By Alexandra Moffit

Photo: President Clinton Signing NAFTA, Creative Commons License

1. The North American Free Trade Agreement (NAFTA) is a treaty between the United States, Canada, and Mexico that’s been in effect since 1994.

The region is home to over 444 million people. Before NAFTA, the United States and Canada created a free trade agreement in 1989. The three countries started negotiations under the tenure of President George H. W. Bush, and the treaty was completed and signed into law by President Clinton.

2. NAFTA was put in place to encourage economic integration between Canada, the United States, and Mexico.

NAFTA pushes countries to open their markets and eliminate tariffs. Another major goal of the treaty was to create and encourage North American competitiveness in the world. NAFTA was to create an economic zone like the European Union.

Similar to the European Union, an open economic zone would allow each country to specialize. In the United States, one oft-cited example is manufacturing. Since manufacturing is often cheaper in Mexico, some companies have moved production from the United States to Mexico under NAFTA. On the other hand, surplus agriculture such as almonds in the United States could be exported to Mexico or Canada.

3. NAFTA isn’t just an agreement – there are many institutions in place to facilitate it.

NAFTA includes a Free Trade Commission. This commission oversees the work of several working groups, committees, and other entities of NAFTA. There are many working groups in place to encourage investment and trade. These are in place to encourage cooperation in areas such as labor and environmental policies. Important aspects of NAFTA include customs, goods, agriculture, and business. Millions of people in each of the three countries depend on NAFTA every day.

4. President Trump hates NAFTA.

            

President Trump blames NAFTA for the loss of some U.S. jobs to Mexico. He has called the treaty the “worst trade deal in history.”  President Trump also remarked, “I’ve been opposed to NAFTA for a long time, in terms of the fairness of NAFTA.”

As President Trump said, the treaty caused some job loss in the United States’ Rust Belt, specifically in the manufacturing sector. However, millions of other American jobs depend on NAFTA In addition, there is no proven direct causation for any net loss of jobs being because of NAFTA, as job losses depend on many factors. For example, around the same time as NAFTA, China emerged as a manufacturing powerhouse and joined the World Trade Organization. China joining the WTO is one of the many potential factors that resulted in job losses in the United States’ manufacturing sector since 1994.

5. The United States, Canada, and Mexico have been renegotiating NAFTA for several months, and there is no end in sight.

Since President Trump took office, renegotiating NAFTA has been a top priority. The three countries have been negotiating a rewrite of the treaty for the past few months, with four rounds of talks completed so far.

In the most recent meetings, the NAFTA negotiators have decided to extend negotiations into 2018. The three North American powers have not been able to find common ground on several important points. These contentious points include how to rewrite the treaty and whether NAFTA should have to be renewed every five years. The fate of NAFTA is in jeopardy. Many experts believe that the dissolution of NAFTA could jeopardize North American competitiveness, making competing with China and the European Union more difficult. The current American climate of protectionism could hurt the economic growth of all three countries in the short term and long term.

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November 16, 2017

By Alexandra Moffitt

This week, a fourth round of negotiations begin in Ottawa as the United States, Canada, and Mexico meet to renegotiate the North American Free Trade Agreement (NAFTA). NAFTA covers issues of customs, government procurement, and intellectual property rights, among others. Millions of Americans depend on NAFTA every day directly and indirectly. On October 5^th, the Atlantic Council released a report entitled “What if NAFTA ended? The Imperative of a Successful Renegotiations” and held an event on the topic. Following keynote remarks from Representative Will Hurd and the Honorable Bill Zoellick, the drafters of the Atlantic Council report and Mr. Zoellick held a roundtable discussion of the effects of NAFTA and the importance of maintaining the agreement. The atmosphere framing the discussion are President Trump’s anti-NAFTA remarks in recent months.

In his keynote, Congressman Will Hurd, a Member of the U.S. House of Representatives from Texas, said, “sometimes we forget to talk about things we take for granted.” He stressed that NAFTA created North American competitiveness in the world, and that a lot of Americans do not know that Mexican companies create jobs in the U.S. He underscored the importance of keeping NAFTA for the economic benefits.

