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TRADE LAW
SUBMITTED TO:
SUBMITTED BY:
MS. ALAMDEEP
AMIT GUPTA
UILS
PU
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ACKNOWLEDGEMENT
I would like to thank my International Trade Law professor Ms. Alamdeep for
giving me the opportunity to make this interesting project. Her expert guidance
and motivation has helped me a lot in making this project.
I would also like to thank my family and friends for helping me and supporting
me in making this project. Making this project has been a learning experience
for me and it has helped me in gaining my knowledge about the subject and this
topic.
Amit Gupta
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CONTENTS
Introduction
History
NAFTA
Bibliography
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HISTORY- The impetus for NAFTA actually began with President Ronald
Reagan, who campaigned on a North American common market. In 1984,
Congress passed the Trade and Tariff Act. This is important because it gave the
President "fast-track" authority to negotiate free trade agreements, while only
allowing Congress the ability to approve or disapprove, not change negotiating
points. Canadian Prime Minister Mulroney agreed with Reagan to begin
negotiations for the Canada-U.S. Free Trade Agreement, which was signed in
1988, went into effect in 1989 and is now suspended since it's no longer needed.
Meanwhile, Mexican President Salinas and President Bush began negotiations
for a liberalized trade between the two countries.
Prior to NAFTA, Mexican tariffs on U.S. imports were 250% higher than U.S.
tariffs on Mexican imports. In 1991, Canada requested a trilateral agreement,
which then led to NAFTA. In 1993, concerns about liberalization of labour and
environmental regulations led to the adoption of two addendums.NAFTA was
signed by President George H.W. Bush, Mexican President Salinas, and
Canadian Prime Minister Brian Mulroney in 1992. It was ratified by the
legislatures of the three countries in 1993. It was finally signed into law by
President Bill Clinton on December 8, 1993 and entered force January 1, 1994.
Although it was signed by President Bush, it was a priority of President
Clinton's, and its passage is considered one of his first successes.
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PURPOSE-
purpose:
Grant the signatories Most Favoured Nation status.
Eliminate barriers to trade and facilitate the cross-border movement of
goods and services.
Promote conditions of fair competition.
Increase investment opportunities.
Provide protection and enforcement of intellectual property rights.
Create procedures for the resolution of trade disputes.
Establish a framework for further trilateral, regional and multilateral
cooperation to expand the trade agreement's benefits.
IMPORTANT PROVISIONS:
Market Access for Goods
The elimination of duties on thousands of goods crossing borders within
North America.
Phased-in tariff reductions now complete and special rules for
agricultural, automotive, and textile and apparel products.
Important rights for NAFTA services providers and users across a broad
spectrum of sectors.
Special commitments regarding telecommunications and financial
services.
Formal dispute resolution processes that help resolve differences that
arise in the interpretation or application of NAFTAs rules.
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Side Agreements
The NAFTA partners also negotiated two side agreements: the North
American Agreement on Environmental Cooperation and the North
American Agreement on Labour Cooperation.
DISPUTE SETTLEMENT:
The North American Free Trade Agreement (NAFTA) includes impartial, rulesbased dispute resolution mechanisms to provide the assurance of fairness and
predictability that North American businesses need to engage in commercial
exchanges. Under NAFTA, our businesses can trade and invest with the
knowledge that rules exist to ensure fair treatment and that procedures are in
place to settle disputes impartially, on the rare occasions when they occur.
Today, the vast majority of trade and investment among the NAFTA partners
takes place in accordance with the clear and well-established rules of NAFTA
and the World Trade Organization. While disputes rarely emerge, NAFTA
directs those concerned to try to resolve their differences through NAFTA
committees and working groups or through other consultations. If no mutually
acceptable solution is found, NAFTA also provides for specific formal
mechanisms as follows:
Chapter 19 on Anti-dumping and Countervailing Duties
Chapter 19 offers exporters and domestic producers an effective and
direct route to make their case and appeal the results of trade-remedy
investigations before an independent and objective binational panel. This
process is an alternative to judicial review of such decisions before
domestic courts. This mechanism has been effective in providing for the
efficient and impartial review of trade remedy determinations made by
the investigating authorities of all three NAFTA partners. To date, panels
have sustained some decisions made by domestic investigating
authorities, but have also remanded others for reconsideration.
