NAFTA Research Articles

The effect of NAFTA on Mexico's wage gap

This paper studies how the North American Free Trade Agreement (NAFTA) affected the wage gap between high and low-paid workers within Mexico, considering internal migration. In low-skilled, labor-abundant developing countries, trade liberalization should theoretically increase the wages of low-skilled workers, decreasing income inequality. However, anecdotal evidence indicates that NAFTA increased the gap between rich and poor in Mexico, and empirical evidence is mixed (Hirte et al. 2020; Brülhart 2011; Bosch and Manacorda 2010; Nicita 2009; Chiquiar 2008; Hanson 2007; Gonzalez-Rivas 2007). Because trade may affect wages differently across regions within the country, accurate measures of wage effects must incorporate internal migration; otherwise, apparent wage convergence or divergence might only reflect a geographic resorting of workers. We evaluate wage changes by considering rural-to-urban migration. We first find a slight decrease in both internal and external migration in the years after NAFTA. Then, we find that all male workers see a wage reduction from trade openness, although the harm of high-wage workers almost doubled that of their counterparts with low wages. NAFTA also mitigated some of the wage differentials between the North and South. In summary, trade liberalization has reduced wage differentials among working-age men in urban areas.

Inclusion of gender and labour standards in preferential trade agreements: evidence from North American and Canada-Chile agreements

ABSTRACT This article analyses the causes of the incorporation of gender provisions into preferential trade agreements (PTAs), based an analysis of the reasons for the inclusion of both labour and gender provisions in the North American Free Trade Agreement (NAFTA) and the United States-Mexico-Canada Agreement (USMCA), and in the Canada-Chile Free Trade Agreement (CCFTA). Drawing upon feminist and constructivist analysis, it argues for the importance of ideational factors such as policy emulation, social learning, the formation of transnational advocacy networks (TANs), as well as the role of Global South actors. Gender provisions often contain neoliberal elements that promote female entrepreneurship rather than more transformational approaches. The comparison of the USMCA and the CCFTA shows that the inclusion of stronger gender provisions in labour chapters (as in the USMCA) may be a more effective way to promote the interests of vulnerable workers than the inclusion of a gender chapter.

A transdisciplinary approach to address the exclusion processes of the food regime for Mexico’s small-scale fishers and farmers

Mexico is one of the few countries that combine fishing and agricultural legacies. Despite the social importance and central role of food production, Mexican public policies have largely abandoned small-scale producers over the last four decades. Moreover, they have been relegated to the status of weakest link in the economic logic of the global food regime. Since Mexico signed the first North American Free Trade Agreement, small-scale fishers and farmers have faced five main problems: dismantling of means of production, erosion of organizational capabilities, disadvantageous commercial logic that limits access to favorable markets, westernization of diets, and frequent periods of food insecurity. This study addresses the following research question, how, in the face of the exclusion processes of the current food regime, the abandonment of public policies and erosion of most of the sectoral organizational capacities in Mexico, can small-scale fishers and farmers, as well as urban and rural consumers improve their productive, commercial and food problems within their living contexts? We introduced a novel transdisciplinary context-specific approach, based on our research experience in fishing and farming communities of the Yucatan Peninsula. Finally, we outline innovation niches that could lead to relocate regional food systems through complementarities between coastal and inland areas.