Former U.S. Trade Representative Bill Zoellick indicated that there were serious risks and huge implications if NAFTA were lost. NAFTA is a continental base for the 21^st century, which connects three democracies and 500 million people. NAFTA allows the three countries to better compete in the global system. Zoellick said, “bilateral trade deficits are negative trade income” to President Trump, which Trump equates to losing.  Zoellick called this “economic nonsense.” NAFTA negotiators are trying to push other countries to open their markets, and remove exemptions, while removing obligations from the organization.    

After Mr. Zoellick’s remarks, the event transformed into a panel discussion of the NAFTA renegotiations with Phil Levi, Daniel Schwanen, and Javier Mancera serving as experts for the United States, Canada, and Mexico respectively. Each of the three drafted sections of “What if NAFTA ended? The Imperative of a Successful Renegotiations.” Phil Levi said there is a lot of uncertainty surrounding NAFTA. After President Trump’s Executive Order on NAFTA, businesses and agriculture came out against it. Mr. Levi cautioned that the most difficult issues in the NAFTA renegotiation have not been discussed yet.

Javier Mancera indicated that Mexico is looking to add new chapters rather than renegotiating previously decided ones. Because Chapters 11 and 19 of NAFTA each provide for a private right of action pursuant to violations, these chapters are immensely important to Mexico. Mr. Mancera mused that it was surprising that American Republicans would want to remove that clause. Daniel Schwanen stressed that Canadians have a consensus that trade helps the country. This feeling of goodwill towards international trade buoys Canada’s stance on NAFTA.

The most captivating moment of the discussion came at the end. Panelists were asked what percentage they gave that President would pull out of NAFTA. The panelists gave their percentages as 50%, 50%, 40%, and more than 50%. These percentages from experts in the field offer a chilling picture for the future of NAFTA. North America’s competitiveness in global trade are at a turning point. Will President Trump jeopardize North America’s status in the world?

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October 14, 2017

By Alex Yeager

The Trans-Pacific Partnership is again drawing criticism, but not for its trade implications.  Instead, the much-maligned deal is now being criticized for the special legal rights it might grant financial institutions.  The agreement is designed to relax trade barriers between the United States, Japan, Canada, Mexico, and eight other pacific-rim nations.  Yet the fear is that under the agreement banks may be able to systematically circumvent domestic court systems to bring special arbitral claims against foreign governments.

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November 30, 2015

By Megan Abbot

It is difficult to estimate the number of people worldwide who are detained in institutions against their will.  People with disabilities are especially vulnerable to being locked up under the guise of protection and rehabilitation. Such segregation violates international law and should outrage human rights supporters everywhere. 

The United Nations Convention on the Rights of Persons with Disabilities (CRDP) codifies the rights of people with disabilities and is part of a broad paradigm shift.  Historically, disability has been treated as a normative failing, a medical illness that should be corrected to help a person live a normal life.  Today the social model of disability seeks to build understanding of the many cultural, physical, or systemic obstacles that prevent people from participating equally in society on the basis of disability.  Disability, then, is a construction.  The onus of adaptation is not on the individual to overcome their disability.  The onus is on society to build a more inclusive environment for all.

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October 27, 2015

By Megan Abbot

Sonia Nazario reports for the New York Times that the U.S. is paying tens of millions of dollars to Mexico to externalize border controls, preventing Central American migrants fleeing gang and narco-cartel violence from entering the U.S. Mexican President Peña Nieto announced the border control policy under the guise of protecting the human rights of migrants coming legally through Mexico.  In fact, the repression has forced migrants, including children, into traveling in more dangerous ways, traveling alone, at night, or on foot through dangerous areas.  Nazario’s piece profiles one family fleeing San Pedro Sula, Honduras, a city with one of the highest homicide rates in the world.  After the murders of her brother and her 14-year-old son at the hands of gang violence, and fearing that the same gang could come after her and her children in Guatemala, July Elizabeth Pérez sought to join family living legally in Florida.  Instead, she was detained in Mexico on her way to the U.S., facing abusive and filthy conditions of detention, and a very difficult asylum process ahead.  July’s story is illustrative of the policy shift that has resulted in fewer Central Americans making it to the U.S., and many arrested and facing human rights abuses in Mexico.

