NAFTA at 25: Promises Versus Reality

By Public Citizen's Global Trade Watch

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The North American Free Trade Agreement (NAFTA) went into effect on January 1, 1994 after a contentious national debate. Proponents of the pact, signed by President George H.W. Bush and pushed through Congress by President Bill Clinton, promised rosy outcomes. They said NAFTA would improve the U.S. trade balance with Mexico and Canada, create one million new U.S. jobs in its first five years alone, improve environmental conditions and bring Mexico’s living standards closer to those in the U.S., which would reduce immigration pressures. None of these outcomes materialized.

Instead, opponents’ concerns became reality. NAFTA’s investor protections promoted mass job outsourcing, with almost one million jobs certified as lost to NAFTA just under one narrow government program. The U.S. trade deficit with NAFTA countries exploded, with import surges shuttering U.S. manufacturers and turning a pre-NAFTA agricultural trade surplus with the other NAFTA countries into a deficit. Consumer and environmental safeguards were successfully attacked in NAFTA tribunals, and imports of unsafe food soared while safety inspections declined. Real wages in Mexico declined from pre-NAFTA levels that already had been miserably low, and millions of Mexican farmers lost their livelihoods, pushing many to make the perilous journey to seek work in the U.S. The fallout from NAFTA ended decades of U.S. bipartisan congressional consensus in favor of trade agreements.

As a renegotiated NAFTA 2.0 deal remains a work in progress, this infographic report spotlights why the NAFTA model must be replaced. Improvements are needed to the NAFTA 2.0 deal signed on Nov. 30, 2018 so that, at a minimum, a new deal will stop NAFTA’s ongoing damage to workers and the environment.

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