North American Free Trade Agreement (NAFTA)
What is NAFTA?
The North American Free Trade Agreement (NAFTA) went into effect on January 1, 1994 between the United States, Mexico and Canada.
Negotiated behind closed doors with hundreds of official corporate advisors, NAFTA was radically different than past trade deals that focused on traditional trade matters, like cutting border taxes. Instead, most of NAFTA's provisions grant new powers and privileges to multinational corporations.
These new powers make it easier for corporations to outsource jobs and attack the environmental and health laws on which we all rely. (Check out our list of the most egregious investor cases here.) NAFTA's "investor protections" create incentives for corporations to relocate production and jobs elsewhere. Indeed, the U.S. has lost more than 930,000 American jobs due to NAFTA, according to the Trade Adjustment Assistance (TAA) database.
Plus, NAFTA guts the Buy American policies that require the government to buy American-made goods when spending our tax dollars. This outsources our tax dollars rather than investing them to create jobs here.
NAFTA has also lowered U.S. wages, increased inequality, and hurt U.S. manufacturing and agriculture in all 50 states. At the same time, it has crippled the Mexican economy, driving millions from their homes.
A Vast Expansion of Corporate Power
At the heart of deals like NAFTA are the outsourcing protections and new rights for multinational corporations to sue the U.S. government in front of a tribunal of three corporate lawyers.
These lawyers can order U.S. taxpayers to pay the corporations unlimited sums of money, including for the loss of expected future profits.
The corporations only need to convince the lawyers that a law protecting public health or the environment violates their special NAFTA rights. The corporate lawyers' decisions are not subject to appeal.
This corporate power grab is formally called Investor-State Dispute Settlement (ISDS).
Taxpayers have paid hundreds of millions of dollars under NAFTA to multinational corporations over toxic bans, environmental and public health policies, and more, with tens of billions pending in ongoing cases.
Rollbacks of Food Safety, Health and Environmental Protections
The dirty little secret of NAFTA is that most of its chapters do not have to with trade at all. One chapter limits food and product safety standards along with border inspections. It lets agribusiness firms sell food here that does not meet U.S. safety rules.
Another gives big pharmaceutical firms new protections against competition so they can raise medicine prices. Another limits consumer protections in the service sector.
This limits what governments can do to keep big banks from causing another financial crisis and requires access to all U.S. roads for trucks from Mexico that do not meet U.S. safety or environmental standards.
The Consequences of NAFTA
Instead of the economic gains for people in all three countries promised by NAFTA’s supporters, the deal has resulted massive job loss and lower wages.
There are more than 930,000 specific American jobs certified as lost to NAFTA outsourcing and imports under just one narrow government program that undercounts the damage.
The Labor Department reports that almost half of the manufacturing workers who lost jobs and were rehired in 2016 experienced a wage reduction, with one out of four taking a cut of greater than 20 percent - an annual loss of at least $7,700. Entire communities have been devastated.
More than 2 million Mexicans engaged in farming and related work lost their livelihoods as NAFTA flooded Mexico with subsidized corn and other agricultural products. Tens of thousands of small retail and manufacturing firms were bankrupted as NAFTA opened the door to Walmart and other megaretailers.
Real average annual wages in Mexico are now lower than they were before NAFTA, and those making the least have been hurt the most, with the minimum wage declining 16.7 percent.
Scores of environmental, health and other public interest policies have been challenged in all three countries. Consumer safeguards, including key food safety protections, have been rolled back.
And NAFTA supporters’ warnings about the chaos that would engulf Mexico, and a new wave of migration from Mexico, if NAFTA was not implemented have indeed come to pass, but ironically because of the devastation of many Mexicans’ livelihoods occurring, in part, because NAFTA was implemented.
