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North American Free Trade Agreement (NAFTA)

The North American Free Trade Agreement (NAFTA), enacted January 1, 1994, was an experiment, establishing a radically new “trade” agreement model. NAFTA was fundamentally different than past trade agreements in that it was only partially about trade. At its heart, NAFTA created new privileges and rights for multinational corporations that incentivized the offshoring of investment and jobs by eliminating many of the risks normally associated with moving production to low-wage countries. NAFTA empowered  thousands of multinational corporations to bypass domestic courts and directly “sue” governments before a panel of three corporate lawyers. These lawyers can award the corporations unlimited sums to be paid by America's taxpayers, including for the loss of expected future profits. These corporations need only convince the lawyers that a U.S. law or safety regulation that we rely on for a clean environment, essential services, and healthy communities violates their NAFTA rights. Their decisions are not subject to outside appeal and the amount they can order taxpayers to give corporations has no limit.  Taxpayers have paid more than $370 million to multinational corporations awarded by NAFTA tribunals, over toxic bans, environmental and public health policies, and more, with more than $50 BILLION pending in ongoing cases.

NAFTA also contained chapters that required the three signatory countries to limit regulation of services, such as trucking and banking; extend medicine patent monopolies; limit food and product safety standards and border inspections; and waive domestic procurement preferences, such as Buy American policies.

The data show that NAFTA proponents’ projections of broad economic benefits from the deal failed to materialize. Instead, millions have suffered job loss, wage stagnation, and economic instability from NAFTA. Scores of environmental, health and other public interest policies have been challenged. Consumer safeguards, including key food safety protections, have been rolled back. And NAFTA supporters’ warnings about the chaos that would engulf Mexico, and a new wave of migration from Mexico, if NAFTA was not implemented have indeed come to pass, but ironically because of the devastation of many Mexicans’ livelihoods occurring, in part, because NAFTA was implemented.


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