Impact of International Trade Agreements on Corporate Law

International Trade Agreements (ITAs) have a significant impact on corporate law. ITAs typically include provisions that affect a wide range of corporate law issues, such as reducing or eliminating tariffs and other trade barriers making it easier for corporations to export their goods and services to foreign markets, other provisions might protect foreign investment and promote investment flows between countries making it more attractive for corporations to invest in foreign markets. Some ITAs protect intellectual property rights, such as trademarks, copyrights, and patents that is important for corporations that rely on intellectual property to protect their products and services and ITAs also promote competition and prohibit anti-competitive practices which help ensuring that corporations compete fairly in the global marketplace. In addition, ITAs can also have a broader impact, for instance, ITAs can promote the adoption of common legal standards and practices, making it easier for corporations to do business in different countries. For Example, The North American Free Trade Agreement (NAFTA) includes provisions that made it easier for corporations to move goods and services between the United States, Canada, and Mexico leading to increased investment flows between these countries. The World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) has helped to strengthen the protection of intellectual property rights around the world which benefited corporations that rely on intellectual property to protect their products and services. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) includes provisions that promote competition and prohibit anti-competitive practices in the Asia-Pacific region ensuring that corporations are competing fairly in the market. Overall, this Research Paper summarises how ITAs have a significant impact on corporate law and Corporations involved in international trade should be aware of the provisions of the relevant ITAs and how these provisions may affect their business.

Hispanic worker attitudes toward pig euthanasia on U.S. farms.

On-farm pig euthanasia considers aspects of animal welfare and industry economics. Guidelines are available about the euthanasia process, but the agricultural workforce is highly diverse and guidelines do not consider cultural barriers. Euthanasia requires the ability to identify compromised pigs, technical skills, and willingness to euthanize pigs. In addition, timely euthanasia is part of the Common Swine Industry Audit (CSIA) and, thus, can lead to failed audits if not performed as required by the audit standards. The United States (US) swine industry employs a high percentage of Latin American workers, some US residents/citizens, and others through non-immigrant North American Free Trade Agreement (NAFTA) visas. These workers vary in their level of education and swine industry experience. Proper training of this workforce and identification of the barriers associated with performing timely euthanasia are critical to promote improved welfare practices. The objectives of this study were to: (1) develop a survey instrument to identify Hispanic caretaker attitudes toward pig euthanasia, (2) assess and describe swine caretakers' attitudes toward pig euthanasia using the developed survey instrument, and (3) determine the demographic and psychological barriers associated with performing pig euthanasia. Participants (n = 163) were surveyed from 16 farms across the State of Iowa. The on-farm survey was administered for two days in a period of 60 min per day. The results for demographics and the swine management survey data indicated that employees with less time working on the farm showed less knowledge of the CSIA, lower perceived ability to identify compromised pigs that needed to be euthanized, lower willingness to pecrform euthanasia on their own, and preferred not to have the responsibility of telling others when to euthanize pigs (p < 0.001). Secondary traumatic stress and transgressions were significantly correlated scales, associated with burnout, betrayals, and worker satisfaction (p = 0.022). Furthermore, individuals identifying as female had higher secondary traumatic stress scores (p = 0.026) and lower compassion satisfaction scores (p = 0.015). This data suggest that there are demographic, psychometric, and training-related factors correlated with Hispanic caretakers' feelings about pig euthanasia. The results of this study could be used to further improve and develop targeted training programs for Hispanic caretakers for early identification of compromised pigs and timely euthanasia, which could benefit human well-being, animal welfare, and the swine industry audit performance.

Analysis of the Difficulties and Countermeasures of East Asian Regional Economic Cooperation

Global economic development witnessed two significant developments during the 1990s: economic globalization and regional economic integration. East Asia's economy has been steadily developing, making it one of the most promising areas in the world economy. Nonetheless, East Asia's economic cooperation is developing far more slowly than that of the European Union and the North American Free Trade Area. East Asian nations have deeply realized that the only way to increase the competitiveness of their economies and, consequently, their overall economic strength is to actively participate in economic cooperation, as evidenced by the rapid development of trade and economic ties between the European Union and the North American Free Trade Area. This article aims to study the difficulties and countermeasures of East Asian regional economic cooperation in the context of current economic globalization and regional economic integration. According to this study, there are three key reasons why regional economic cooperation among Southeast Asian countries is problematic: political factors in East Asian countries, economic factors in East Asian countries, and social and cultural factors in East Asian countries. Various measures have been suggested to address the current challenges. These include fostering East Asian regional cooperation around ASEAN, expediting economic recovery through trade and economic cooperation, and fortifying cultural exchanges and cooperation to further the development of East Asian regional economic cooperation.