- Op-Ed: Trump Still Has Nothing But Platitudes For American Workers (January 31, 2018)
- Measuring Stick on NAFTA: Replacing NAFTA With a Deal That Delivers Broad Benefits (January 26, 2018)
- Op-Ed: Could the Corporate Lobby Kill NAFTA? (November 22, 2017)
- Op-Ed: Will Trump Really Give Us a Better NAFTA? (October 12, 2017)
- Press Release: U.S. Senator Bernie Sanders Headlines #ReplaceNAFTA Day-of-Action Event: Millions Nationwide Call for Successful Renegotiation to Eliminate Job Outsourcing Incentives, Add Strong Labor and Environmental Terms (December 13, 2017)
- Press Release: Will NAFTA Renegotiation Produce TPP 2.0 and Intensify Damage? Or Fulfill Trump Promise of a ‘Much Better’ Deal for Working Americans? Maintaining Secretive Process With 500 Official Corporate Advisers Does Not Bode Well (May 18, 2017)
- Fact Sheets:
- NAFTA's Legacy: Expanding Corporate Power to Attack Public Interests Laws (January 22, 2018)
- NAFTA's Legacy: Lost Jobs, Lower Wages, Increased Inequality (February 27, 2018)
- NAFTA's Legacy: Empty Promises for U.S. Farmers (February 27, 2017)
- NAFTA's Legacy: Legacy for Mexico: Economic Displacement, Lower Wages for Most, Increased Immigration (March 14, 2018)
- NAFTA's Legacy: Failed Policy That Drove Millions From Their Homes (February 27, 2017)
- NAFTA’s Corporate Goodies Are Its Biggest Problem (January 30, 2017)
- NAFTA Proponents Use Flawed Methods to Try to Hide Large NAFTA Trade Deficit (December 2017)
- Food Imports to United States Soar During NAFTA-WTO Trade Agreement Era, Threatening American Farmers and Food Safety (June 2017)
- Trade Pact Government Procurement Rules: Offshoring Taxpayer Funds
- Updated Quote Sheet: Selected Government Statements and Actions Against Investor-State Dispute Settlement (August 30, 2017)
- Poll: How Progressives Can & Must Engage on NAFTA Renegotiations (October 20, 2017)
- 230 Law and Economics Professors Urge President Trump to Remove Investor-State Dispute Settlement (ISDS) From NAFTA and Other Pacts (October 25, 2017)
- Letter: Progressives Call on Trump to Fundamentally Rewrite NAFTA (February 2, 2018)
- DeLauro, Levin, Pascrell Led Letter from 183 Members of Congress Urging The Trump Administration to End Outsourcing (January 23, 2018)
- Democratic Freshmen Insist NAFTA's Renegotiation Prioritize Jobs, Wages and the Environment (November 21, 2017)
- U.S. Senator Tammy Baldwin Leads Letter to Trump Administration Calling for Strong Protections for Workers (November 15, 2017)
- House Republicans Send Letter to USTR Lighthizer Calling for ISDS to be removed from NAFTA (October 11, 2017)
- House Democrats Send Letter to USTR Lighthizer with their Priorities for NAFTA Renegotiation (June 12, 2017)
- Sen. Brown Releases Four-Point Plan for NAFTA Renegotiation (May 1, 2017)
- Rep. Peter DeFazio Introduces Resolution Outlining Principles for New Trade Agreement with Mexico and Canada (February 16, 2017)
- Democratic Leader Nancy Pelosi Statement on Trump Administration's NAFTA Notice (May 18, 2017)
- Rep. DeLauro and House Democrats Respond to Trump's Plan to Renegotiate NAFTA (May 18, 2017)
- Rep. Kaptur Statement on Trump Administration's Letter Announcing Intentions for NAFTA Renegotiation (May 18, 2017)
- Ways and Means Committee Ranking Member Neal and Trade Subcommittee Ranking Member Pascrell Respond to NAFTA Renegotiation Notice (May 18, 2017)
- Sen. Wyden Statement on NAFTA Renegotiation Notice (May 18, 2017)
- Sen. Merkley Statement on Notice of NAFTA Renegotiation (May 18, 2017)
- Sen. Bennet Statement on NAFTA Renegotiation (May 18, 2017)
- Sen. Manchin Pleased Trumps Intends to Renegotiate NAFTA (May 18, 2017)
