North American Free Trade Agreement Countries Research Articles

Going away or going green in NAFTA nations? Linking natural resources, energy utilization, and environmental sustainability through the lens of the EKC hypothesis

This current study provides new insight by presenting the role of natural resources and renewable energy use in affecting carbon emissions in the background of the Environmental Kuznets Curve (EKC) hypothesis for the members of the North American Free Trade Agreement (NAFTA) considering the period from 1990 to 2018. Besides, the analysis controls for the influx of FDI to assess the validity of the pollution haven hypothesis as well. The results unveil the existence of the EKC hypothesis by verifying an inverted U-shaped association between economic growth and carbon emissions, only in the long run. Besides, evidence regarding the environmental resource curse is also revealed as higher natural resource consumption is seen to trigger a higher discharge of carbon dioxide both in the short- and long-run. Moreover, only in the long-run, higher renewable energy consumption is associated with lower volumes of carbon emissions. In addition, the pollution haven hypothesis is found to be invalid both in the short- and long-run. Lastly, the ratification of NAFTA is evidenced to foster economic progress but inhibit environmental sustainability for its members in the long run. Hence, it can be said that the NAFTA countries are going away rather than going green. Furthermore, these findings are mostly seen to be heterogeneous, in terms of magnitude, across different environmental pollution quantiles. Lastly, the analysis unearths unidirectional causalities extending from economic growth, renewable energy consumption, and foreign direct investment inflows to carbon dioxide emissions without the respective feedback causality. In light of these major findings, this study recommends some critically important policies.

Financial Market Integration Between Stock Market From North American Free Trade Agreement (NAFTA) Member

Economic recession or crisis could show a higher possibility of financial crisis transmission in an integrated stock market. Integration between financial markets is a channel of spreading the devastating effects of the crisis. The objective of this study is to detect significant interactions among the stock markets of countries that are members of the North American Free Trade Agreement (NAFTA). NAFTA is a regional partnership with members from the United States, Canada and Mexico that are committed to reducing trade and investment barriers between member countries. The methodology of this research with VAR VECM model consists of three stages, the first analysis of the presence impact of the stock market index using the Granger Causality Test. Second, analyze the speed of response of an index to a change / shock in another index using the Impulse Response Function (IRF). The third stage analyzes the impact of changes / shocks from one index to other indices by using Variance Decomposition. From the 5 sets of stock market data for NAFTA countries, the results of the study show that there is only one cointegration. When viewed in the cointegration process of each of the two data series, cointegration occurs between the Nasdaq index with TSE and Nasdaq with MSE. Whereas TSE and MSE did not find any cointegration.

Predictors of carbon emissions: an empirical evidence from NAFTA countries.

This study examined the predictors of carbon emissions in member countries of the North American Free Trade Agreement (NAFTA). Panel models robust to cross-sectional dependence and slope heterogeneity were used for the study. From the heterogeneity and cross-sectional dependence tests, the studied panel was heterogeneous and cross-sectionally dependent. Also, the unit root and cointegration tests established the series to be first differenced stationary and cointegrated in the long run. Additionally, results of the CCEMG regression estimator in the whole panel affirmed economic growth (GDP) to be a significantly positive predictor of CO2 emissions, while foreign direct investments (FDI) and population growth (POP) were trivial determinants of CO2 emissions. The discoveries were however diverse in the individual countries. Finally, there was no causality between GDP and CO2 emissions and between POP and CO2 emissions. However, there was a one-way causality from CO2 emissions to FDI. Policy recommendations are further discussed.

Purchasing power parity vs. uncovered interest rate parity for NAFTA countries: The value of incorporating time-varying parameter model

In 1994, the United States, Canada, and Mexico signed the North American Free Trade Agreement (NAFTA) to strengthen economic cooperation. To examine the effects of the NAFTA, this study revisits Purchasing Power Parity (PPP) for NAFTA countries by applying a time-varying cointegration model. Under the time-varying assumption, it improves the explanatory power of reality via the model specification test. Given that, the validity of PPP for NAFTA countries varies over time. Especially, the PPP elasticity based on the consumer price index (CPI) is more volatile than the producer price index (PPI) -based. Thus, the stabilization policy of the consumption sector must be a high priority over the production sector. Moreover, the validity of the Uncovered Interest Rate Parity (UIRP) is examined by the time-varying cointegration model. The aim is to compare the results of the PPP and UIRP. This suggests that the PPP is more useful than the UIRP in evaluating the movement of the exchange rate in the long-run.

