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Is NAFTA Still Relevant?

Posted November 14, 2014

Speaking to business leaders in Mexico City last February, U.S. Commerce Secretary Penny Pritzker called the North American Free Trade Agreement (NAFTA) “outdated” and “in need of an upgrade.” Pritzer said that the global trade environment had changed since the “groundbreaking agreement” was signed 20 years ago and that attitudes toward labour and the environment as well as e-commerce and new technology such as the Internet were shifting the nature of America’s trade relationship with the world. The Commerce Secretary said much the same thing on her trade trip to Ottawa earlier this month.
North America Globe
Deflecting when asked whether there was any push to renegotiate NAFTA, she seemed to suggest that the “upgrade” called for would simply involve the trade pact being superseded by the 12 nation Trans-Pacific Partnership (TPP) that includes both Canada and Mexico.  The “comprehensive and high-standard” TPP that, in addition to eliminating tariffs, also seeks to establish rules on a wide range of issues, including intellectual property rights, foreign direct investment and other economic activities is, in the words of the Obama administration, a “21st century agreement” that addresses new and cross-cutting issues presented by an increasingly globalized economy.

Bearing that in mind, a new report  prepared by a task force sponsored by the influential Council of Foreign Relations calls for strengthening ties among the U.S., Canada, and Mexico.  The report asserts that elevating and prioritizing the relationship between the three countries “offers the best opportunity for strengthening the United States and its place in the world.”

Chaired by David H. Petraeus, retired U.S. Army general and chairman of the KKR Global Institute, and Robert B. Zoellick, former president of the World Bank Group and chairman of Goldman Sachs’s International Advisors, the Task Force is composed of a diverse and distinguished group of experts that includes former government officials, scholars, and others.

The report, North America: Time for a New Focus, recommends closer collaboration among the three nations in the areas of cross-border trade, energy, economic competitiveness, security, and community. It urges development of a regional energy strategy and building new pipelines, bolstering economic competitiveness through the implementation of policies that facilitate the “free and unimpeded movement of goods” across borders, upgrading infrastructure and strengthening security through a unified continental strategy.