How to Improve NAFTA
Trade pacts like NAFTA must no longer be regarded merely as charters of rights for large corporations. Instead, they must serve ordinary citizens and address their problems, such as low wages, endemic corruption, and human-rights violations.
MEXICO CITY – As US President Donald Trump promised, renegotiation of the North American Free Trade Agreement (NAFTA) has commenced. The initial talks are already sending a clear message: the disagreements to be resolved by Canada, Mexico, and the United States are fundamentally political, not economic, and they are as pronounced within each country as they are between them.
Contrary to popular belief, the true global trade dilemma of our time is not so much liberalization versus protectionism, but the rights of capital versus the rights of people. In recent years, trade pacts have exacerbated imbalances on that front, by failing to deliver benefits for the many, rather than for a relatively few powerful corporations.
In this context, a focus on improving each NAFTA economy’s trade balance would be misguided. Instead, negotiators must aim to spread the benefits of trade more widely, by taking better advantage of the opportunities for cooperation stemming from geographical proximity, complementary labor markets, demographic dynamics, and economic integration.
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