Historical Trade Agreements

Congress approved the negotiations in 1984 and the United States Canada-United States Free Trade Agreement was concluded in 1988. When Mexico, to everyone`s surprise, sought a similar agreement, the result was the North American Free Trade Agreement (NAFTA) with three nations. This turned out to be the most controversial of all U.S. trade deals, in part because average wages in Mexico were only a fraction of U.S. wages, giving Mexican products an advantage over labor-intensive goods and thus threatening U.S. employment. After a Herculean fight, the Clinton administration won congressional approval in 1993. Trade unions and environmentalists in rich countries have been the most active in the search for labour and environmental standards. The danger is that the application of these standards will simply become an excuse for protectionism in rich countries, which would harm workers in poor countries. In fact, the people of poor countries, capitalist or working class, were extremely hostile to the imposition of such norms. For example, the 1999 WTO meeting in Seattle partially collapsed because developing countries opposed the Clinton administration`s attempt to include labour standards in multilateral agreements.

One of the difficulties of the WTO system has been the problem of maintaining and expanding the liberal system of world trade in recent years. Multilateral negotiations on trade liberalization are progressing very slowly and the demand for consensus among the many WTO members limits the extent to which trade reform agreements can go. As Mike Moore, a recent director-general of the WTO, said, the organization is like a car with an accelerator pedal and 140 handbrakes. While multilateral efforts have been successful in reducing tariffs on industrial goods, they have been much less successful in liberalizing trade in the agricultural, textile and clothing sectors, as well as in other sectors of international trade. Recent negotiations, such as the Doha Development Round, have encountered problems and their ultimate success is uncertain. To mitigate the potential drawbacks and reap the potential benefits of international trade, “companies need to assess the risks and opportunities that the changed trade rules create in their global value chains, develop action plans based on various potential outcomes, and work proactively to influence policy,” the Boston Consulting Group said. From the 1930s to the 1980s, the United States` fundamental political fault line in trade was economic. workers and businesses threatened by trade competition have supported increased trade barriers; Those who saw the benefits wanted to reduce them. The former, faced with losses, being politically more active, US negotiators had to look for “trade winners” (exporters, international investors) and engage them politically. They also used broader arguments, cited economists` estimates of the broad welfare benefits of trade, and drew attention to international political gains. . .

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