The Future of NAFTA in the Post-National Era

Abstract

The formation of the North American trade bloc represents a dramatically different variant of trade liberalization from its Cold War predecessor. The latter reconciled the need to promote greater openness with Keynesian kinds of social welfare measures. By contrast, global free trade-for-all wants every sector and every aspect of society to be open to competition. For Canada and Mexico with their weak industries, NAFTA has no mechanism to neutralize the asymmetry of power between the partners. It does not have a way to redistribute the benefits of economic integration. Nor does it have the resources to address the magnitude of adjustment that is occurring. Finally, as the NAFTA text demonstrates, access is not qualitatively enhanced either for Canadian or Mexican industries. For these reasons, the future of NAFTA is in serious doubt. It will have to be transformed and, if this is not possible, this integration initiative will likely collapse

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