Energy Consumption and Financial Development in NAFTA Countries, 1971–2015

To satisfy human needs and desires, it is necessary to produce goods and services that require the use of some production factors, such as labor, capital, and energy, among others. Nowadays, energy is a key production factor for economic activity in all countries. The main objective of this paper is to analyze the relationship between energy, economic growth, urbanization, and financial development in the country-members of the North American Free Trade Agreement (NAFTA) during the period of 1971–2015. Panel data Econometric methods are applied in this research, namely cross-section dependence (Pesaran test), unit root (Cross-sectional Augmented Dickey Fuller and Cross-sectional Im, Pesaran, and Shin tests), cointegration (Kao and Fisher–Johansen tests), and heterogeneous causality (Hurlin and Dumitrescu test). The results achieved in this research demonstrate that the variables of this model are characterized by a cross-section dependence, and they are integrated in order one. An equilibrium or long-term relationship between them exists. By means of the Fully Modified OLS and Dynamic OLS estimators it this demonstrated that there is a positive relationship between GDP and EC, while there is a negative relationship between FD, CPI, URB, and TO and EC. The economic policy recommendations drawn from this investigation are that financial development promotion, urbanization, and trade openness may contribute to reducing energy consumption in these countries.

NAFTA's Approach to Public Services

Public services are treated differently in the North American Free Trade Agreement (NAFTA) compared to the WTO General Agreement on Trade in Services (GATS) and European Union (EU) trade treaties. The approach in NAFTA, which is followed in many bilateral and regional agreements worldwide, has three main distinctive characteristics: 1. NAFTA is a negative list agreement – meaning that all of the obligations in the treaty, including those related to services and investment, apply to all state actions except to the extent specifically carved out through reservations or exceptions. GATS and EU trade treaties to date are positive list agreements in which many obligations only apply to sectors listed by each party. 2. NAFTA contains no general exception from all treaty obligations for public services. There is no exception for services delivered in the exercise of governmental authority as is found in the GATS and many EU trade treaties, nor is there any unifying concept of public services in the treaty. Instead, there are a variety of limited exceptions and country-specific reservations that exclude the application of certain treaty obligations to some identified kinds public services and to specific measures that may be related to public services, like subsidies. 3. NAFTA contains comprehensive obligations relating to investment, which are not found in the GATS or EU trade treaties. These obligations are similar to those found in the bilateral investment treaties of EU member states.Because it relies on reservations for lists of services instead of a general exception that excludes all services that have the character of public services, NAFTA’s protection of state regulatory freedom in relation to public services is arguably more certain but over-inclusive for public services that are named in reservations and under-inclusive for public services that are not specifically named. Some public service activities, like waste removal, are not the subject of any special rules. All NAFTA’s investment and services obligations apply to these services. Others, like postal services, are subject to reservations from some obligations but some of these apply to only one country. Some NAFTA obligations, notably the Parties’ obligations not to expropriate investments without compensation and to provide fair and equitable treatment to investments, apply to all public services. No reservations are permitted. The broad scope of NAFTA’s investment obligations and their ability to constrain the public service policy choices of NAFTA countries render their application to public services a particular concern. NAFTA has not be updated to adopt some of the limitations on investment obligations that that Canada and the US now routinely incorporate in their treaties, such as a specification of when an indirect expropriation occurs and, in Canada’s case, the application of GATT Article XX-like exceptions to investment obligations.

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Is NAFTA Plus an Option in the North American Agrifood Sector?

With the implementation of the North American Free Trade Agreement (NAFTA) nearly complete, there are concerns that the easy gains in efficiency have been achieved and that additional steps towards the economic integration of the member countries are required. This poses a distinct challenge to the NAFTA governments, since the agreement did not create trinational institutions with the supranational authority to facilitate the deepening of the new trading environment. In any initiative to further the economic integration of the NAFTA countries, agriculture will be a difficult sector in which to make progress. However, at an aggregate level, the support provided directly to agricultural producers by the NAFTA governments is similar, as are tariffs at an aggregate level. All three countries have devised income support programmes that contain a countercyclical element. In each of these areas, as well as in the operation of ‘green box’ programmes that are consistent with the member countries’ obligations to the World Trade Organization, cooperation and consultation among the NAFTA members would seem crucial if they are to achieve greater integration in the agrifood sector. This article examines the opportunities and challenges facing the NAFTA members as they seek further integration in the agrifood sector.

