Examining the Renegotiation of the North American Free Trade Agreement
**UPDATE: The successor to NAFTA — the United States-Mexico-Canada Agreement (USMCA) — was adopted on 30 September 2018**
NAFTA renegotiations are underway.
President Trump has called NAFTA both a disaster and the worst deal ever. Through speeches and Tweets, he promises to rip-up NAFTA, restructure it with other trade deals to impose taxes on all U.S. imports and tax breaks on U.S. exports, and isolate Mexico by imposing 20 per cent tariffs on all imports while tweaking those NAFTA rules affecting Canada–U.S. trade.
The prospect of widely varying rules, rights and obligations as to how the United States will treat Mexico or Canada jeopardizes the notion of NAFTA. The promised wall between the United States and Mexico ends a century of policies of both Republican and Democratic U.S. presidents based on the free flow of goods, services, ideals as well as shared environmental and conservation objectives. While a physical wall will disrupt the migratory patterns of many land-based species, tariff walls on goods and emerging walls on cross-border services threaten to unravel not only NAFTA, but a century of cooperation.
As part of its work on international trade, IISD invited a number of experts from Mexico, Canada and the United States to share their perspectives on NAFTA. These comments are posted below and will be updated on an ongoing basis.
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As NAFTA renegotiations continue, it is useful to examine what might happen if NAFTA tariff preferences disappear. This paper uses an economic trade model to simulate the impacts of a 20 per cent tariff increase in North American industries such as energy, steel, cement and automobiles.
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