- Sen. Stabenow Statement on Trump's Administration's NAFTA Renegotiation Notice (May 18, 2017)
- Sen. Udall Statement on Notice of NAFTA Renegotiation from Trump Administration (May 18, 2017)
- Rep. Levin: President Trump’s Sound and Fury over NAFTA Signify Nothing in Meaningless Letter to Congress (May 18, 2017)
- Rep. DeFazio: Statement from Rep. Peter DeFazio on Trump Administration’s Notice to Begin NAFTA Renegotiations (May 18, 2017)
- Rep. Dingell Statement on Administration's NAFTA Renegotiation Notice (May 18, 2017)
- Rep. Norcross: NAFTA Must Benefit American Workers (May 18, 2017)
- Rep. Tim Ryan Responds to the Trump Administration Formally Opening NAFTA Renegotiations (May 18, 2017)
- Rep. Cuellar Response to Notification of NAFTA Renegotiation (May 18, 2017)
- Sen. Brown Remains Ready to Work with Administration on NAFTA (May 18, 2017)
- Rep. Adams Writes to Pres. Obama to Voice Conerns with Fast Track for the TPP (January 26, 2015)
- Letter: Over 100 Organizations (Including Doctors Without Borders, Oxfam and AFL-CIO) Send Letter to Health and Trade Ministers Demanding NAFTA Renegotiation Do No Harm to Access to Affordable Medicines (Español Aquí) (January 28, 2018)
- Letter: Faith leaders raise concerns on NAFTA (December 5, 2017)
- U.S., Mexican Bishops Offer Moral Guidelines for NAFTA: Strengthen Labor, Wage and Environmental Standards (November 15, 2017)
- Lori Wallach in The American Prospect: Will Trump Really Give Us a Better NAFTA? (PDF) (October 12, 2017)
- Op-ed: Networks Representing Hundreds of Thousands of Small Businesses Demand No ISDS in NAFTA (September 11, 2017)
- Small Business Leaders to Trump: End Advantage for Multinationals Over U.S. Small Businesses in NAFTA (July 12, 2017)
- U.S. Conference of Catholic Bishops Comment Submission for NAFTA Renegotiation: End ISDS and Strengthen Labor and Environmental Standards (June 12, 2017)
- Leading Environmental Organizations for Replacing NAFTA: Eight Essential Changes to an Environmentally Destructive Deal. (April 2017)
- Citizens Trade Campaign Press Release: Civil Society Speaks Out on NAFTA Renegotiation (May 18, 2017)
- Sierra Club: Trump Fails To Deliver A NAFTA Renegotiation Plan (May 18, 2017)
- USW Urges Prioritzing Workers in Renegotiation of NAFTA (May 18, 2017)
- AFL-CIO: Working Families Demand High Standards for NAFTA Renegotiation (May 18, 2017)
- NFFC: Replace NAFTA - Return Community Control Over Food and Farms (May 18, 2017)
- Institute for Agriculture and Trade Policy Statement on Notice of NAFTA Renegotiation (May 18, 2017)
- CWA: NAFTA Negotiations Must be Transparent and Create Good U.S. Jobs (May 18, 2017)
- IAMAW: NAFTA Should Be Dissolved (May 18, 2017)
- Our Revolution on NAFTA Negotiations: We Must Ensure This Isn’t Another Corporate Welfare Deal (May 18, 2017)
- Teamsters: Revamped Trade Deal Must Dramatically Reform Agreement to Help Those on the Job (May 18, 2017)
- NFU: Reopening NAFTA Provides Trump Administration With Chance to Right the U.S. Trade Agenda (May 18, 2017)
- Principles of A New U.S. Trade Policy for North American Agriculture. (January 2017)
- Press Release: Groups from Mexico, Canada and the U.S. Demand NAFTA Replacement. Disponible en español aquí. (January 18, 2017)
- Press Release: Citizens Trade Campaign Outlines Priority NAFTA Changes in Letter to Trump. Letter available here. (January 13, 2017)
- Corporations Reveal What They Want in New NAFTA: Expanded Protections to Make It Less Risky to Outsource Jobs and More Power to Attack Public Interest Laws (November 21, 2017)
- Memo: Presidential Authority to Terminate NAFTA Without Congressional Approval (November 13, 2017)
- Don’t Believe the Hype: U.S. Agricultural Exports Lag Under NAFTA and Other Past Trade Deals (March 2017)