The NAFTA Secretariat is responsible for the administration of the
Chapter 19 dispute settlement process.
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ADVANTAGES OF NAFTA:
NAFTA created the worlds largest free trade area, which benefits the
450 million people within its borders. It created an economic powerhouse
of $20.08 trillion, as measured by Gross Domestic Product (GDP). That's
because it linked the economies of the United States ($17.3
trillion), Canada ($1.6 trillion) and Mexico ($2.2 trillion). This trade area
is greater than the economic output of the 28 countries in the
entire European Union.
NAFTA eliminates all tariffs between the three countries in January
2008. This reduces inflation by decreasing the costs of imports.
NAFTA creates agreements on international rights for business investors.
This reduces the cost of trade. That spurs investment and growth,
especially for small businesses.
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DISADVANTAGES OF NAFTA:
U.S. Jobs Were Lost- Since labour is cheaper in Mexico, many
manufacturing industries moved part of their production from high-cost
U.S. states. Between 1994 and 2010, the U.S. trade deficits with Mexico
totaled $97.2 billion, displacing 682,900 U.S. jobs.
U.S. Wages Were Suppressed
Mexico's Farmers Were Put out of Business- Mexico lost 1.3 million
farm jobs. The 2002 Farm Bill subsidized U.S. agribusiness by as much
as 40% of net farm income. When NAFTA removed tariffs, corn and
other grains were exported to Mexico below cost. Rural Mexican farmers
could not compete. At the same time, Mexico reduced its subsidies to
farmers from 33.2% of total farm income in 1990 to 13.2% in 2001.
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RESULTS OF NAFTA:
The North American Free Trade Agreement (NAFTA) revolutionized trade and
investment in North America, helping to unlock our regions economic
potential. Since it came into effect 15 years ago, North Americans have enjoyed
an overall extended period of strong economic growth and rising prosperity.
NAFTA has helped to stimulate economic growth and create higher-paying jobs
across North America. It has also paved the way for greater market competition
and enhanced choice and purchasing power for North American consumers,
families, farmers, and businesses.
Furthermore, NAFTA has provided North American businesses with better
access to materials, technologies, investment capital, and talent available across
North America. This has helped make our businesses more competitive, both
within North America and around the world. With rapidly growing economies in
Asia and South America challenging North Americas competitiveness, NAFTA
remains key to sustained growth and prosperity in the region.
Since NAFTA came into effect, merchandise trade among the NAFTA
partners has more than tripled, reaching US$946.1 billion in 2008. Over
that period, Canada-U.S. trade has nearly tripled, while trade between
Mexico and the U.S. has more than quadrupled. [C$ figure = $1.0
trillion]
Today, the NAFTA partners exchange about US$2.6 billion in
merchandise on a daily basis with each other. Thats about US$108
million per hour. [C$ figures = $2.8 billion and $115 million]
Since NAFTA came into effect, the North American economy has more
than doubled in size. The combined gross domestic product (GDP) for
Canada, the United States, and Mexico surpassed US$17 trillion in 2008,
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up from US$7.6 trillion in 1993. [C$ figures = $18.2 trillion and $9.8
trillion]
In 2008, Canada and the United States inward foreign direct investment
stocks from NAFTA partner countries reached US$469.8 billion.
Meanwhile, Mexico has become one of the largest recipients of foreign
direct investment among emerging markets, and received US$156 billion
from its NAFTA partners between 1993 and 2008.
North American employment levels have climbed nearly 23% since 1993,
representing a net gain of 39.7 million jobs.
BIBLIOGRAPHY
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www.naftanow.org
www.useconomy.about.com
www.sice.oas.org
www.mackinac.org
Hufbauer, Gary Clyde, NAFTA An Assessment, oxford
publication,2015.
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