{"id":3569,"date":"2026-08-11T22:12:02","date_gmt":"2026-08-11T16:42:02","guid":{"rendered":"https:\/\/forumias.com\/psir\/notes\/nafta\/"},"modified":"2026-08-11T23:02:05","modified_gmt":"2026-08-11T17:32:05","slug":"nafta","status":"publish","type":"psir_note","link":"https:\/\/forumias.com\/psir\/notes\/nafta\/","title":{"rendered":"NAFTA"},"content":{"rendered":"<div class=\"n-wrap\">\n<div class=\"n-shell\">\n<div class=\"n-crumb\"><a href=\"\/psir\/psir-notes\/\">PSIR Notes<\/a><span class=\"sep\">\u203a<\/span><a href=\"\/psir\/psir-notes\/#ii-a\">II-A Comparative Political Analysis and International Politics<\/a><span class=\"sep\">\u203a<\/span><span>NAFTA<\/span><\/div>\n<header class=\"n-head\">\n<div class=\"n-eyebrow\">Paper I \u00b7 Comparative Political Analysis and International Politics<\/div>\n<h1 class=\"n-title\">NAFTA<\/h1>\n<div class=\"n-syl\"><b>Syllabus \u00b7 Paper II-A \u00b7 10<\/b> \u2014 Regionalisation of World Politics : EU, ASEAN, APEC, AARC, <span class=\"cur\">NAFTA<\/span>.<\/div>\n<\/header>\n<div class=\"n-grid\">\n  <main class=\"n-body\"><\/p>\n<h3 id=\"nafta-usmca\">NAFTA &amp; USMCA<\/h3>\n<p>The <span class=\"n-term\">North American Free Trade Agreement<\/span> (US, Canada, Mexico) came into force in <span class=\"n-term\">1994<\/span> \u2014 the first time two developed countries negotiated a trade pact with an emerging-market nation; combined GDP over US$20 trillion by 2018. Trade rose from about $290 billion (1993) to over $1.1 trillion (2016); Canada and Mexico became the top two US export destinations.<\/p>\n<p><span class=\"n-term\">NAFTA\u2019s limitations<\/span><\/p>\n<ul>\n<li>Job losses and wage stagnation in US automotive and textiles \u2014 <span class=\"n-term\">Dani Rodrik and Joseph Stiglitz<\/span> noted relocation to lower-wage Mexico.<\/li>\n<li>Weak labour and environmental enforcement \u2014 <span class=\"n-sch\">Robert Kuttner<\/span>: NAFTA incentivised a <span class=\"n-term\">\u201crace to the bottom.\u201d<\/span><\/li>\n<li><span class=\"n-term\">ISDS<\/span> let corporations sue governments over public-welfare policy, undermining sovereignty (<span class=\"n-sch\">Joseph Stiglitz<\/span>). <span class=\"n-sch\">Robert E. Scott<\/span>, <em>The High Price of Free Trade<\/em> \u2014 higher trade but job losses, deficits and downward wage pressure.<\/li>\n<\/ul>\n<p><span class=\"n-term\">How USMCA (in force 2020) countered NAFTA<\/span><\/p>\n<div class=\"n-tw\">\n<table>\n<thead>\n<tr>\n<th>Lever<\/th>\n<th>Reform<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span class=\"n-term\">Labour<\/span><\/td>\n<td>Mexico required to protect unionisation and wage bargaining \u2014 <span class=\"n-sch\">Robert E. Scott<\/span>: mitigates the \u201crace to the bottom.\u201d<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">Environment<\/span><\/td>\n<td>Stronger commitments (marine litter, air quality, wildlife) with better enforcement.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">ISDS<\/span><\/td>\n<td>Narrowed and eliminated between the US and Canada \u2014 a win for national sovereignty.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">Rules of origin<\/span><\/td>\n<td>75% North American vehicle content (up from 62.5%) plus a minimum-wage-rate component \u2014 steering production to higher-wage US\/Canada.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">Dairy &amp; digital<\/span><\/td>\n<td>More US access to Canada\u2019s dairy market (<span class=\"n-sch\">Mary E. Burfisher<\/span>); new-age data-flow and localisation provisions (<span class=\"n-sch\">Susan Ariel Aaronson<\/span>, <em>Data is Different<\/em>). A 16-year sunset clause with six-yearly review.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><em>Assessments \u2014 <\/em><em>Gary Clyde Hufbauer<\/em><em> (NAFTA Revisited): auto rules and wage provisions reshape production. <\/em><em>Jeffrey J. Schott<\/em><em> and <\/em><em>Monica de Bolle<\/em><em>: rules-based trust and rare bipartisan support. <\/em><em>M. Angeles Villarreal and Ian F. Fergusson<\/em><em>: USMCA keeps North America competitive amid China\u2019s rise.<\/em><\/p>\n<div class=\"n-next\"><a href=\"\/psir\/notes\/saarc\/\"><em>Previous<\/em><b>SAARC<\/b><\/a><span><\/span><\/div>\n<p><\/main><\/p>\n<aside class=\"n-rail\">\n<h4>On this page<\/h4>\n<p><a href=\"#nafta-usmca\">NAFTA &amp; USMCA<\/a><\/aside>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>NAFTA for the UPSC PSIR optional \u2014 PSIR Notes \u203a II-A Comparative Political Analysis and International Politics \u203a NAFTA Paper I \u00b7 Comparative Political Analysis and International Po<\/p>\n","protected":false},"template":"","meta":{"jetpack_post_was_ever_published":false,"fx_note_key":"II-A.10.5","fx_note_sec":"II-A","fx_note_point":"10","fx_note_desc":"NAFTA for the UPSC PSIR optional \u2014 PSIR Notes \u203a II-A Comparative Political Analysis and International Politics \u203a NAFTA Paper I \u00b7 Comparative Political Analysis and International Po","footnotes":""},"class_list":["post-3569","psir_note","type-psir_note","status-publish","hentry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/psir\/wp-json\/wp\/v2\/psir_note\/3569","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/psir\/wp-json\/wp\/v2\/psir_note"}],"about":[{"href":"https:\/\/forumias.com\/psir\/wp-json\/wp\/v2\/types\/psir_note"}],"version-history":[{"count":1,"href":"https:\/\/forumias.com\/psir\/wp-json\/wp\/v2\/psir_note\/3569\/revisions"}],"predecessor-version":[{"id":3752,"href":"https:\/\/forumias.com\/psir\/wp-json\/wp\/v2\/psir_note\/3569\/revisions\/3752"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/psir\/wp-json\/wp\/v2\/media?parent=3569"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}