- Data Fail: The Divergence between Rosy International Trade Commission Projections and U.S. Trade Agreements’ Actual Outcomes (May 12, 2016)
- Don't Be Fooled: NAFTA Proponents Use Flawed Methods to Try to Hide Enormous NAFTA Trade Deficit (May 11, 2017)
- Updated Chart: Table of Foreign Investor-State Cases and Claims under NAFTA and Other U.S. "Trade" Deals (March 2017)
- Learn more about the NAFTA cross-border trucking case
- Updated Factsheet: Job-Killing Trade Deficits Surge under FTAs: U.S. Trade Deficits Grow 418% with FTA Countries, but Decline 6% with Non-FTA Countries (March 9, 2016)
- Studies Reveal Consensus: Trade Flows during "Free Trade" Era Have Exacerbated U.S. Income Inequality (August 20, 2015)
- Prosperity Undermined: The Status Quo Trade Model's 21-Year Record of Massive U.S. Trade Deficits, Job Loss and Wage Suppression (August 20, 2015)
- Case Studies: Investor-State Attacks on Public Interest Policies
- Debunking USTR's Absurd Assertion that the U.S. Has a Trade Surplus with NAFTA Countries (January 13, 2015)
- NAFTA's Legacy for Mexico: Economic Displacement, Lower Wages for Most, Increased Immigration (January 6, 2015)
- Failed Trade Policy and Immigration: Cause and Effect (January 6, 2015)
- Prosperity Undermined During Era of Fast Tracked NAFTA and WTO Model Trade Agreements (December 20, 2014)
- Let them Eat Imports: Food Imports to U.S. Soar under WTO-NAFTA Model, Threatening Family Farmers and Safety (June 10, 2014)
- Report: NAFTA at 20 – One Million U.S. Jobs Lost, Mass Displacement and Instability in Mexico, Record Income Inequality, Scores of Corporate Attacks on Environmental and Health Laws (February 28, 2014)
- NAFTA's Broken Promises 1994 - 2013: Outcomes of the North American Free Trade Agreement (March 15, 2013)
- U.S. Pharmaceutical Corporation Uses NAFTA Foreign Investor Privileges Regime to Attack Canada's Patent Policy, Demand $100 Million for Invalidation of a Patent (March 2013)
- Investors Use Runaway "Fair and Equitable Treatment" Standard in 75% of "Successful" Cases Against Governments (September 5, 2012)
- Debunking USTR Claims in Defense of NAFTA: The Real NAFTA Score 2008 (March 27, 2008)
- Mexico City NAFTA Renegotiation Round: If No Progress on Major U.S. NAFTA Reform Proposals, What is Path Forward? (February 23, 2018)
- Trade Deficit Up 5 Percent in Trump’s First Year, Raising Stakes for Quick NAFTA Replacement Deal that Stops Outsourcing, China Trade Action (February 6, 2018)
- Trade Deficits Up in Trump’s 11 Months in Office; Rather Than Promised Speedy Reduction, 2017 Deficit Will Be Larger Than in 2016 (January 5, 2018)
- U.S. Senator Bernie Sanders Headlines #ReplaceNAFTA Day-of-Action Event: Millions Nationwide Call for Successful Renegotiation to Eliminate Job Outsourcing Incentives, Add Strong Labor and Environmental Terms (December 13, 2017)
- At Hill Forum, Conservative and Progressive Trade and Legal Experts Support Removal of ISDS From NAFTA, Revealing Isolation of Corporate Lobby Defending NAFTA Job Outsourcing Incentives (December 5, 2017)
- New Trade Data Shows Marked Rise in Deficits During Trump’s First 10 Months, Spotlighting Urgency of Successful NAFTA Renegotiation, Action on China Trade (December 5, 2017)
- Next Round of NAFTA Talks May Bring Renegotiation to an Inflection Point if Canada and Mexico Refuse to Engage on U.S. Proposals (November 16, 2017)
- Across the Political Spectrum, Trade and Legal Experts Agree: ISDS Must Be Eliminated From NAFTA, Revealing Unusual Consensus (October 25, 2017)
- Hundreds of Academics Urge Trump to Remove Controversial ISDS From NAFTA (October 25, 2017) (Letter text here.)