- Invited Review - Current status and future trends for pork production in the United States of America and Canada.

Pork production is a significant agricultural enterprise in the United States and Canada. The United States is the third-largest global producer of pork and Canada ranks seventh in pork production. The North American Free Trade Agreement and its successor, the U.S.-Mexico-Canada Agreement, have facilitated trade and integration between the two countries. The majority of production systems are modern and intensive, characterized by large vertically integrated farms using advanced technologies. Both nations benefit from their status as major producers of feed grains, with the United States leading in corn and soybeans, while Canada excels in canola and barley production. The regulatory frameworks for food safety, animal welfare, and environmental stewardship differ slightly, with the FDA and USDA overseeing these aspects in the United States, and Health Canada and the Canada Food Inspection Agency in Canada. The United States and Canada also have well-established distribution networks for pork products, relying on both domestic and international markets. Export markets play a crucial role, with the United States being a major importer of Canadian pigs, and both countries exploring opportunities in Asia. Despite a rise in global demand, domestic pork consumption trends differ, with per capita consumption remaining stable in the USA and declining in Canada. Changing consumer preferences, including a demand for ethically raised and locally sourced pork, may influence production practices. Future trends in pig production include a focus on consumer concerns, sustainability, disease prevention, reduction of antimicrobial use, and advancements in technology. The industry is adapting to challenges such as disease outbreaks and changing regulations, with a strong emphasis on animal welfare. Labor and workforce considerations, along with advancements in technology and automation, are expected to shape the efficiency of pork production in the future.

Land competition and welfare effects from Mexico's proposal to ban genetically engineered corn

AbstractSince joining the North American Free Trade Agreement, Mexico has increased its meat production and exports and become more dependent on imported feedstuffs such as genetically engineered (GE) corn. Mexico recently banned the use of GE corn in corn‐based foods and called for a gradual substitution away from the use of GE corn for other uses (e.g., feed). This paper considers how a complete ban on GE corn might affect Mexican households using a computable general equilibrium (CGE) model to simulate the impact over the medium run (5 years). Results indicate that Mexico decreases corn imports by 76.9% and increases corn production by 65.6%—an increase that would require 3.3 million hectares more land for corn. The policy leads to a 24.8% increase in Mexico's corn price and up to a 6% increase in the prices of other agricultural products. But Mexico might have difficulty shifting land to corn; as such, we consider an alternative scenario that restricts land movements. We find that impacts are further exacerbated in this scenario—for example, corn prices triple. Our final contribution is to pair these results with a compensating variation calculation based on the almost ideal demand system. We find that Mexican households would need to spend, on average, between 6.7 and 13.9% more on food, depending on the scenario, to compensate for the resulting price escalations. Ultimately, our results show that a move toward greater food sovereignty in Mexico is ultimately borne by consumers via higher food prices.

INTERNATIONAL TRADE IN AGRI-FOOD PRODUCTS IN THE CONTEXT OF REGIONAL PECULIARITIES AND INTERNATIONAL ECONOMIC INTEGRATION

