NAFTA — the North American Free Trade Agreement — is a comprehensive, groundbreaking free trade and investment agreement which took effect on 1 January 1994, involving the governments of Canada, Mexico and the USA.

It is an expansion of the 1989 Canada-US Trade Agreement (CUSTA) and is seen as a landmark in setting higher standards in a range of areas, including agriculture, investment, intellectual property, and services.

NAFTA, dubbed a “death sentence” for Mexico’s campesinos and Indigenous Peoples, has led to strong and sustained resistance from a broad spectrum of Mexico’s population. It was one of the catalysts for the Zapatista uprising. Since it came into effect, cheap, subsidized US corn has flooded the market, sold at prices below the cost of production, with which campesinos cannot compete.

Almost two million jobs were lost in the agriculture sector in Mexico in the first ten years, one million in the corn production only. This has led to massive displacement, poverty, and hunger.

NAFTA disputes - in which an investor from one signatory country can sue the government of another signatory country for actions or omissions which it claims to interfere with its right to make a profit - have raised concerns about the way in which the agreement furthers the interests of transnational corporations, and limits the capacity of governments to regulate the economy for social, environmental or other reasons.

Mexico and Canada have been sued respectively 18 times and 25 times, mostly from US investors. In 2000, for instance, Mexico had to pay US$16 million to Metalclad, a waste management corporation, for not having granted a construction permit for a toxic waste facility.

NAFTA has also been criticised for boosting low wage and working conditions jobs, especially along the US-Mexico border, where over 3,000 maquiladoras employ over a million Mexicans, mostly women who earn about US$5 a day.

On 1 January 2008, the last agricultural tariffs were eliminated under NAFTA and small farm organizations in Mexico declared “all-out war” on the trade agreement, arguing that the country’s food sovereignty and security are in peril. Massive peasant demonstrations against NAFTA were held throughout Mexico in early 2008.

NAFTA was a key focus of the US 2016 presidential campaign of Donald Trump, who called for its termination. Instead the newly elected US administration decided to tweak the trade deal and officially started the renegotiation process in May 2017.

Many large corporations have submitted their wish list for the new treaty, calling for more liberalisation and stronger protections for their interests. In opposition, civil society groups have claimed Trump is trying to make it even worse. On 26-27 May 2017, many groups met in Mexico City and called for the construction of a new model of integration, cooperation and exchange among nations that respects human, political, economic, social, cultural and environmental rights.

Talks are expected to start in August 2017.

last update: July 2017