Critiquing and Repairing Free Trade under NAFTA :: Global Political Politics Essays

Critiquing and Repairing Free Trade under NAFTA On January 1, 1994, the North American Free Trade Agreement (NAFTA), the free trade policy linking the economies of Canada, the United States, and Mexico was officially implemented. Over the past decade, the policy has evoked a firestorm of debate involving neoliberal advocates, mercantilist critics, and radical critics, all of whom analyze and critique NAFTA in an effort to determine the success of free trade. Since NAFTA policies are evaluated by political economists with differing ideologies, the success of NAFTA’s first decade remains in question. After a decade, which economists herald NAFTA as a success and who disregards it as a failure? Which set of economic and political standards should be used to evaluate free trade? And ultimately, what policies should be implemeted in NAFTA’s second decade? Since there is little agreement on the future of NAFTA, it is wise to look to the past if we are to determine where the future may lead. By understanding the conflicting arguments inherent in debate on free trade, then perhaps we can better establish priorities and suggestions for policy reform in NAFTA’s second decade. Essentially, all disagreements in political economics stem from three theoretical perspectives: neoliberalsim, mercantilism, and radicalism. The three theories emphasize divergent characteristics associated with economic vitality: neoliberals emphasize market efficiency, mercantilists defend state sovereignty, and radicals value social justice. History has taught us that these theories regularly contradict each other and ultimately result in policy conflicts evidenced by countless case studies. Free trade and economic growth is a pressing concern for political economists, suggesting that little common ground can be found among the three theories. The first of the three political economy scholars are neoliberals, who reject government intervention in the economy through protectionist policies such as tariffs, subsidies, and quotas; rather, their focus is on overall economic growth as evidenced by increases in gross domestic product. Neoliberal advocates expected NAFTA to produce an increase in exports of goods and services, create additional jobs, expand foreign investment, and spur overall economic growth. These four expectations of free trade policy serve as a means of evaluation for neoliberals. Neoliberal standards of success are easy to understand: if NAFTA has produced more goods, jobs, investment, and overall profits, then NAFTA should be heralded as a success.