- As Battle Over NAFTA Investor Protections Heats Up, Trinational Coalition Delivers 400,000 Petitions Demanding Elimination of Corporate Rights and Tribunals (October 11, 2017)
- NAFTA Plan Does Not Describe Promised Transformation of NAFTA to Prioritize Working People (July 17, 2017)
- As NAFTA Hearings Open, More Than 100,000 Petitions Delivered and 50,000 Public Comments Filed Demanding a New Deal to Benefit Working People, Not Just Corporations (June, 27)
- Will NAFTA Renegotiation Produce TPP 2.0 and Intensify Damage? Or Fulfill Trump Promise of a ‘Much Better’ Deal for Working Americans? Maintaining Secretive Process With 500 Official Corporate Advisers Does Not Bode Well (May 18, 2017)
- Draft NAFTA Renegotiation Plan in Official Fast Track Notice Letter Would Not Fulfill Trump’s Pledge to Make NAFTA ‘Much Better’ for Working People or Enjoy a Congressional Majority (March 30, 2017)
- Groups from Mexico, Canada and the U.S. Demand NAFTA Replacement (January 18, 2017)
- Citizens Trade Campaign Outlines Priority NAFTA Changes in Letter to Trump ( January 13, 2017)
- Trump Missed Deadline for Promised 100-days Start of NAFTA Renegotiation (February 2, 2017)
- President Trump’s Executive Orders Formally Bury TPP’s Corpse, but What About TTIP, TISA, China BIT? (January 23, 2017)
- Press Release: New ITC Report Finds Disturbing Trends in U.S. Economy After Implementation of Free Trade Agreements (June 30, 2016)
- With Trade Commission TPP Review Due Next Week, New Study Shows Past Pacts’ Actual Outcomes Were Opposite of Agency's Rosy Projections (May 12, 2016)
- Corrected Trade Data Confirm Ballooning Trade Deficit Under Korea FTA and More Than Twice the Trade Deficit With NAFTA Partners (February 10, 2015)
- Statement of Lori Wallach: 2014 Trade Data Details Growing Trade Deficits under Korea FTA and NAFTA (February 5, 2015)
- Reporters Memo: Analysis of 2014 Annual Trade Data (February 4, 2015)
- Obama's Legacy: Middle-Class Jobs, Affordable Medicine and Financial Stability, or Fast-Tracked Trade Agreements – But Not Both (January 15, 2015)
- Reporters' Memo: USTR at Thursday Finance Committee Hearing: Data Contradicts Froman's Outlandish Claims — Including that NAFTA Created a Trade Surplus; TPP Deadlock Continues After Recent U.S.-Japan Summit (April 30, 2014)
- Reporters' Memo: Data Debunk for USTR Froman's Thursday Committee Hearing Doubleheader: The Actual Data Versus USTR's Outlandish Claims including that NAFTA Created a Trade Surplus (April 2, 2014)
- Statement of Public Citizen President Robert Weissman: 'Public Interest' Committee Won't Fix Imbalance in Trade Policy Creation (February 18, 2014)
- Obama Mexico Visit Spotlights 20-Year Legacy of Job Loss from NAFTA, the Pact on Which Obama's Trans-Pacific Partnership Is Modeled (February 13, 2014)
- NAFTA at 20: One Million Lost U.S. Jobs, Higher Income Inequality, Doubled Agriculture Trade Deficit with Mexico and Canada, Displacement and Instability in Mexico, and Corporate Attacks on Environmental Laws (December 28, 2013)
- Michael Froman to Be Named New United States Trade Representative: Will Froman Bring With Him the NAFTA-Style Trade Policies of His Past or Will He Implement Obama's Promised Trade Reforms? (May 2, 2013)
- Case Studies: Investor-State Attacks on Public Interest Policies
- Chart: See all corporate investor-state cases launched under NAFTA and other U.S. 'free trade' agreements
- Report: NAFTA at 20 — One Million U.S. Jobs Lost, Mass Displacement and Instability in Mexico, Record Income Inequality, Scores of Corporate Attacks on Environmental and Health Laws
- Annotated NAFTA USTR Notice Draft (March 2017)
- Laura Carlsen at Foreign Policy in Focus: NAFTA: Kicked Up a Notch (May 23, 2007)
- NAFTA Superhighway/SPP: The Truth is Stranger Than Fiction
- The World Bank on NAFTA: Wrong Numbers Lead to Wrong Conclusion
- The Ten Year Track Record of NAFTA