This paper examines world trade in agri-food products in the context of international economic integration. This is due to the importance of foreign trade for the economic development of countries, especially in the context of globalisation, the increase in the number of integration groups whose participation affects the terms of trade of their member and non-member countries, and the aggravation of the food crisis. The purpose of this article is to identify the state and trends of world trade in agri-food products, taking into account regional characteristics and the participation of countries in integration groupings, and to determine their role in the future. Methodology. The research is based on a comparison of parts of individual regions and integration groups in world trade, identifying trends and features. The publication uses the methods of analysis, synthesis, generalisation, comparative assessment, and graphical methods, in particular, to identify the main trends, draw conclusions, etc. Results. The study shows that world trade in agri-food products is growing significantly, both globally and by region. The countries of Europe and the Americas are the main exporters, but the countries of Asia, South and Central America and Africa are the fastest growing exporters. However, the main suppliers remain the member countries of the most advanced integration groupings - the European Union, the North American Free Trade Agreement (NAFTA) and the Southern Common Market (MERCOSUR). It is proposed to divide the main exporters into regions, integration groups and countries. The issue of food security is one of the most important in modern conditions and within the integration groups. It is advisable that they contribute to some extent to solving this problem at the regional level and in relation to third countries. To this end, it is advisable to develop measures to provide food aid to countries affected by natural disasters, climate change or other adverse circumstances on several fronts: within integration groups, in the region and at the global level. These groups are expected to remain among the largest suppliers of agri-food products in the future, and one of the main reasons for this is their participation in integration groups, which facilitates the liberalisation of the movement of new technologies, in particular to the agricultural sector.

When Haste Makes Waste: Fair And Equitable Treatment Violations In Canada’s Feed-In Tariff Program Implementation And Lessons For Vietnam

Abstract Efforts to promote renewable energy investment as a key strategy against environmental issues from fossil fuels have raised legal and financial challenges. Governments, adopting policies like feed-in tariffs (FiT), initially attracted foreign investment but later faced resource wastage issues. Canada’s experience with FiT programs has led to investor-State disputes, underscoring the risks of not meeting the Fair and Equitable Treatment (FET) standard under the North American Free Trade Agreement (NAFTA). This article aims to provide recommendations to mitigate the risks of government’s policies that may lead to substantial legal disputes and hinder sustainable energy development. It delves into analyzing FET standards from arbitral practices in enforcing FiT programs, drawing lessons from Canada’s experiences to offer implications for Vietnam.

The Negotiation, Diffusion, and Legacy of NAFTA Chapter 11: An Empirical Eulogy

AbstractFollowing a three-year post-termination transition period to bring investor-state arbitration disputes, the investment protections afforded by Chapter 11 of the North American Free Trade Agreement (NAFTA) finally expired in June 2023. Chapter 11 was one of the most litigated, cited, commented, and copied investment treaties. An important, but largely ignored, part of its legacy is how the making of NAFTA Chapter 11 shaped its subsequent successful diffusion. Combining traditional legal assessment with computational text-as-data analysis, this article shows how the give and take during the negotiations generated buy-in on the part of Mexico and Canada and emulation by Latin American countries who helped to spread NAFTA Chapter 11 language globally. The link between the making and diffusion of NAFTA Chapter 11 highlights the power of negotiated compromise: sharing the pen with others may sometimes be the most effective way to write the rules that come to shape the world.

Renewable energy, technological innovation, carbon emission, and life expectancy nexus: experience from the NAFTA economies.

One essential component that reflects the development of society and the economy of most countries is life expectancy (LEXP). Nevertheless, LEXP can be influenced by varying factors, including socioeconomic and medical factors. Therefore, this analysis's focal point and motivation is to explore how socioeconomic factors such as economic growth, technological innovation, carbon emission, human capital, and renewable energy affect LEXP. The study utilized panel data from 1990 to 2020 from the North American Free Trade Agreement (NAFTA), which consists of the USA, Mexico, and Canada. The initial test confirmed that the research series were stationary and cointegrated. Therefore, the research applied the cross-sectional autoregressive distributed lag (CS-ARDL) model to predict the paper's short- and long-term estimates. The empirical estimated model concluded that human capital, renewable energy, technological innovation, and economic growth boost life expectancy. Contrarily, the outcome espoused that carbon emission has an inverse association with LEXP. The causality test confirmed a unidirectional interaction between human capital, economic growth, technological innovation, and life expectancy. On the other hand, there is a bidirectional connection between carbon emission, renewable energy, and life expectancy. The research suggests that stakeholders and policy-makers strengthen and enforce air quality standards to reduce pollution from industrial emissions and vehicle exhaust and encourage using cleaner technologies to promote LEXP. The research outcome is empirically and theoretically consistent, providing an essential breakthrough for environment-health-energy and economic development policies.

