November 27, 2020...5:20 am

1993 North American Free Trade Agreement

With NAFTA support, the Clinton administration and a majority of Congress rejected with disapproval calls for a return to the same protectionist policy, which was demonstrated by the Smoot-Hawley tariff laws, which contributed to the creation of the Great Depression. Many of these protectionist claims came from unions who feared that NAFTA would cost the United States jobs in older industries. Despite these concerns, the work will see that they too are better off as consumers in a growing economy, when nations are free to trade with each other and workers face the challenges of international competition. In 2015, the Congressional Research Service concluded that “NAFTA`s overall net impact on the U.S. economy appears to be relatively small, not least because trade with Canada and Mexico accounts for a small percentage of U.S. GDP. However, there have been adjustment costs for workers and businesses as the three countries have prepared for more open trade and investment between their economies. The report also estimated that nafta has added $80 billion to the U.S. economy since its inception, a 0.5% increase in U.S. GDP. [85] On the other hand, Canada has long sold the United States 99% or more of its total oil exports: it did so before the two countries concluded a free trade agreement in 1988.

In other words, NAFTA does not appear to have done much to open up the U.S. market to Canadian crude oil. It was very open — Canadians were producing more. After U.S. President Donald Trump took office in January 2017, he tried to replace NAFTA with a new agreement and began negotiations with Canada and Mexico. In September 2018, the United States, Mexico and Canada reached an agreement to replace NAFTA with the U.S.-Mexico-Canada Agreement (USMCA), and the three countries had ratified it until March 2020. Nafta remained in effect until the implementation of the USMCA. [13] In April 2020, Canada and Mexico informed the United States that they were ready to implement the agreement. [14] The USMCA came into force on July 1, 2020 and replaced NAFTA. Proponents have sometimes cited oil exports as evidence that NAFTA has helped Canada. According to the Economic Complexity Observatory, the United States imported $37.8 billion worth of crude oil in 1993, of which 18.4% came from Saudi Arabia and 13.2% from Canada.

In 2015, Canada sold the United States for $49.8 billion, or 41% of its total crude oil imports. In real terms, Canadian oil sales to the U.S. increased by 527% during this period and are the largest supplier to the United States since 2006. NAFTA (TLCAN in Spanish) was approved by the Mexican Senate on November 22, 1993 and published in the Federation`s Official Journal on December 8, 1993. [28] President Clinton rightly called the agreement a “first step” and stressed that it would reach other Latin American countries to spread free trade throughout the hemisphere. It will thus move even closer to the conservative vision of a hemispheric free trade area. The agreement exists between Canada, the United States and Mexico. Examine these NAFTA facts to summarize their impact on these three economies since their adoption.

We use three-digit sectoral data based on CIS (U.S. Bureau of the Census 1996, 2003b), deflated with sectoral price indices per chain (BLS 2001) updated using sector-to-production price indices (BLS 2003b). This data is relied on from HS classifications to CIS (1987) using conversion tables on census CDs. CIS data are then integrated into the BLS sectors with BLS branch plans (2003a). The effects on employment at the state level are calculated by assigning imports and exports to states on the basis of their share in three-digit employment at the industrial level for the year 2000 (U.S. Census Bureau 2001).