Seminar paper from the year 2004 in the subject American Studies - Culture and Applied Geography, grade: 2,0, Free University of Berlin (John-F.-Kennedy-Institut für Nordamerikastudien), course: Proseminar „Politics in North America: A Comparative Perspective“, language: English, abstract: This paper will address the question what strategic goals stood behind the promotion and implementation of free trade between the United States and Canada. The purpose is to evaluate the Canada-U.S. Free Trade Agreement (CUFTA) and the North American Free Trade Agreement (NAFTA) in respect to the objectives of both parties that were not commonly shared in the beginning. It is about the consequences of power imbalance for regional free trade and not about the social costs that are intensively discussed and certainly heavily felt in both countries. Since the view of a power asymmetry that exists between the two countries should be rather uncontested, the central idea of the following text is to examine in detail at which points this has shaped the content of the two agreements. This approach is inspired by the broader question, whose interests free trade serves in general. An important rhetoric strategy of promoters of the neo-liberal agenda is to suggest that the free play of market forces encouraged by such agreements gives all participants the same fair opportunities to engage in trade without intervention from governments. Consequently, all members of the distinct community will benefit from freer trade. For it is rather clear that power and national interests always play a role in politics – in this case in the processes leading to free trade agreements – it shall be demonstrated how this works in particular.

Canada is the largest trading partner of the United States, and the two governments have begun negotiations for a free trade agreement which would tie their relationship even closer. This study analyzes the difficult problems that must be addressed in the negotiations - including quite different perceptions in the two countries of what constitutes fair trade. It suggests several possible ways of reducing differences over subsidies and countervailing duties. It also addresses the exchange rate relationship between the two dollars, and how this affects the trade outlook. An appendix by John Williamson calculated a fundamental equilibrium exhange rate for the Canadian dollar.

A joint conference was held in Washington in January, 1988, to assess the major features of the agreement. This volume includes the papers prepared for that conference, and the remarks of discussants on each paper. Includes a US and Canadian perspective, dispute resolution mechanisms, the auto sector, implications of the energy provisions, services and investment, implications for the Uruguay round, and the political perspectives from a Canadian government minister and a US administration representative.

In general, a reduction in trade barriers will affect the environment by expanding the scale of economic activity, by altering the composition of economic activity and by initiating a change in the techniques of production. We present empirical evidence to assess the relative magnitudes of these three effects as they apply to further trade liberalization in Mexico. We first use comparable measures of three air pollutants in a cross-section of urban areas located in 42 countries to study the relationship between air quality and economic growth. We find for two pollutants (sulphur dioxide and 'smoke') that concentrations increase with per capita GDP at low levels of national income, but decrease with GDP growth at higher levels of income. We then study the determinants of the industry pattern of US imports from Mexico and of value added by Mexico's maquiladora sector. We investigate whether the size of pollution abatement costs in US industry influences the pattern of international trade and investment. Finally, we use the results from a computable general equilibrium model to study the likely compositional effect of a North American Free Trade Agreement (NAFTA) on pollution in Mexico.

This study examines the complex issue of trade liberalization in the Americas, and poses the questions: Where do we want to go and how do we get there? It examines the economics of a hub-and-spoke system versus an expanding FTA, and patterns of existing trade in the hemisphere.