The North American Free Trade Agreement (NAFTA) went into effect on January 1, 1994, amid fears of job loss in the United States and cries of revolution in the south of Mexico. Yet, in a single decade, the three nations of North America have built a market larger than, and almost as integrated as, the 15-nation European Union. Trade and investment have nearly tripled, and the United States, Mexico, and Canada have experienced an unprecedented degree of social and economic integration. For the first time, "North America" is more than just a geographical expression.
In 2000, the election victories of George W. Bush, Vicente Fox, and Jean Chretien raised hopes still further that the promise of a trilateral partnership might be fulfilled. Four years later, however, relations among the three governments have deteriorated. No leader refers to "North America" in the way that Europeans speak of their continent. Indeed, anti-NAFTA name-calling has surfaced again in debates among U.S. presidential candidates. After ten years, it is time to evaluate what NAFTA has accomplished and where it has failed and to determine where it should go from here. What should be the goals for "North America's" second decade, and what must North American leaders do to achieve them?
NAFTA was merely the first draft of an economic constitution for North America. It was a deliberately lean document, intended only to dismantle barriers to trade and investment. Its architects planned neither for its success nor for the crises that would confront it. Although NAFTA fueled the train of continental integration, it did not provide conductors to guide it. As a result, two setbacks -- the Mexican peso crisis of 1995 and the terrorist attacks of September 11, 2001 -- have threatened to derail the integration experiment.
The peso crisis was a blow to the Mexican economy and to U.S. and Canadian faith in integration. NAFTA's authors had assumed that eliminating restrictions on the movement of capital and goods would, by dint of the market's magic, lead to unalloyed prosperity. No clause in the agreement established a mechanism to anticipate or respond to market failures. Whereas the EU had created too many intrusive institutions, North America made the opposite mistake: it created almost none.
The second shock to the North American body politic occurred on September 11, 2001. If a true partnership had existed, the leaders of the United States, Mexico, and Canada would have met in Washington in the days after the tragedy to declare that the attack was aimed at all of North America and that they would respond as one. Instead, in the absence of common institutions, the governments reverted to old habits. Acting unilaterally, Washington virtually closed its borders; Mexican and Canadian leaders responded ambivalently, afraid of how the angry superpower would react.
Both events signify missed opportunities. The establishment of the U.S. Department of Homeland Security places North America once again at a crossroads. One course -- the more likely one -- would strengthen border enforcement and impede movement, even by friends. Trade and investment would decline, tensions would rise, and the myriad benefits of integration would begin to recede. In an alternative course, however, security fears would serve as a catalyst for deeper integration. That would require new structures to assure mutual security, promote trade, and bring Mexico closer to the First World economies of its neighbors. Progress can occur only with true leadership, new cooperative institutions, and a redefinition of security that puts the United States, Mexico, and Canada inside a continental perimeter, working together as partners.
etc etc (page 4 on "North American Plans" has some good stuff in it)
[Proofreader's note: this article was edited for spelling and typos on April 2, 2005]
Stumble It!
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Dave Ruston
"Although both Mexico and Canada attracted considerable new U.S. investment (since NAFTA gave them privileged access to the U.S. market), the percentage of U.S.-owned companies in each country did not increase."
In The Vanishing Country, Mel Hurtig claims the exact opposite. Whch is true?
"And because Washington is not in a multilateral mood these days, Mexico has been the lone advocate of trilateral cooperation. Successful integration, however, requires a new mode of governance in North America, based on rules and reciprocity."
So Washington is *not* pushing this? Is this more a Canadian/Mexican initiative?
"Dual bilateralism, driven by U.S. power, continues to govern and to irritate. Adding a third party to bilateral disputes vastly increases the chance that rules, not power, will resolve problems."
If accurate, this actually sounds like a postive argument, does it not?
"The U.S. Congress should also merge the U.S.-Mexican and U.S.-Canadian interparliamentary groups into a single "North American Parliamentary Group." This might encourage legislators to stop tossing invective across their borders and instead start bargaining to solve shared problems."
Pipe dream?
The article suggests that it is the U.S. lagging behind Mexico and Canada in the efforts to truly liberalize north american relationships and open up their foreign policies to a rules-based system. Those opposed to "deep integration", are you against the outcomes stated in the proposal, or are you merely cynical regarding the prospect of actually achieving them?
Why is foreign affairs only interested in the economics of things? There is no consideration given to the people of these three countries. Only more and more can possibly be good for North America - screw the planet.
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"And those who were seen dancing were thought to be insane by those who could not hear the music." Frederick Neitsche
Would you agree with me that more and more the concepts of left and right are being defined in terms of those who support this extreme form of capitalism and those who oppose it? The left sees this form of capitalism as opposed to democracy and the common good of humanity while the right see this as the ideal in which power is seized through a combination economic and military strength?
I see the power of the people becoming the New World Order however. I can feel the blood pressure rising. The people that desire democracy are starting to see that in order to have the world we want we have to do something about it rather than wish it into existence. We are gaining in numbers.
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"And those who were seen dancing were thought to be insane by those who could not hear the music." Frederick Neitsche