The North American Free Trade Agreement (NAFTA) has been a topic of discussion for years. Signed into law in 1994, it has been instrumental in shaping the economic policies of Canada, Mexico, and the United States. NAFTA has remained a controversial agreement, with some arguing that it harms industries and workers in all three countries.
While NAFTA has been known for its impact on trade, there are some things it does not do. Here are a few things that NAFTA does not cover:
1. It does not address labor standards.
One criticism against NAFTA is that it does not address labor standards. Although the trade agreement has rules against child and forced labor, it does not include provisions that protect workers` rights in the three countries. As a result, some industries have taken advantage of the cheap labor and weak employment laws in Mexico, leading to a loss of jobs in both Canada and the United States.
2. It does not cover environmental protection.
Another significant criticism of NAFTA is that it does not have any provisions for environmental protection. Critics argue that the agreement encourages businesses to move to countries where environmental regulations are less strict, which can lead to environmental harm. Although NAFTA has a side agreement called the North American Agreement on Environmental Cooperation, its provisions are not binding, and it is not enforceable through the standard dispute resolution process.
3. It does not eliminate all trade barriers.
NAFTA aims to eliminate most trade barriers between the United States, Canada, and Mexico. However, there are still some exceptions. For instance, each country is allowed to keep certain taxes and fees, such as environmental taxes, in place. Additionally, each country is allowed to place some restrictions on imports and exports, such as health and safety rules.
4. It does not create a common currency.
Despite the fact that NAFTA enables free trade between Canada, Mexico, and the United States, it does not create a common currency like the Euro. Each country continues to use its currency, and the exchange rates between them can fluctuate.
In conclusion, while NAFTA has been instrumental in shaping the economic policies of North America, it is not without its flaws. As we have seen, NAFTA does not address labor standards, environmental protection, eliminate all trade barriers, and create a common currency. Despite these shortcomings, NAFTA has remained an important agreement for the three countries, and it continues to shape the region`s economy.