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NAFTA is the North American Free Trade Agreement negotiated by former U.S. President George H.W. Bush and entered into force in 1994 under President Clinton. The agreement exists between the United States, Canada and Mexico and was originally created to reduce trade costs and strengthen North American trade. The agreement eliminated almost all tariffs and taxes on imports and exports. The agreement also freed all three countries from trade barriers. “It`s ironic that they want to fix a `terrible` deal by including provisions of the TPP, a deal that the government says is even worse,” Bill Reinsch, an employee of the Stimson Center, told Politico last year. Maquiladoras (Mexican assembly plants that absorb imported components and produce goods for export) have become the emblem of trade in Mexico. They moved from the United States to Mexico, hence the debate about losing American jobs. Revenues from the maquiladora sector have increased by 15.5% since the creation of NAFTA in 1994. [68] Other sectors have also benefited from the free trade agreement and the share of exports from non-border countries to the United States has increased over the past five years, while the share of exports from border countries has decreased. This has allowed for rapid growth in borderless metropolitan areas like Toluca, León and Puebla, all less populated than Tijuana, Ciudad Juárez and Reynosa.
According to a 2013 article by Jeff Faux published by the Economic Policy Institute, California, Texas, Michigan and other countries with high employment rates have been most affected by job losses due to NAFTA. [97] According to an article by EPI economist Robert Scott in 2011, about 682,900 U.S. jobs were “lost or ousted” by the trade deal. [98] Recent studies were consistent with Congressional Research Service reports that NAFTA had only a modest influence on manufacturing employment and that automation accounted for 87% of manufacturing job losses. [99] The politics of fear versus the politics of hope. Not only is the approval of NAFTA a victory for the U.S. economy and the American people, but it also hits organized labor and other protectionist forces. The agreement reaffirms america`s commitment to competition and free enterprise, which other nations are imitating. “NAFTA will break down trade barriers between our three nations, create the world`s largest trading area and create 200,000 jobs by 1995 in [the United States] alone,” President Clinton said. “The environmental and labor agreements negotiated by our administration will make this agreement a force for social progress and economic growth.” * Sept. 1, 2017: The week before the second roundtable in Mexico, which begins on September 1, Trump had repeatedly said that he would likely end the agreement if negotiations did not create his way.
Mexico has said it would be out of the question if Trump begins the process of withdrawing from NAFTA. On September 30, 2018, during the renegotiations, an agreement was reached on amendments to NAFTA. The next day, a renegotiated version of the agreement, referred to as the Agreement between the United States, Mexico and Canada (USMCA), was published. In November 2018, at the G20 summit, the USMCA was signed by President Trump, Canadian Prime Minister Justin Trudeau and then Mexican President Enrique Peña Nieto. Proponents of NAFTA in the United States have stressed that the pact is a free trade agreement and not an economic agreement. [37] The free movement of goods, services and capital based therein did not extend to labour. By proposing what no other similar agreement had attempted to open up to industrialized countries to “a great third world country”[38], NAFTA renounced the establishment of a common social and employment policy. . . .