monthly Contribution: The Future of NAFTA

February 5, 2009 at 1:34 pm

Daniele S. Longo
Northern Kentucky Chamber of Commerce Business Journal, February 1, 2009

The North American Free Trade Agreement (NAFTA), signed by Canada, Mexico and the United States in 1992 and enacted in 1994, NAFTA links the economies of the three countries by gradually eliminating trade barriers. Since the inception of NAFTA, trade among Canada, Mexico and the U.S. rose from $293 billion to $909 billion and each day the three North American countries conduct well over $2.5 billion in trade. For example, for every dollar of merchandise exported to China, the U.S Exports $4 to Canada and $2 to Mexico.

NAFTA represents a key tool for the economic development and its main objectives of eliminating trade barriers, promotion of fair competition, increase of investment opportunities and effective protection of intellectual property rights (see complete text of the NAFTA Free Trade Agreement at NAFTA Secretariat, should be sheltered at a time when the new Administration is planning to renegotiate the agreement. Regional communities and businesses –most of whom export to the NAFTA countries- are encouraged to send a strong message in support of NAFTA and the pending Free Trade Agreements for Korea, Colombia and Panama.

“As the new Administration is getting organized in Washington, we must all realize that the rest of the globe wants to get a step ahead of the North American economy. Our collective task, as ambassadors of the Northern Kentucky economy is to send an unwavering message: we can compete in global markets,” said Steve Stevens, president of the Northern Kentucky Chamber of Commerce.

U.S. officials evaluate the possibility of trade restrictions. However, the rest of the world is opening to new market opportunities by ratifying international trade agreements (China and New Zealand), building transnational coalitions (i.e. Switzerland joining the barrier free Schengen area of the European Union on January 1, 2009) or executing large scale logistic infrastructures (i.e. railway connecting China with Germany).
During its enforcement, NAFTA helped the three members grow in terms of Gross Domestic Product (54% for the United States, 56% for Canada and 48% for Mexico) and most of all, jobs. According to the Bureau of Labor Statistics, in 2007 a total of 13.9 million manufacturing workers produced $870 billion worth of exports and more than one third of the manufacturing output ($330 billion) was exported to Canada and Mexico. U.S. agricultural exports destined for Canada or Mexico has grown from 22% in 1993 to 30% in 2007 with Mexico being a critical export destination for products such as beef, rice, corn, pork, poultry, eggs, and cotton.

See the complete text of the NAFTA Free Trade Agreement at NAFTA Secretariat at


Entry filed under: Monthly Column, Trade.

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