Please refer to our new main site.

Wednesday, August 1, 2012

NAFTA and CARICOM part 1 - Law - International Law

On December 17, 1992, Canada, Mexico, and the USA signed an agreement known as NAFTA.

NAFTA stands for North American free trade Agreement. The representatives from each nation

included George H.W. Bush (USA), Carlos Salinas (Mexico), and Brian Mulroney (Canada). Since

NAFTA had to be approved by each nation's parliamentary or legislative branch it didn't become law

until U.S. President Bill Clinton was in office (the law was approved on December 8, 1993).

An explanation of NAFTA includes: The North American Free Trade Agreement (NAFTA) is a

comprehensive agreement that sets the rules for international trade and investment between Canada, the

United States, and Mexico. The Agreement is a complex and lengthy document that includes eight

sections, 22 chapters, and some 2,000 pages ( Some topics discussed in the NAFTA are:

Market Access for Goods, Protection for Foreign Investment, Protection for Intellectual Property,

Easier Access for Business Travelers, and Access to Government Procurement (

One effects of NAFTA is the North American Agreement on Environmental Cooperation

(NAAEC) which is an agreement between these countries to protect the environment while effectively

trading. Another is the North American Agreement on Labour Cooperation (NAALC) which was

created to increase the labor standards in all countries involved and promote innovation and


NAFTA has a huge effect on the governments involved: From a U.S. export market

perspective, NAFTA has indeed delivered the goods. Specifically, U.S. goods exported to Canada and

Mexico have more than doubled between 1993 and 2007 - from $141.9 billion to nearly $385 billion.

NAFTA accounts for fully a third (33%) of the U.S. trade total (Selko 38). It greatly effects each

countries economy and each government is intertwined. Presidential candidates must state their views

on NAFTA to win votes and become elected: Democrat contenders Hillary Clinton and Barack Obama

have both pledged if elected president they would threaten to pull out of the trade agreement to force

Mexico and Canada to renegotiate the accord, and add new labour and environmental protections

(Drajem A13). This has proved to be a major deciding factor for some: NAFTA has become a

centerpiece of the Democratic primary in Ohio, which has lost almost 250,000 factory jobs since the

accord took effect in 1994. Fifty-nine per cent of Democratic voters in the state disapprove of the

agreement, compared with 13% who support it, according to a poll conducted Feb. 27-29 for the

Cleveland Plain Dealer (Drajem A13).

There are alternatives to NAFTA. Firstly, all agreements could be re-negotiated and reorganized

into a new trade bloc. Another is quitting NAFTA membership and accepting tariffs. This could lead to

more people Buying American which might benefit our economy. We have the option of going back

to life before NAFTA which would include regressing to the Free Trade Agreement (FTA). Also, we

could embrace the proposal of the Free Trade Area of the Americas (FTAA). This idea was highly

opposed by several South American countries (and it would need their consent to come into effect).One conflict between NAFTA and another trade bloc is: Chiles free trade agreement

with MERCOSUR complicates its ability to negotiate NAFTA accession. Pursuant to Article 52 of the

Chile-MERCOSUR Agreement, any signatory state that offers a lower tariff concession to a third party

must extend it to the other signatory states. This is the classic "most favored nation" status rule. If not,

the party offering the concession to third parties must negotiate some form of equivalent compensation

with all the other signatory states to the Chile-MERCOSUR Agreement. While this situation does not

make Chilean accession to the NAFTA impossible, it reduces the practical viability of this option

because Chile must now answer to MERCOSUR for anything it may concede to the NAFTA (O'Keefe

pp. 305-318).

On March 18, 2004, the following complaint was made by the US to the World Trade

Organization: The United States claims that, although China provides for a 17 percent VAT on ICs,

enterprises in China are entitled to a partial refund of the VAT on ICs that they have produced, resulting

in a lower VAT rate on their products. In the US view, China thus appears to be subjecting imported ICs

to higher taxes than applied to domestically produced ICs and to be according less favourable treatment

to imported ICs ( And the following resolution was made on July14, 2004; China agreed to

amend or revoke the measures at issue to eliminate the availability of VAT refunds on ICs produced and

sold in China and on ICs designed in China but manufactured abroad by 1 November 2004 and 1

