The history of the North American Free Trade Agreement (NAFTA) began in 1980 when candidate Ronald Reagan proposed a North American common market in his presidential campaign. The first move in creating NAFTA came when President Reagan made good on his campaign pledge and declared a North American common market as a future goal. During the early 1980s, with Mexico remaining aloof, Canada and the US signed a series of agreements that culminated in the Canada-US Free Trade Agreement in 1988. At this crucial juncture, Mexico signaled its willingness to join the negotiations and NAFTA talks began. On August 12, 1992, before the summer GOP convention, President George H.W. Bush initialed the deal. After losing the general election to William J. Clinton, Bush formally signed the treaty on December 17, 1992, saying during his Remarks on Signing the North American Free Trade Agreement “I’ve been privileged as Vice President and President over the past 12 years to be here on quite a few occasions, and I am so thrilled that this, the final one, is to sign the NAFTA agreement.”
As negotiated, the agreement was signed by the US, Canada, and Mexico, aiming to eliminate trade barriers among the three nations. Essentially, NAFTA was an extension of the Free Trade Agreement between Canada and the United States. Several other considerations beyond free trade under the scope of the NAFTA include intellectual property, telecommunications, and environmental protection. The treaty was to take effect on January 1, 1994, but ratification faced obstacles in the US Congress, especially from members of the Democratic Party. At the time of its ratification in Congress, more Republicans than Democrats supported NAFTA. With strong opposition by labor unions, a key ally for President Clinton was then-House Minority Whip (and later House Speaker) Newt Gingrich (R-Ga). Since NAFTA went into effect, bilateral trade between the US and Mexico amounts to more than $500 billion per year. The US is Mexico’s largest trading partner in merchandise (about 80% of its goods exports go to the US) while Mexico is America’s third-largest trading partner (after Canada and China).
Readers interested in learning more about NAFTA can review the Brooklyn Law School Library volume NAFTA at 20: The North American Free Trade Agreement’s Achievements and Challenges edited by Michael J. Boskin (Call No. HF1746 .N3326 2014), a Professor of Economics and senior fellow at Stanford University’s Hoover Institution. As chairman of the president’s council of economic advisers from 1989 to 1993, he helped initiate NAFTA. He writes that NAFTA was bold and controversial from the start. When first conceived, it was far from obvious that it would be possible given the circumstances of the times. Drawing from a December 2013 Hoover Institution conference on “NAFTA at 20,” his book brings together distinguished academics who have studied the effects of NAFTA with high-level policy makers to present a comprehensive view of the North American Free Trade Agreement. It looks at the conception, creation, outcomes so far, and the future of NAFTA from the perspective of economists, historians, and the policy makers in the words of those who participated in the negotiations and research. In the context of the fundamental economic and political transformation of North America, they discuss the trade, real wage, and welfare gains that NAFTA has produced for the United States, Mexico, and Canada, along with a review of the major energy markets within and among the three countries. The book has lessons from NAFTA for the future, both for NAFTA itself (if there is one) and for other trade agreements. The author stresses the importance of political leadership and providing information on the benefits of trade liberalization to voters and ill-informed politicians who cater to the fears of free trade opponents.
The BLS Library has in its collection a related title, an e-book NAFTA and Sustainable Development: History, Experience, and Prospects for Reform (Treaty Implementation for Sustainable Development), edited by Hoi L. Kong and L. Kinvin Wroth. On the twentieth anniversary of NAFTA’s ratification, the book outlines the scope of NAFTA and its impact on environmental issues and paths to reform. Analyzing the impact of the NAFTA on bio-engineered crops in Mexico, marine environmental effects, climate change, and indigenous rights, the book is an important contribution to the global conversation on international trade agreements and sustainable development.