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October 26, 2015

By Evan Abrams

The recent Argentine debt crisis, brought on by a series of court decisions requiring the country to pay holdouts from earlier restructurings, has made waves in sovereign debt markets and prompted a rethink of the legal terms behind debt issuances. Mexico, who has historically been a leader in innovative debt offerings, made news last week by changing several key legal provisions on the bonds it offers. According to the Financial Times, the changes were aimed at easing potential restructuring deals and discouraging holdouts. Experts agree that many other emerging market countries are likely to follow suit and adopt similar language going forward.

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November 26, 2014

By Craig Tarasoff

The World Trade Organization has ruled that the US has not brought its meat labeling regulations in compliance with international fair trading rules. This follows a 2012 WTO ruling that the United States’ meat-labeling program, which required retailers to label meats with their countries of origin, unfairly discriminated against Canada and Mexico. The US has missed its deadline to change its regulations to provide equal treatment to meat and pork imported from those two countries. According to Reuters, if the US does not make changes acceptable by the WTO Appellate Board, Mexico and Canada can impose trade sanctions on the US.

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November 25, 2014

By Catherine Kent

Last week, Mexico and Canada prevailed on their complaint before the WTO, which found that the U.S. labeling laws for meat have failed to comply fully with international fair trading rules. The U.S.’s challenged program – “Country of Origin Labeling” or “COOL” – requires that grocery stores and other meat retailers list where the meat was born, raised, and slaughtered on the label. The Canadian government maintains that this labeling law has resulted in fewer Canadian pigs and cattle being exported to the U.S. since 2009.

If the U.S.’s revised labeling rules are not approved by the WTO’s Appellate Body, the U.S. may face some serious trade sanctions from the two disgruntled countries. U.S. pork producers want the law fixed quickly to avoid any “financially devastating” retaliation from two of the U.S.’s largest trading partners; beef producers in the U.S. would like to eliminate the law altogether. Read more about these developments at Reuters. 

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October 29, 2014

By Jieying Ding

Mexico now stands as Japan’s top trade partner in Latin America, and Japan is Mexico’s second-largest trade partner in Asia. The deepening trade ties between Japan and Mexico have presented the United States with an opportunity to wield more influence in the Asia-Pacific region. According to the U.S. News, Washington must pay greater attention to the opportunities presented by growing friendship between Japan and Mexico to wield U.S. influence.  For example, Mexico and the United States should together be discussing ways to deepen economic cooperation with Asia-Pacific countries.

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October 16, 2014

By Katie Bacharach

Edgar Tamayo, a Mexican citizen, has been executed in Texas despite a recent statement by Mexico’s foreign ministry that going ahead with the execution would be a "clear violation" of the United States’ international obligations, according to the LA Times and Reuters. 

Tamayo was convicted of fatally shooting a Houston police officer in 1994. However, Tamayo was never informed of his right to diplomatic assistance, enshrined in the Vienna Convention on Consular Relations. In 2004, the International Court of Justice ruled that the United States had violated the Vienna Convention for the case of 51 Mexicans, including Tamayo, who had been sentenced to the death penalty without being informed of their rights to consular assistance. The court ordered the United States to reconsider the convictions. 

U.S. Secretary of State John Kerry had also urged Texas to reconsider the execution because it could impact the way American citizens are treated abroad.

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January 23, 2014

By Aliza Kempner

Attention Coca-Cola fans, the beloved recipe might be changing for those of you in Mexico. While the top-selling soda giant switched out cane sugar in its recipes for corn syrup in the United States in the '80s, the Mexican version of the recipe has stuck with cane sugar. 

Arca, Coke’s Mexican bottler, has concerns about the elasticity of demand for its original beverage in light of new soda taxes and may shift to lower cost ingredients. Read on to see what Forbes has to say about the circumstances surrounding this potential change.

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November 16, 2013

By Aliza Kempner

Mexico’s export industry is learning to stay current. With competition growing from other low-cost locations and the lower house of Mexico’s congress approving President Enrique Peña Nieto’s proposal to eliminate a range of deductions and allowances benefiting factories, the companies that use these factories are trying to get involved in design and development.  

