Mexico's Trade Negotiator for the North American Free Trade Agreement NAFTA, pictured on the left, and Tyler Newman on the Right, at the Carlson School of Management at the University of MInnesota

NAFTA Architects gather at University of Minnesota

March 27-For the University of Minnesota’s Heller-Hurweicz Institute, chief negotiators for the North American Free Trade Agreement (NAFTA), a treaty which establishing a free trade zone between the United States, Canada and Mexico.

The speakers defended the bill from recent criticisms leveled by President Donald Trump and the public.

North American Free Trade Agreement (NAFTA) signing featuring, from left to right, President Salinas, President Bush, Prime Minister Mulroney (Seated) Jaime Serra Puche, Carla Hills, Michael Wilson

NAFTA: Backgrounds and Objectives

The objectives of NAFTA found in article 102 of the agreement are to:

  1. eliminate barriers to trade in, and facilitate the cross-border movement of goods and services between the territories of the Parties;
  2. promote conditions of fair competition in the free trade area;
  3. increase substantially investment opportunities in the territories of the Parties;
  4. provide adequate and effective protection and enforcement of intellectual property rights in each Party’s territory;
  5. create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes;
  6. and establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement.

NAFTA Dealmakers

The panel included Carla Hills, former U.S. Trade Representative under George H.W. Bush; Jaime Serra Puche, former Mexican Secretary of Commerce and Industrial Development and John Weekes, a former chief NAFTA negotiator for Canada having served in a number of posts. Each of the three defended NAFTA from recent criticisms, but differed in their assessment of the future of NAFTA and other trade agreements.

Carla Hills

Hill addressed criticisms from the public on the agreement’s outcomes, arguing that after 25 years any trade agreement would need to be updated. To Hill, one could not judge NAFTA “deficient” as suggested by President Trump, instead encouraging further negotiations to consider policies that NAFTA in particular energy policies.

Hill emphasized the United States enjoys from participating in the agreement, citing that 60 percent of our imports are intermediate goods, implying that they fuel production in the U.S. to either be sold domestically or exported abroad.

Pointing to the increasingly digital global economy, Hill cautioned that policymakers must recognize that they are in uncharted waters when making policies, not knowing how those will interact with new ways that business is conducted.

Carla Hills who negotiated the North American Free Trade Agreement (NAFTA) during George Bush Senior's Preisdency

John Weeks

Echoing remarks made in January, former Canadian Trade Rep. John Weekes criticized promises made by President Trump to break up NAFTA into a series of bilateral agreements similar to the Trans-Pacific Partnership, which President Trump disengaged the United States from in January.

Weeks summarized his position on renegotiating NAFTA saying:

“The quality of provisions could be improved, but the structure of trilaterality is what distinguishes it from other agreements”

Jaime Serra Puche

The benefits of the agreement were clear to Jaime Serra Puche, contrasting the $3–10B in trade done by Mexico prior to NAFTA with the $25–30B after.

To Puche, there is no question that NAFTA was effective in it’s time but that skill-biased technological change is to blame. Workers are not trained to deal with increasing automation in the global labor force.

Setting aside technical explanations for NAFTA’s benefits, Puche spoke of NAFTA’s trilateral arrangement, as a stabilizing political force, defending against concentrated trade interests that might harm the welfare of other nations.

Given the perceived political unity produced by NAFTA, Puche warned that if NAFTA renegotiations reached a higher body like the World Trade Organization, the resulting costs would be “huge”.

Consensus among creators

Puche and Hill argued that press coverage portrayed regional agreements as nontransparent, singling out misinterpretations of indicators like trade deficits as drivers of the problem.

According to them, Critics of NAFTA and other trade agreements are misunderstand or misrepresent the finer details of international trade.

After leaked draft of a letter from President Trump to Congress was released at the end of March, the foundations of NAFTA seem safe.

But as other U.S. officials begin calling for even more drastic changes than the President’s initial commitments, the future of U.S. trade remains shaded by uncertainty.

This piece was originally published for an older version of the site, DarkMarketEconomist.com on April 5th 2017 about an event that took place at the University of Minnesota on March 27th of the same year. 

  • Tyler Newman

    Reporter

    A journalist determined to tell the stories tucked away in the shadowy corners of the digital world, specializing in coverage of U.S. politics and international trade. He has produced and written stories for the Growler magazine, the Rift Magazine, Leafly.com and the Minnesota Daily.

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