North American Free Trade: Issues and Recommendations

Negotiations toward a North American free trade area (FTA) started in early 1991. This study assesses the impact such negotiations would have on the US and Mexican economies, the goals of a North American ETA, and the implications for world trade relations. Three main topics are examined: the goals of the United States, Mexico, and Canada in pursuing closer trade ties, and the appropriate modalities and timetable for achieving those objectives; the implications of prospective negotiations: what should and should not be on the table, how the US-Canada model could be applied, and/or how that model would need to be modified; and the implications for the world trading system in light of the results of the Uruguay Round of multilateral trade negotiations in the GATT. The study also addresses specific questions relating to the liberalization of tariff and nontariff barriers; the application of countervailing and antidumping duties, investment in the energy sector, rules of origin, and hot potato labour issues (wages, health and safety, and environmental standards).