Is NAFTA a Dinosaur How to Improve NAFTA

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Is NAFTA a Dinosaur?How to Improve NAFTA

• Professor Steve Jenner CSUDH
• UABC September 27, 2006

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Why a Dinosaur?

• NAFTA is no longer a state-of-the-art trade
  agreement since there have been significant
  improvements in the way the U.S. Trade
  Representative (USTR) negotiates trade deals.
• John M. Melle, Deputy Assistant, USTR for North
  America

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NAFTA Successes

• NAFTA was primarily intended to increase trade
  and investment between the U.S., Canada and
  Mexico, and it was very successful.

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Trade Capacity Building

• 1) Education and Training
• MEXUS SDSU UABC
• Border Fulbright
• TIES USAID Exchange
• 2) Infrastructure
• Transportation
• Border crossings

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EU Lessons

• Education example Ireland
• Telecom networks
• Transportation
• Micro-finance for self-employment
• Backward linkages
• Clusters

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EU Challenge

• Regional differences within countries
• Example Spain
• Rich areas Madrid, Catalonia, Navarra
• Poor areas Andalusia, Galicia, Extremadura

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Evolution of the Dinosaur

• Newer FTAs
• Dominican Republic-Central America FTA
  (D.R.-CAFTA)
• U.S.-Peru FTA
• U.S.-Colombia FTA
• All 3 differ from NAFTA in important ways

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The new FTA template

• narrower in scope, reflecting the narrow mission
  of the USTR
• longer tariff phase out periods (up to
• 19 years)

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Labor Environment

• Monitor the enforcement of member countries own
  labor laws and environmental regulations which
  are covered by the same dispute resolution
  mechanisms.
• NAFTA was different in that labor and
  environmental provisions were included in
  separate side agreements, and their enforcement
  has been weak.

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Rules of Origin in NAFTA

• Rules of Origin in NAFTA were too complicated and
  costly with too much of a record-keeping burden
  and too many accommodations to the preferences of
  particular industries in the U.S.

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Trade Capacity Building

• it takes more than the elimination of tariffs to
  generate economic growth in developing countries
  (Ralph Watkins, USTR).
• U.S. now directs investments in trade partners
  customs agencies for technology and training.

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References

• De la Calle Pardo L.F. (2003) Ten years after
  NAFTA greater integration? El Universal, Mexico
  City September 30 and October 14.
• Fiess, N. and Fugazza, M. (2002) European
  integration a review of the literature and
  lessons for NAFTA. World Bank, September 2.

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More References

• Hufbauer, G.C. and Schott, J. (2005) NAFTA
  revisited achievements and challenges. Institute
  for International Economics, Washington, D.C.
• World Bank (2003) Lessons from NAFTA for Latin
  America and the Caribbean Countries A Summary of
  Research Findings December 17.

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TCB websites

• OECD (2006) website Trade-Related Technical
  Assistance and Capacity Building
• http//www.oecd.org/dataoecd/12/10/36748723.pdf
• U.S. AID Bureau for Policy and Program
  Coordination (2004) An evaluation of TCB, Working
  Papers 13-15.
• http//www.usaid.gov/policy/budget/cbj2006/cent_pr
  ogs/central_ppc.html