September 2004 respectively (

NAFTA affects me as a US citizen. It helps US companies grow quicker and gain the financial

support (and business) in the form of overseas investing. If I was to start a company, I could easily ship

goods overseas and/or get investors for my company. This would help my business grow. Our

free-market mentality encompasses the globe. Some say NAFTA helps large companies grow but

promotes the exporting of US jobs. If this is true, I, or someone I know, might have a harder time

finding or keeping a job: Between 1993 and 2002, NAFTA resulted in an increase in exports that

created 794,194 jobs, but it displaced production that would have supported 1,673,454 jobs (see

figure). Thus, the combined effect of changes in imports and exports as a result of NAFTA was a loss

of 879,280 U.S. jobs. These NAFTA-related job losses suggest that U.S. workers have good reason to

be concerned that the proposed Free Trade Agreement of the Americas will threaten jobs and

communities (Scott).

NAFTA helps to make my purchases cheaper. If a certain material or part used to make an

American car was taxed coming in, it would most likely cost more when I bought the finished car. I

also assume that gas prices would soar should NAFTA demise. On the other hand, this might cause us

to rely less on other countries for energy and we could have avoided spending the money we did on

funding war. In conclusion, NAFTA greatly affects the economy I live in. On a side-note, our free-

market mentality and way of life seems to segregate the wealth of our nation and make us unbalanced.

We may one day need to (or be forced to) abandon it if the wealthy do not act responsibly.

The Caribbean Community (CARICOM) was established on July 4th, 1973. It was created to

further promote effective interactions between members, which include: Antigua and Barbuda,

Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Kitts and

Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago. There are also

five additional members without full membership (associate membership): Anguilla, Bermuda, British

Virgin Islands, Cayman Islands, and Turks and Caicos Islands. From 1989 to 2000, members from all

states agreed on nine protocols to change the common market into a single market and economy

(CSME). This revision was called the Revised Treaty of Chaguaramas. Under CARICOM there are

numerous groups dedicated to different areas of interest. Some include: Caribbean Community Climate

Change Center (CCCCC), Caribbean Court of Justice (CCJ), Caribbean Disaster Emergency Response

Agency (CDERA), Caribbean Food Corporation (CFC), Caribbean Telecommunications Union (CTU),

and the Council of Legal Education (CLE).

...continued on part 2


North American Free Trade Agreement. 1998. 3 March 2009..

Selko, Adrienne. NAFTA: LEARNING TO LOVE THY NEIGHBOR. IndustryWeek. 1 Feb 2009: Pg. 38.

Drajem, Mark. White House defends NAFTA from Democrats; Clinton, Obama pledge to pull out of trade agreement. National Post (Canada). 5 March 2008: A13

OKeefe, Thomas Andrew. Potential Conflict Areas In Any Future Negotiations Between Mercosur And The NAFTA To Create A Free Trade Area Of The Americas. Arizona Journal of International and Comparative Law. 1997: pp.305-318.

DISPUTE SETTLEMENT: DISPUTE DS309- China: Value-Added Tax on Integrated Circuits. 2004. 4 March 2009 .

Scott, Robert E. NAFTA-related job losses have piled up since 1993. 10 Dec. 2003. Economic Policy Institute. 4 March 2009 .

CARICOM rallying to help hurricane victims. 18 Sep 2008. Caribbean Community Secretariat (CARICOM). 4 March 2009 .

The CARICOM Single Market and Economy (CSME). 2009. Caribbean Community (CARICOM) Secretariat. 4 March 2009 .

Caribbean Renewable Energy Programme (CREDP). 2009. Caribbean Community (CARICOM) Secretariat. 4 March 2009 .

DISPUTE SETTLEMENT: DISPUTE DS285- United States: Measures Affecting the Cross-Border Supply of Gambling and Betting Services. 2008. 3 March 2009 .

US state governor aims to set up trade missions to Caribbean. 3 Nov. 2007. BBC Monitoring Latin America Political Supplied by BBC Worldwide Monitoring. Lexis-Nexis. 3 March 2009.

CARICOM urges new US president to end Cuba embargo. 10 Dec. 2008. BBC Monitoring Latin America Political Supplied by BBC Worldwide Monitoring. Lexis-Nexis. 3 March 2009.

DISPUTE SETTLEMENT: DISPUTE DS185- Trinidad and Tobago: Anti-Dumping Measures on Pasta from Costa Rica. 2009. 3 March 2009 .

Visit to find, discuss, and submit articles on holistic health;)

No comments:

Post a Comment