Successfully staying in the game could allow the Mexican companies to hold onto American investment in their products as the United States looks closer to home in response to rising costs in China. The Economists examines the context surrounding these departures from the tax policies of the past fifty years.

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November 14, 2013

Photo Courtesy of NOAA.

By Andrew Lurié*

After more than twenty years of legal wrangling, Mexican tuna fisheries still remain unable to access the U.S. market using the Dolphin Safe label, which  is a de facto requirement for having your tuna actually sell in the U.S.  The Mexican tuna industry stubbornly continues to “set on” dolphins — exploiting the mysterious phenomenon involving tuna schooling below dolphin pods in the Eastern Tropical Pacific Ocean (ETP) by encircling the dolphins in their nets in order to catch the tuna below — leaving their tuna ineligible for the coveted Dolphin Safe label. 

Last year, the Appellate Body of the World Trade Organization (WTO) found that the Dolphin Safe labeling law—the Dolphin Protection Consumer Information Act (DPCIA)—provided “less favorable treatment” to Mexican tuna products in violation of WTO provisions.[1]  As a result, Mexico figured that the U.S. would finally be forced to relax its Dolphin Safe requirements with respect to setting on dolphins in the ETP.  However, the U.S. instead chose to amend other portions of the rules issued pursuant to the DPCIA in order to come into compliance with the WTO decision, leaving intact the prohibition on setting on dolphins.  Thus, it was no surprise that Mexico immediately denounced the U.S. compliance measure as insufficient and announced that it will pursue consultations with the U.S. in the WTO.

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November 11, 2013

Photo courtesy of USDA.

By Gary N. Horlick*

Canada and Mexico have started formal processes in the World Trade Organization to seek authorization to impose prohibitive tariffs on possibly billions of dollars of U.S. exports.

This follows a decision by the Appellate Body of the World Trade Organization (WTO) that certain U.S. country-of-origin-labeling regulations (COOL) discriminate against imported products in violation of WTO rules.  The issue began as a “minor” section of the 2002 farm bill, one of those “must pass” mammoth pieces of legislation that attract all types of special-interest provisions.  Some NGOs and smaller farmer and rancher organizations pushed for the legislation (especially some cattle ranchers and swine producers in the northern United States who were distressed at the sight of live cattle and swine from Canada arriving for processing in the United States).  The legislation mandated labeling meat processed in the United States from imported animals following a complicated series of rules based on where the animal had been born, raised, and processed.  The effect, no doubt intentional, was to create a price penalty paid for Canadian and Mexican cattle compared to local cattle.

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November 04, 2013

By Abraham Shanedling

The U.S. Department of Treasury announced Tuesday the designation of six companies and five individuals linked to Los Gueros, a Mexican drug-trafficking organization.

The individuals designated included family members and associates of Los Gueros’ leaders. The designated businesses are owned or controlled by the organization and are suspected of being used by the group to launder their illicit proceeds. These companies include a tequila maker and its two parent companies, according to the Treasury Department.

Los Gueros, based in Guadelajara, Mexico, is responsible for transporting multi-ton quantities of narcotics into the United States, and hid its ownership interest in companies and properties for years by using aliases, the Treasury Department said in its statement.

The Treasury Department had previously placed Los Gueros and its four leaders under Kingpin Act sanctions in February 2011.

Read more about this at the Wall Street Journal.

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September 25, 2013

By Aliza Kempner

With Congress set to implement new country-of-origin (COOL) requirements in response to a World Trade Organization (WTO) ruling declaring the old rules protectionist, a U.S. federal judge is having none of meat packers' complaints that these requirements will cost them millions.

The Department of Agriculture’s new labeling procedures require that meat labels separately list where livestock was born, raised, and slaughtered, replacing imprecise descriptions like “Product of USA, Canada.” With both Canada and Mexico threatening trade sanctions, including up to $1 billion in tariffs on U.S. products ranging from meat and apples to jewelry and furniture, this opinion could have far-reaching consequences.

Politico gives us the lowdown on Judge Jackson’s 76-page ruling and its implications. 

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September 15, 2013