Challenges faced by the IR‐4 Programme and US specialty crop growers

The Food Quality Protection Act (FQPA) was enacted in August 1996 and required the US Environmental Protection Agency (EPA) to reassess all existing and new crop protection active substances using a new set of health and environmental standards to further protect infants and children. The initial fear that many minor or specialty crop use registrations would be lost without adequate replacements has largely been overcome by an aggressive programme by the International Research Project no. 4 (IR‐4) in partnership with the EPA and the crop protection industry to register new, safer, reduced risk products for specialty crop pest control needs. Since the FQPA, the EPA has approved over 5600 new specialty crop uses resulting from IR‐4 residue programmes. This amounts to about 56% of the over 10 000 clearances received by the IR‐4 programme in its 43 year history and about 50% of all new uses granted by the EPA since FQPA. The positive outcomes from these efforts have been partially negated by the lack of tolerances or Maximum Residue Levels (MRLs) in countries to which US produce is exported. This has forced some US specialty crop growers to continue to use older, less desirable products. IR‐4 has been addressing this challenge by cooperating in the NAFTA (North American Free Trade Agreement) countries with Agriculture and Agri‐Food Canada's Pest Management Centre and Health Canada's Pest Management Regulatory Agency to harmonize MRLs through joint projects and regulatory reviews. IR‐4 has also provided leadership for the International Crop Grouping Consulting Committee to harmonize specialty/minor crop groupings and representative crops for residue studies with the long‐term goal being to globally harmonize MRLs.

A NAFTA Dividend: A Guaranteed Minimum Income for North America

This paper explores the desirability and feasibility of a minimum income for the North American Free Trade Agreement (NAFTA) region. I review arguments in support of a basic income or a negative income tax for the European Union (EU). Then I examine ways in which the NAFTA countries do and do not resemble the EU in aspects relevant for the desirability and feasibility of a regional basic income. I argue that a case can be made for a North American guaranteed income, grounded, with respect to desirability, in a globalist theory of justice, and with respect to feasibility, in the necessity of moderating the flow of labor migration. A universal regional basic income is a useful tool for regional development that is fair and that insures better than does the current NAFTA that cooperation benefits the least advantaged.

The Security and Prosperity Partnership of North America

I. Introduction On March 23, 2005, U.S. President George Bush, former Mexican President Vicente Fox, and former Canadian Prime Minister Paul Martin jointly announced the establishment of the Security and Prosperity Partnership of North America (SPP). (1) The SPP is a framework for trilateral and bilateral cooperation in North America. While not a formal international treaty, nor an overarching binding legal agreement, it does contain two important agendas relevant for the post-September 11 era: one revolving around national security and the other around economic prosperity. Three key principles support these two agendas: improved security from external threats to North America; strengthened internal security measures; and bolstered economic growth for the region as a whole, particularly in the face of growing global competition. Negotiators made reports to each state's leaders on the initial SPP-related international collaboration in late June 2005. Officials are currently developing additional agendas for future work and pursuing limited implementation of some policy objectives. The SPP's security track includes three main priority areas: 1) securing North America from external threats through traveler and cargo security and bioprotection; 2) preventing and responding to threats within North America by developing common approaches to critical infrastructure protection, port security, intelligence sharing, and transnational threats; and 3) streamlining low-risk travelers and cargo across borders. (2) On the prosperity front, the SPP's major initiatives involve 1) measures to improve productivity through regulatory cooperation and business collaboration; 2) efforts to reduce the costs of trade by more efficiently moving goods and people across borders; and 3) policies related to quality of life, such as environmental, disease, and food safety management. (3) Movement on both the security and prosperity agendas occurs through a number of inter-agency and bi- or tri-national working groups. Work thus occurs on multiple levels, across inter-governmental lines, and across the U.S.-Canada international border with the goal of harmonizing some regulatory regimes. We argue the SPP is important and interesting in terms of both policy formulation and the wider U.S.-Canada bilateral relationship. This is the case for a variety of reasons. First, it represents a modest reinvigoration of the North American integration project, pursuant to the new security conditions of the post-September 11, 2001 period. In some ways it signals the next step in advancing historical trade and security relationships, many of which were last articulated significantly through the North American Free Trade Agreement (NAFTA) and the Smart Border Accords. Like some scholars have viewed NAFTA itself, many policy-makers see the SPP as a way to lock-in integration gains achieved through NAFTA and then deepen some economic and security arrangements among the three partners. Second, the SPP operates under the assumption that security and trade are compatible, explicitly detailing goals in both areas. Third, the SPP integrates unique degrees of bilateral and trilateral flexibility to accommodate the differing political and economic conditions of the three NAFTA countries. Finally, the SPP's objectives are largely being negotiated and pursued through executive-to-executive branch arrangements and multi-agency working groups that solicit some stakeholder input from a limited set of groups. The negotiation process proceeds in an incremental manner, backed, at least at the moment, by high-level political will in Ottawa, Washington, D.C., and Mexico City. This paper addresses the following broad research questions. First, what is the historical lineage the SPP draws upon in regards to the wider U.S.-Canada relationship? In other words, are there lessons from history that can inform the SPP process as it proceeds? Second, what theoretical insights from the field of International Political Economy (IPE) and political science more generally can be used to understand the SPP and the process of policy-making and negotiating it entails? …