From NAFTA to USMCA: revisiting the market access – policy space trade-off

ABSTRACT This paper contributes to the literature on the evolution of North–South trade agreements, which historically involved countries in the global South relinquishing policy space for activist trade and industrial policies in exchange for locking-in preferential and stable market access. It takes as case study the renegotiation of the North American Free Trade Agreement (NAFTA), drawing on the agreements, media coverage of the negotiations, and 107 interviews with negotiators and stakeholders in all three countries. I show how the renegotiation resulted in changing conflicts: while the Mexican government attempted to preserve its market access and sought to further restrict its policy space due to path dependence, the Trump administration wanted to reduce market access for Mexico and create uncertainty to re-shore production. The Trump administration partially succeeded by undermining the lock-in effect of trade agreements and including unprecedented provisions in USMCA. The actions of the Biden administration indicate a long-term shift in US trade policy towards protectionism. Combined with the USMCA sunset clause, this creates the risk that the US will use USMCA review periods to create market access uncertainty instead of seizing the opportunities to strengthen North American economic cooperation.

신국제협정: 세 가지 패러다임에 관한 검토와 시사점

From the traditionalist position on international law, a new form of compact agreement, which cannot be classified as an international treaty in terms of academic framework, had long fueled much of contention in politics, international law, and constitutional law. A growing practice of compact agreement had been natural as corresponding with the global compression of international community and rising aspiration of peace regime on the international relations.&#x0D; The scholars of international law believe that, regardless of whether the President of the United States is an internationalist or an isolationist, the enactment of international law in the 21st century will be based on more pragmatic rather than formal criteria. It is still true whether or not he is willing to accept or escape the international obligations so that we can more realistically share the powers conferred by the Constitution.&#x0D; On the other hand, a constitutional controversy on somewhat mushy yet sophisticated issues on the compact agreements began with the Laurence Tribe's acrimonious criticism in 1990. He argues that a procedure between Congress and the executive branch for the Clinton administration's accession to the North American Free Trade Agreement(NAFTA) is unconstitutional. His criticism pointed out that the NAFTA is unconstitutional since it is contrary to the text and structure of the Constitution. On the other hand, scholars of political science believe that, while a politics is termed as the distribution of values, the new form of compact agreement serves connecting the domestic and international politics as a living organism and must be affirmed from the standpoint of parliamentary politics. The political scientists argue on the necessity and inevitability of a new form of international agreement as pursuant to the nature of political process on informal procedures and parliamentary practices.&#x0D; In respect of the theoretical controversy, the paper is devoted to survey what the new form of compact agreement is, what types we can identify and explore the theoretical contest among the disciplines. As the dealings of paper attempt to touch on the core of scholarly assertions as fundamental and philosophical, the endeavor could inculcate the mind of international lawyers within and outside the government by providing a better framework to understand the specific real-world issues. The perception and rationale for the new form of international agreement should differ varying with their academic disciplines from which their thought stems from. The paper ends with implications within the grand scale of jurisprudence.

Estimating the unintended impact of the North American free trade agreement on U.S. public health

The North American Free Trade Agreement (NAFTA) was introduced in 1994 between Canada, Mexico, and the United States to encourage trilateral trade. In 2008, an unrestricted reciprocal sugar trade agreement, was implemented between Mexico and the United States as part of NAFTA, which led to a significant decrease in the United States’ sugar price. However, critics argue that free trade agreements that reduce trade barriers on products such as sugar threaten public health. This study uses the synthetic control method to investigate the causal impact of the unrestricted sugar trade agreement on sugar consumption and diabetes prevalence in the United States. First, we show that sugar consumption in the United States increased by an average of 16% annually after the agreement was signed, corresponding to 5240g per capita. Second, we show that the crude prevalence of diabetes increased by an average of 1% annually in the United States after the agreement was signed, with an increase of 1% and 2% for men and women, respectively. This unintended consequence of NAFTA has had an estimated economic cost of $324.37 million annually.

