U.S. Official Says North American Trade Pact Aids All Signatories

"The NAFTA partners are investing more in each others' economies, and the rest of the world is also investing more in our economies," Melle said. Even though the NAFTA contribution to each nation's broader economic performance cannot be measured precisely, Melle told legislators that Mexico's gross domestic product (GDP) has grown 40 percent since 1993 and Canada's real GDP expanded nearly 50 percent during this period. In addition to these economic successes, Melle said that NAFTA remains a vibrant agreement in part because it has responded to changes in production methods and sourcing methods. Melle explained that since 1994, the NAFTA partners have accelerated elimination of tariffs four times, with a total value of trilateral trade covered by these rounds of tariff cuts of approximately $28 billion. The USTR official said the NAFTA partners also have implemented three sets of changes to the NAFTA rules of origin, with a total value of trade covered by these changes of more than $39 billion. Apart from these changes, he said, the United States, Mexico and Canada have resolved a number of thorny trade disputes in 2006. Recent successes in this area include the conclusion of a bilateral agreement on tequila between the United States and Mexico, a separate agreement between the two nations on cement and sweeteners, and final agreement between the United States and Canada to resolve a softwood lumber dispute that had dogged trade relations for almost 20 years. (See related article.) Looking ahead, Melle said there still are NAFTA commitments that must be implemented. Although all tariff cuts between the United States and Canada have been implemented, the remaining tariff reductions between the United States and Mexico will be made January 1, 2008. Although less than 1 percent of U.S. NAFTA trade with Mexico will be affected, the final removal of these tariffs has raised concerns. Nonetheless, Melle said that NAFTA trade ministers reaffirmed in March their commitment to the full implementation of NAFTA. Other challenges the NAFTA partners must confront include the changes in global trade since NAFTA entered into force. Melle said that all the NAFTA partners have concluded other trade agreements since 1994 and face increased competition in each other’s markets as well as with the economies of such countries as China and India. The NAFTA partners must consider how to address increased security concerns without creating trade barriers, Melle said. This is the fundamental challenge of the Security and Prosperity Partnership of North America, the USTR official said. "With the NAFTA firmly in place, the United States and its NAFTA partners have not only become better customers for each other but better neighbors, more committed partners, and effective colleagues in a wide range of trade-related international organizations," he said. For additional information, see Security and Prosperity Partnership of North America. (Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov) http://tinyurl.com/kqvdd [Proofreader's note: this article was edited for spelling and typos on September 13, 2006]

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