NAFTA Professional Mutual Recognition Agreements: Comparative Analysis of Accountancy Certification and Licensure

The North American Free Trade Agreement (NAFTA) countries have worked toward the signing of Professional Mutual Recognition Agreements (PMRA) allowing for accounting professionals to practice across borders. On September 27, 2002, the representatives of the United States NASBA/AICPA International Qualifications Appraisal Board, the Canadian Institute of Chartered Accountants' International Qualifications Appraisal Board, Mexico's Instituto Mexicano de Contadores Publicos, and Comite Mexicano para la Practica Internacional de la Contaduria signed the PMRA for the accountancy profession agreeing on the principal elements for granting accounting certification and licenses: education, examination, and experience. NAFTA's Free Trade Commission affirmed the PMRA on October 7, 2003. This paper reports on the certification and licensing requirements that currently exist for Canada, Mexico, and the United States. Since it is NAFTA's 10th Anniversary it is important to discuss the implementation of the PMRA for foreign accounting professionals to gain permits to practice in the other NAFTA countries. The authors are working under the NAFTA Challenges of Accounting and Business Systems grant from the United States Department of Education Fund for the Improvement of Post-Secondary Education (FIPSE), Human Resources Development Canada (HRDC), and Mexico's Secretaria de Educacion Publica (SEP).

Transnational Activist Networks and the Emergence of Labor Internationalism in the NAFTA Countries

Recent accounts of transnational activism have examined a variety of social movement organizations (SMOs) but have paid little attention to labor transnationalism. This article utilizes and adapts this new transnational social movements scholarship to understand contemporary labor activism in the North American Free Trade Agreement (NAFTA) countries. Exploring the preexisting networks and intramovement cleavages that helped spawn labor opposition to NAFTA, it focuses on labor activists' complaints under the treaty's labor side accord. I explore how rising political opportunities associated with the treaty and its new institutions created new political arenas, targets for activists, and incentives for cross-border collaboration. The cross-border political exchanges that formed part of labor activists' strategies to utilize these new institutions helped activists create new movement frames, transnational identities, and coalitions. While these outcomes support the findings of literature on transnational SMOs, they point to the particular dilemmas labor activists faced in confronting these issues due to their vulnerability, the status of unions as formal organizations embedded in national institutional structures, and the difficulty of imagining policies and strategies that might be effective in this new transnational sphere.

Business ethics in the NAFTA countries: A cross-cultural comparison

This article examines the nature and extent of similarities and differences in cultural values among managers in the three nations that signed the North American Free Trade Agreement (NAFTA). One component of a culture is ethics, with this aspect of a culture existing as a potentially strong influence on the success of business organizations. In order to explore the impact of culture on ethical decision making in the NAFTA countries, we review the literature and develop propositions concerning the dimensions of culture that would be expected to influence the ethical standards applied to business decisions and organizational practices. The analysis applies Hofstede's [Culture's consequences. Beverly Hills, CA: Sage, 1980.] four cultural dimensions in the three NAFTA countries, which include individualism vs. collectivism, uncertainty avoidance, power distance, and masculinity. We also examine three additional cultural factors — attitude toward work, problem solving, and view of human nature. Propositions are presented involving the prevalence of codes of ethics, issues relating to bribery of public officials, and treatment of low-level employees. Finally, we discuss research design issues relevant for empirical investigation of the propositions.

Impacts of Globalization on Agricultural Competitiveness: The Case of NAFTA

Major components of agricultural competitiveness, including definitions, factors, and indicators of competitiveness, are discussed. The case of the North American Free Trade Agreement (NAFTA) is used to illustrate how factors have influenced the competitive position of the NAFTA countries. Traditional neoclassical trade theory is used to evaluate the impact of currency exchange rate fluctuations and trade preferences on agricultural competitiveness. Pre- and post-NAFTA market shares are evaluated for five agricultural commodities of importance to the southern United States. The results of these evaluations are compared with theoretical expectations and discussed with special emphasis on implications for future trade negotiations.

