The Evolution of NAFTA

Abstract

Today, the world has indeed become more sharply demarcated in regional terms. The tendency for regionalism is evident both in developed as well as developing countries. The three distinct dimensions of regional space for the tendency to regionalism are: area (commonly known as territory); contiguity (parts are proximate to other or remote); and size (the extent of its scope). After the end of the Cold War phase in international politics, some very important developments took place, that is, ‘regionalism’. Regionalism has become an inescapable international political reality and an acceptable alternative to understand unilateral action and undependable United Nations (UN) intervention. Europe was merely a starting point for a further set of comparable experiments in integration. And, on the heels of European experience, there duly came attempts to create common markets and free trade associations in the Middle East, Africa, the Pacific and the Americas: the world was indeed filled in the 1960s with proposals for North American Free Trade Agreement (NAFTA), Pacific Free Trade Area (PAFTA), Latin American Free Trade Association (LAFTA) and even more. The NAFTA is the single example of a free trade area representing a group of two developed and one developing country. The NAFTA involves the creation of the world’s largest free trade agreement (FTA), with combined gross national product (GNP) of $6.3 trillion and a population of 363 million. The NAFTA, unlike other trade agreements, is not concerned exclusively with trade but also deals with environmental and labour standards. It is the first case of a developing country’s accession to this type of agreement with developed states on a fully reciprocal basis.