NAFTA has also used a new era of free trade agreements, which have multiplied as World Trade Organization (WTO) global trade negotiations, and has played a pioneering role in integrating labour and environmental provisions, which have become increasingly broad in subsequent free trade agreements [PDF]. The USMCA has put in place stricter enforcement mechanisms than the original agreement, which has led the AFL-CIO, the largest collection of U.S. unions, to support the pact – a rare endorsement from a group that has strongly criticized NAFTA. Nafta is also controversial. Policymakers disagree on whether the benefits of the free trade agreement outweigh its drawbacks. Here they are, you can decide for yourself. The main provisions of NAFTA required a gradual reduction in tariffs, tariffs and other trade barriers between the three Member States, with some tariffs to be abolished immediately and others over a 15-year period. The agreement guaranteed duty-free access for a wide range of industrial products and goods traded between the signatories. “Domestic goods” have been granted to products imported from other NAFTA countries and prohibit all governments, local or provincial, from imposing taxes or tariffs on these products. Additional ancillary agreements have been adopted to allay concerns about the potential impact of the treaty on the labour market and the environment. Critics feared that U.S. and Canadian companies in Mexico would have generally low wages, which would lead to a shift of production to Mexico and a rapid reduction in manufacturing employment in the United States and Canada. Meanwhile, environmentalists were concerned about the potentially catastrophic effects of rapid industrialization in Mexico, which does not have experience in implementing and enforcing environmental legislation.
Possible environmental problems were raised in the North American Environmental Cooperation Agreement (NAAEC), which established the Commission for Environmental Cooperation (CEC) in 1994. Economists David Autor, David Dorn and Gordon Hanson weigh the impact of trade with China and Mexico on the U.S. labour market in this 2016 paper [PDF] for the National Bureau of Economic Research. Partly because of these drawbacks, the United States, Mexico and Canada began renegotiating NAFTA on September 30, 2018. Negotiations between the three countries ended on 30 November 2018. The new agreement is called The Agreement between the United States, Mexico-Canada. The U.S. Congress ended the agreement on January 16, 2020, and two weeks later, Donald Trumped signed the agreement. Mexico ratified the agreement in 2019. It must be ratified by the legislative branch of each country before it enters into force.