Linking biodiversity information sources

Linking biodiversity information sources

NAFTA as a Means of Raising Rivals' Costs ?

The North American Free Trade Agreement (NAFTA) was designed to reduce tariff rates between Mexico, Canada and the U.S.A. over a period of ten years. However, lower tariff rates are only available to firms that comply with complicated and costly NAFTA filing regulations. Such regulations raise costs of small firms relative to large firms in a domestic industry which engages in trade between NAFTA countries. This implication of NAFTA regulations can lead to increased concentration in domestic industries, an hypothesis which can be tested as the transition period comes to an end. Finally, our model suggests an explanation for why the levels of trade from the U.S.A. to Mexico have been lower than general expectations.

An Industrial Analysis of Trade Creation and Diversion Effects of NAFTA

Welfare effects of economic integration are often studied with aggregate data, and as such provide limited insights about the effects of trade pacts to individual economic agents in the free trade area. In this study a three-digit disaggregated commodity/ industry data grouped under the Standard International Trade Classification is used to empirically assess the economic benefits of the North American Free Trade Agreement (NAFTA). Import demand elasticities from a dynamic demand model were used to estimate both trade creation and trade diversion effects of removing all tariff barriers from among NAFTA countries – US, Canada and Mexico. Results show that US imports of crude oil and petrole - um products from Canada and most US imports from Mexico are more sensi - tive to domestic prices than to bilateral import prices. Further, results indicate that US will benefit the most from the initial trade effects of NAFTA, while Mex - ico will benefit the least. Specifically, US exporters of automatic data processing equipment, and pulp and waste paper products will benefit the most from increased trade with NAFTA countries. Mexican exporters of crude oil, and veg - etables and fresh produce; and Canadian exporters of paper and paperboard products will be the most beneficiaries of NAFTA among exporters in these respective countries.

NAFTA: Setting the Record Straight

HE North American Free Trade Agreement (NAFTA) was sold on the basis that it would bring a substantial expansion of US exports to Mexico and boost Mexico’s economic growth. Since its passage, however, not everything has gone as planned. In 1995 — scarcely a year after NAFTA came into effect — Mexico was in the midst of its worst economic crisis in decades. Meanwhile, rather than the anticipated expansion, US exports to Mexico went down. Has, then, NAFTA failed? The short answer is ‘no’. While many more years will be required before it is possible to make a meaningful assessment of the agreement, NAFTA’s expected benefits are beginning to materialise. Trade among the three NAFTA countries has been expanding to record levels and the number of US-Mexican business partnerships is on the rise. Moreover, despite the 45 per cent real devaluation of the peso, the seven per cent drop in Mexican output and Mexico’s 22 per cent fall in real wages during 1995, 1 US exports to Mexico were much less affected than Japanese or European exports largely thanks to NAFTA. Indeed, while exports to Mexico from the rest of the world, notably Japan and the European Union, fell by about 25 per cent, US exports contracted by less than two per cent. 2 Despite these positive trends, many Americans in and out of the Congress are proclaiming that NAFTA was a mistake. To a large extent, the statements against NAFTA are based on erroneous beliefs or egregious distortions. NAFTA is blamed for US job losses or declining living standards of workers, particularly the unskilled. In reality, the impact of NAFTA on gross job displacement in the United States has been negligible. Furthermore, there is some evidence that NAFTA’s net employment effect (the difference between jobs displaced and jobs created) has been positive.

NAFTA report paints rosy scenario

An analysis by the Clinton Administration of the first three years of the North American Free Trade Agreement (NAFTA) indicates that the controversial treaty has accomplished everything it set out to do. According to the report, exports and imports are both up, employment is up, and environmental problems are decreasing. Data on changes in chemical trade show modest increases in trade between the U.S. and Mexico and vice versa. Between 1993 and 1996, U.S. chemical exports to Mexico rose from $3.4 billion to $5.1 billion. This 50% increase compares favorably with the 37% increase in the value of U.S. chemical exports to non- NAFTA countries. Mexican tariffs on U.S. chemicals and allied products dropped from 10% to 4%, on average, and tariffs were eliminated completely on 31% of the imported chemical products previously subject to duty. U.S. chemical imports from Mexico more than doubled during the same period, rising from $600 ...