THE NEWS
When Mexico, the United States and Canada celebrate 20 years of free trade at the North American Leaders Summit on Wednesday, they will be accompanied by record figures for three-way trade and the regional economy.
Commerce among the three nations linked by the North American Free Trade Agreement (NAFTA) has increased by 350 percent since the accord was implemented in 1994, and the region has since consolidated into one of the most competitive in the world, according to analysts and government officials quoted by the Mexican news agency Notimex.
“Although NAFTA’s impact has at times been exaggerated, it has proven to be the most successful trade accord in the history of the United States, with the sole exception of the Uruguay Round,” said an analyst for the United States Chamber of Commerce.
In 1993, the last year before NAFTA went into effect, the Mexico and the United States registered a trade balance of $81.4 billion, with the surplus going to the U.S. by $1.6 billion.
In contrast, by 2013, the two countries reached a record trade figure of $506 billion, with the surplus shifting to Mexico.
“North America has emerged as potentially the most competitive region in the world for reasons made possible by NAFTA,” said Mexican Ambassador to the United States Eduardo Medina Mora, speaking at a recent forum organized by American University in Washington, D.C. “There have been fundamental advances, especially in the areas of border infrastructure and the capacity to process merchandise and transport people.”
For example, in 1993 barely 1.0 percent of the bilateral trade between Mexico and the United States was carried by rail. Today, it’s at 17 percent.
The three leaders — Presidents Enrique Peña Nieto of Mexico and Barack Obama of the United States, and Prime Minister Stephen Harper of Canada — will have the opportunity to take up what Medina Mora called a “strategic vision” for the region at the summit, which will take place in Toluca, the capital of the State of Mexico, not far from Mexico City.
“It’s important now to build this vision so that by establishing public policies focused on lowering the cost of doing business and increasing competitiveness, we can take maximum advantage of the potential that we have,” Medina Mora said, according to Notimex.
NAFTA’s 20th birthday has prompted a number of Washington think tanks to hold forums and roundtables discussing the accord, with the general consensus that the impact has been positive for all three nations.
Recently at one of the forums, sponsored by the Center for Strategic and International Studies, Charlene Barshefsky, a former U.S. trade representative, proposed an update for the accord.
“I don’t think it’s either smart or necessary to re-open NAFTA in any formal way,” she said. “But I do think there are paths to improving it.”
Carla Hills, another former U.S. trade representative, said the next phase of regional integration should include Mexico and Canada in the negotiations for a trans-Atlantic trade and investment agreement between he United States and the European Union.
Hills said that including Mexico in that process would help advance Peña Nieto’s reform program.
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