Which Is A True Statement About The North American Free Trade Agreement (Nafta)
December 21st, 2020
December 21st, 2020
Shortly after his election, U.S. President Donald Trump said he would begin renegotiating NAFTA terms to resolve trade issues for which he campaigned. The heads of state and government of Canada and Mexico have expressed their willingness to cooperate with the Trump administration.  Although he vaguely formulated the precise terms he wants in a renegotiated NAFTA, Trump has threatened to withdraw from it if negotiations fail.  Analysts agree that NAFTA has opened up new opportunities for small and medium-sized enterprises. Each year, Mexican consumers spend more on U.S. products than their counterparts in Japan and Europe, which means the stakes are high for entrepreneurs. (Most NAFTA studies focus on the impact of U.S. affairs with Mexico. Trade with Canada has also been improved, but the passage of the trade agreement has not had such a significant impact on the already liberal trade practices that America and its northern neighbour have complied with.) On September 30, 2018, the deadline for negotiations between Canada and the United States, an interim agreement was reached between the two countries, thus retaining the trilateral pact when the Trump administration submits the agreement to Congress.  The new name of the agreement was the United States-Mexico-Canada Agreement (USMCA) and came into force on July 1, 2020.   A “subsidiary agreement” reached in August 1993 on the application of existing domestic labour law, the North American Convention on Labour Cooperation (NAALC), was severely restricted.
With regard to health and safety standards and child labour law, it excluded collective bargaining issues, and its “control teeth” were only accessible at the end of a “long and painful” dispute.  The obligations to enforce existing labour law have also raised questions of democratic practice.  The Canadian anti-NAFTA coalition Pro-Canada Network suggested that guarantees of minimum standards in the absence of “extensive democratic reforms in the [Mexican] courts, unions and government” would be of no use.  However, subsequent evaluations indicated that NAALC`s principles and complaint mechanisms “created a new space for princes to form coalitions and take concrete steps to articulate the challenges of the status quo and promote the interests of workers.”  Some small businesses have been directly affected by NAFTA. In the past, large firms have always had an advantage over small businesses, as large firms could afford to build and maintain offices and/or production sites in Mexico, which avoided many of the old trade restrictions on exports. In addition, pre-NAFTA legislation provided that U.S. service providers who wanted to do business in Mexico had to establish a physical presence there, which was simply too expensive for small businesses. Small businesses were stuck, they could not afford to build, and they could not afford export tariffs either. NAFTA eliminated the competitive conditions by giving small businesses the opportunity to export to Mexico at the same costs as larger firms and removing the requirement that a company establish a physical presence in Mexico to do business there.