Shareholder Claim for Reflective Loss Status and ISDS: Between North American Free Trade Agreement and Central America-Dominican Republic Free Trade Agreement Practices

Shareholder Claim for Reflective Loss Status and ISDS: Between North American Free Trade Agreement and Central America-Dominican Republic Free Trade Agreement Practices

Covid-19 epidemic and regional carbon emissions: A study based on metabolic multivariate grey model with new information priority

The COVID-19 epidemic has had an unexpected impact on global carbon emissions. In this context, carbon emission prediction is very important for policy formulation and implementation. It is worth pondering how the grey model deals with the prediction of unexpected events. Considering the spatial dependence of carbon emissions, this paper improves the multivariate grey model, gives new information a higher reference weight, and constructs a metabolic multivariate grey model -MMGM(1,m|λ) which takes new information as the priority. An optimization algorithm is constructed with the minimum error as the goal to determine the value of the weight adjustment parameter λ. Then we simulate and predict the carbon emissions of three regions: China’s Yangtze River Delta (Shanghai, Jiangsu, Zhejiang, and Anhui), the North American Free Trade Area (Canada, Mexico, and the US), and West Europe (the UK and France). These three cases have different regions, different numbers of behavioural variables, different degrees of influence by COVID-19, and different trends, which are comparative. The results show that the new model has a good fitting effect, and it is still applicable in dealing with unexpected events. The new model can reflect regional carbon emission changes more systematically and accurately. Finally, according to cases and discussions, we get some management enlightenment to promote regional environmental collaborative governance.

The economic impact of trade openness on Mexico's indigenous peoples

AbstractTrade liberalization and openness tend to increase regional inequalities, especially in developing economies, where infrastructure and institutions are immature. Trade‐induced inequalities often deteriorate into horizontal inequality across demographic groups and result in the peripheralization of the disadvantaged. This study aims to assess the impact of trade openness on Mexico's indigenous peoples using a difference‐in‐differences regression analysis framework. We show that Mexico's indigenous peoples have experienced significant disadvantages regarding employment opportunities and economic productivity (measured by gross value added) compared to their nonindigenous counterparts under the North American Free Trade Agreement. We conclude by discussing the relevant implications for policy design to address the disparity.

Análisis espacial de la dinámica del salario, flexibilidad y productividad laboral en las entidades federativas mexicanas, 2000.1-2021.1

The liberalization process in Mexico, which intensified with the North American Free Trade Agreement in 1994, brought changes in the structure of labor markets due to labor flexibilization. With information from the National Institute of Statistics and Geography and the Secretariat of Labor and Social Welfare, a spatial model of autoregressive vectors is estimated to analyze the impact that labor flexibility has had on real wages and productivity in the 32 states of Mexico. The model verifies that there is causality, in the Granger tests, between labor flexibility and wages, though the generalized impulses prove that this impact is negative in the majority of the 32 states. Evidence is presented that past labor flexibility, average labor productivity, and wages positively influence their future behavior; in addition to the fact that the wage increase of a particular state positively affects its neighbors (push-out effect) and, that this state is affected when an increase in real wage occurs in its neighbors (push-in effect).

Does the U.S. Congress Respond to Public Opinion on Trade?

Are U.S. legislators responsive to public opinion on trade? Despite the prevalence of preference-based approaches to international trade, not much work has directly assessed the relationship between constituency opinion and positioning by members of Congress on trade bills. We assess dynamic responsiveness (whether shifting constituency opinion on trade yields corresponding changes among legislators) by exploiting an original dataset on the positions of members of Congress on the North American Free Trade Agreement at various points leading up to the November 1993 roll-call vote. We find no evidence of dynamic re-sponsiveness to shifting constituency opinion on even a highly salient piece of trade legislation. We provide qualitative evidence that interest group influence may instead be the predominant source of shifting legislator positioning on trade.