Preface

Since the North American Free Trade Agreement (NAFTA) was signed in 1994 by Canada, Mexico, and the United States, countries rich and poor have been scrambling to form their own free trade agreements (FTAs) in their regions of the world. Trade among nations has always been a cornerstone of economic policy, and the principles of free trade specifically have had both supporters and opponents. From corporate boardrooms to coal mines, college campuses to maquiladora factories, the headquarters of environmental activists to the seats of world governments, free trade agreements have been the subject of intense debate and close scrutiny. Why the enormous interest in and concern with FTAs at this time? That is one question we attempt to explore in this book.

The goal of FTAs is to eliminate tariffs and other trade barriers between mutually agreeing countries, opening up markets to foreign industries that had previously been shut out of those markets due to such impediments. From an economic standpoint, according to its advocates, free trade promises wealth and prosperity to all the nations involved, while politically, it fosters democracy and stability. Socially, its supporters argue, it brings a better way of life to people and increases standards of living, especially in developing or underdeveloped countries. It was these promises that persuaded the United States, Canada, and Mexico to sign NAFTA, the world’s first international free trade agreement.

Since NAFTA went into effect on January 1, 1994, it has been considered the model for all succeeding FTAs. As the longest-running FTA to date, NAFTA provides the best evidence of an FTA’s effects on the economies, politics, and societies of the countries involved. Opponents of FTAs, however, argue that NAFTA is a prime example of how FTAs do not achieve the goals their supporters promote. They cite the loss of American jobs to Mexico as one of the most distressing results of NAFTA, in addition to environmental degradation and the financial downfall of local industries in favor of corporate giants. If NAFTA is a blueprint for future FTAs, many feel the architects should go back to the drawing board. This book examines the debate surrounding free trade and FTAs with a special emphasis on NAFTA, as both supporters and detractors use specific examples from NAFTA’s 10-year tenure to make their cases for and against future FTAs.

Chapter 1 provides a brief overview of topics that are discussed in greater depth throughout the rest of the book. A definition of free trade is provided, along with an examination of NAFTA and the effects it has had on the three signatory countries. The desire of the European Union and the developing world to enter into FTAs is analyzed, as is the idea of free trade versus fair trade.

As other countries consider entering into FTAs, they look to NAFTA as a prototype. Chapter 2 therefore takes a closer look at NAFTA’s effects on industry, jobs, and the economies of the United States, Canada, and Mexico. Because Canada and the United States have similar free-market economies, and because so many trade agreements already existed between them prior to their entering into NAFTA, Canada is covered here less extensively than Mexico, which has been the most profoundly affected by NAFTA, both negatively and positively.

Although many in the United States have become disillusioned with NAFTA, primarily due to the relocation of some American businesses to Mexico (often to the detriment of local economies in the States) and what has been perceived as an imbalance of trade that has hurt Mexican farmers particularly, governments worldwide have continued to pursue FTAs. Chapters 3 and 4 examine other FTAs currently in the works, some of them fairly controversial. Chapter 3 focuses on FTAs in Latin America, while Chapter 4 takes a more global view and considers FTAs in areas such as Southeast Asia, the Middle East, and Australia.

Whereas the previous chapters discuss the economics and politics involved in free trade agreements, Chapter 5 delves into the social impact FTAs have on signatory nations. The effect of NAFTA on intellectual property laws, the environment, human rights, and women’s rights is examined here and provides a glimpse into what the future may hold for other countries should new FTAs mirror NAFTA. The concluding chapter provides some scenarios for the future of NAFTA, as well as FTAs in regions like Latin America and other parts of the developing world.

My appreciation goes out to all the newspapers, journals, and other publications that granted us permission to reprint their articles in this volume. I would also like to thank Paul McCaffrey for his assistance in producing this book, as well as Michael Schulze, Norris Smith, Richard Stein, and Gray Young, who have supported and encouraged me in my work at Wilson. A special thanks goes out to Lynn Messina and Sandra Watson for their hard work, dedication, patience, and friendship in this endeavor and on other Wilson projects.

Jennifer Peloso

April 2005