What is NAFTA Essay Example
NAFTA is the world's largest free trade agreement between the US, Mexico, and Canada. It was signed in 1992 by President Bush, Mexican President Carlos Salinas, and Prime Minister Brian Mulroney and went into effect in 1994. Between these three countries, they trade more than $1 trillion a year and increased the combined Gross Domestic Product to $21 trillion.2 This deal eliminated barriers and tariffs between countries and made it much easier to trade between one another. American businesses became wealthier, imports became cheaper, agricultural exports grew, and the mutual relationship between the countries transcended. This deal was intended to be a gateway for the three nations to further their global prosperity by integrating their economies. The continuity of this deal should be of utmost importance to our Leader, instead, he's trying to bully Canada into accepting terms that they visibly are not in favor of.
Trump has signed an executive order to renegotiate the NAFTA agreement after threatening to pull out of it entirely last year and calling it, "the worst trade deal in history". On August 27, 2018, the governments of the United States and Mexico renegotiated multiple parts of the deal. However, Canada is still not on the board due to the frayed relations with the United States over tariffs and industrial hurdles. Trump has said, "we are not negotiating with Canada right now" in an interview but I believe he will come around when he realizes his reasoning is irrational.
In my opinion, our president is focused on the wrong things and he must realize that Canada is our strongest, closest ally even if he doesn't want to admit it. Considering this, it's best if Trump doesn't try to leave Canada out of the deal because we need them just as much as they need us. Consequently, Mexico has refused to go any further without all three countries on board, which suggests that it is in their best interest that this pact is multilateral. Mexico and the US reached a preliminary deal recently and now, the fate of this agreement is in the hands of the Canadian government.
This new NAFTA deal has the power to transcend the economic stronghold these three countries have around the world and it has the power to backfire and devastate various industries in multiple countries. For example, if NAFTA is ended, the inflation rate will increase, the price of imports will sky-rocket, and the livelihood of American farmers will be in jeopardy.4 Powerful farmers in Canada are resisting because they don't want to lose their stake in the dairy industry, which is the main issue that is keeping this deal from being finalized.2 With this revised deal, labor standards will be improved, the auto industry will flourish, and the overall mutual partnership between these countries will be healthier.
So where does this leave us with the strained relationship with Canada? Both governments are scheduled to resume talks and negotiations even though President Trump has said that he's not going to compromise and it's up to them to agree to the terms. As stated by the U.S. government, Trump cannot abandon Canada and jump to a bilateral deal with Mexico because it violates the U.S. fast-track law. As of right now, Canada is ready to talk about U.S. access in their dairy industry and the US is ready to strike a deal if one seems fit. Mexico is patiently waiting for this ordeal to be over, so the newly revised NAFTA deal can be finalized before the October first deadline, and before the current president of Mexico is out of office on December first. Accordingly, it is uncertain how tensions have gotten this precarious between our two countries, but I doubt that it will be like this for much longer because peace is crucial, and we can achieve this through thorough talks and negotiations based on good faith. Until then, NAFTA remains our most important trade agreement and Canada is and will always be our most important ally.
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