Chapter 29: The North American Free Trade Area (NAFTA)
Page 269 29 The North American Free Trade Area (NAFTA) Following fast track action by the President and Congress of the United States and parallel actions by Canada and Mexico, the North American Free Trade Area of the three sovereign economies became operational on January 1, 1994. Indeed, it broadened the Free Trade Area Agreement of Canada and the United States, signed in 1988, effective from January 1, 1989. The only other Free Trade Area Agreement the United States had signed was with Israel in 1985. The U.S.Isreal Agreement is beyond the framework of regionspecific economic regionalization. Our review points out that AFTA has reported significant progress in intraASEAN trade liberalization by 1994, and is forging ahead with a wellspecified agenda for progressive trade liberalization five years sooner than the 15year target; and that ANZCER has very much accomplished its goal of AustraliaNew Zealand trade liberalization by July 1, 1990, five years ahead of the target date. The EU, of course, is indeed a program beyond the typical FTA and has accomplished liberalization of trade in final products—goods as well as services—and also in an intraregional free flow of factors of production—capital and labor. NAFTA is at its initial stage, and it begins with a much lower threshold of intraNAFTA trade barriers. However, NAFTA will have to accomplish a great deal more before intraNorth American trade liberalization achieves a comparable performance. With a population base of 360 million,...
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