History: November 18, 1993: Reviled Trade Agreement, NAFTA, Passed by House

A Brief History

On November 18, 1993, the US House of Representatives passes the North American Free Trade Agreement that had been negotiated by President George HW Bush in 1992. President Clinton, assuming office in January of 1993, negotiated a couple small amendments to the agreement at the behest of congressmen.

Digging Deeper

Negotiated by Mexico, the United States and Canada, the measure replaced the previous trade agreement between the US and Canada known as the Canada-United States Free Trade Agreement. In Canada, most political representatives were against the NAFTA pact, but since the opposition was split between 2 groups the party that supported NAFTA prevailed.

In the United States, popular opinion has been strongly against NAFTA ever since it went into effect on January 1, 1994, and it has become a favorite issue of Republicans to attack Bill Clinton, even though the agreement was negotiated by Republican President GHW Bush and during the 8 years of the George W. Bush administration (2001-2009) the pact was not repealed or replaced. In fact, the House vote included 132 Republicans voting for the agreement and only 102 Democrats voting for it. (That preponderance of Republican support is something you would never believe in the years since!)

The incredibly complicated (to me, anyway) economic and social impact of NAFTA on each member country has generally been fairly small over all, although certain segments of the economy of each country may have benefited more or less due to the agreement. With so many assembly plants for cars and other durable products moved to Mexico, the rust belt states (around the Great Lakes) have suffered job losses in manufacturing due to the agreement. The balance of trade for the US is overwhelmingly positive for services, but for goods the US has an enormous trade deficit with Canada and Mexico. Either way, politicians love to attack NAFTA and blame it on their opponents. Still, as of yet, no credible replacement has been offered.

One stipulation you may have missed is that NAFTA allows business and people to sue the government of member countries for policies claimed to have been detrimental (violating international law and agreements) to the aggrieved company.

President elect Donald Trump has called NAFTA “The single worst trade deal ever approved.”

Trump claims he will either renegotiate NAFTA or just unilaterally pull out of the agreement. Critics claim such action would be terrible for our economy. NAFTA gets so much bad press that any upcoming trade agreements are tarred by the same brush (TPP). What do you think? Please share your opinions about this controversial trade agreement. (In all honesty, the author barely knows what to think about it, but the dreaded “gut feeling” says it was a mistake.)

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