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NAFTA: “Old enough to be tried as an adult”

10 January 2010

Writing about a proposed U.S. “Trans-Pacific Trade Agreement”, Guardian (U.K.) columnists Kevin Gallagher and Timothy Wise see the agreement as basically good, having learned (one supposes) from NAFTA. Which doesn’t do much for those stuck with that 16-year old botched experiment:

This month is the 16th anniversary of Nafta coming into force, so the agreement is now old enough to be tried as an adult. In the US, the agreement is blamed for job losses, for adding downward pressure on wages, particularly in manufacturing, and for contributing to a large US trade deficit. In Canada, critics point to job losses, the declining competitiveness of the manufacturing sector, and the constraints Nafta has put on Canada to deploy adequate policies for public welfare.

As we detail with Mexican economist Eduardo Zepeda in a new report, Rethinking Trade Policy for Development: Lessons from Mexico Under Nafta, the agreement has shown slow growth, weak domestic investment, anaemic job creation, and increased economic vulnerability – decimating many existing sources of livelihood, particularly in agriculture. Mexico’s economic performance is now among the worst in the hemisphere. In all three countries, legal scholars and government officials decry the capability granted for foreign investors to sue governments if legislation negatively affects their profits or expected profits.

NAFTA will probably get off with a warning, as a delinquent… but it needs to be put under adult supervision and strictly monitored.

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