Original Nafta Agreement

Maize production in Mexico has increased since NAFTA. However, domestic demand for maize had grown beyond Mexican supply to the point of necessitying imports, well beyond the quotas initially negotiated. [71] Zahniser-Coyle reported that maize prices, adjusted for international prices, had fallen significantly in Mexico, but a subsidy program extended by former President Vicente Fox has kept production stable since 2000. [72] It has been proposed to reduce agricultural subsidies, particularly maize subsidies, in order to reduce the damage done to Mexican farmers. [73] On August 27, 2018, Trump and Mexico agreed on a bilateral trade agreement to replace NAFTA and threatened to ignore Canada. Canada joined on September 30, 2018. On November 30, 2018, the three countries reached an agreement. The new agreement is called the agreement between the United States, Mexico-Canada and has been ratified by the legislative branch of each country. Mexico ratified it on June 19, 2019. The United States ratified the agreement on January 29, 2020.

The Canadian Parliament ratified the USMCA on March 13, 2020. It is impossible to isolate the effects of NAFTA in the larger economy. For example, it is difficult to say with certainty what percentage of the current U.S. trade deficit, which reached a record $65,677 million at the end of 2005, is directly attributable to NAFTA. It is also difficult to say what percentage of the 3.3 million manufacturing jobs that were lost in the United States between 1998 and 2004 is the result of NAFTA and what percentage would have been created without this trade agreement. It cannot even be said with certainty that the intensification of trade between NAFTA countries is exclusively the result of the trade agreement. Those who support the agreement generally claim NAFTA loans for enhanced trade activity and reject the idea that the agreement has resulted in job losses or a growing trade deficit with Canada and Mexico ($8,039 million and $4,263 million respectively in December 2005). Critics of the agreement generally associate it with these deficits and job losses.

Despite the debate over its long-term effects, NAFTA is undoubtedly one of the most important trade agreements in recent history. The kick-off of a North American free trade area began with U.S. President Ronald Reagan, who made the idea part of his campaign by announcing his candidacy for president in November 1979. [15] Canada and the United States signed the Canada-U.S. Free Trade Agreement in 1988, and shortly thereafter, Mexican President Carlos Salinas de Gortari decided to address U.S. President George H.W. Bush to propose a similar agreement to make foreign investment after the Latin American debt crisis. [15] When the two leaders began negotiations, the Canadian government of Prime Minister Brian Mulroney feared that the benefits that Canada had gained through the Canada-U.S. free trade agreement would be undermined by a bilateral agreement between the United States and Mexico, and asked to be associated with the U.S.-Mexico talks.

[16] NAFTA represents 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 frees the three countries from trade barriers. Create a framework for the continuation of trilateral, regional and multilateral cooperation to expand and enhance the benefits of this agreement. However, Trump is not alone in criticizing the deal.