The 2008 U.S. presidential elections brought new attention to the debate over the North American Free Trade Agreement, or NAFTA, the free trade bloc uniting Canada, Mexico, and the United States. The Canadian, Mexican, and U.S. governments all broadly support NAFTA, but while campaigning the leading U.S. Democratic presidential candidates, Hillary Rodham Clinton and Barack Obama, said they wanted to renegotiate aspects of the deal. However, as president, Obama has not followed through with his election pledge. In April 2009, U.S. Trade Representative Ronald Kirk confirmed that President Obama has no plans to reopen or renegotiate (NYT) NAFTA. Trade relations have broadened substantially among the three parties to NAFTA since the deal's implementation, and all three have grown economically, Canada at the fastest average rate, Mexico at the slowest. Yet expert opinion varies on NAFTA's direct impact, given the multitude of other economic factors at play and the possibility that trade liberalization might have happened even without a trilateral agreement.
What is NAFTA?
NAFTA is a trilateral free trade deal that came into force in January 1994, signed by Democratic President Bill Clinton. The central thrust of the agreement is to eliminate the vast majority of tariffs on products traded among the United States, Mexico, and Canada. The terms of the agreement called for these tariffs to be phased out gradually, and the final aspects of the deal weren't fully implemented until January 1, 2008. The deal swept away export tariffs in several industries: agriculture has been a major focus, but tariffs have also been reduced on items like textiles and automobiles. NAFTA also implemented intellectual-property protections, established dispute-resolution mechanisms, and put into place regional labor and environmental safeguards, though some critics now lobby for stronger measures on this front.
How do economists assess NAFTA's economic impact?
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