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Mexico, Canada have seen few benefits in US FTA, says report

Korea Times, Seoul

Mexico, Canada Have Seen Few Benefits in US FTA, Says Report

By Kim Yon-se, Staff Reporter

10 April 2006

A state-run research center said Monday that some of the countries that signed a free trade agreement (FTA) with the United States have lost their export competitiveness.

In its report, the Korea Institute for International Economic Policy (KIEP) said a reduction in customs duties via signing an FTA with the U.S. may not result in growth in exports to the world’s biggest economy.

The think tank cited Canada and Mexico, which signed the North American Free Trade Agreement (NAFTA) with the U.S. in the early 1990s, and Singapore, which made an FTA with the U.S. in 2004, as gloomy examples.

The number of Canadian products that posted the highest market share in the U.S. continued to fall over the past few years _ 393 in 1996, 375 in 2000 and 325 in 2004.

Mexico saw the market share of No. 1 export products number 101 in 2004, down from 115 in 2000. Singapore also saw the number of No. 1 items fall to three in 2004 from four in 1990.

In contrast, China, which has no free trade treaties with the U.S., reported a steady growth in the number of No. 1 export items _ 49 in 1990, 114 in 1994, 189 in 2000 and 279 in 2004.

``China didn’t fall behind in competition with FTA-signed nations thanks to its high competitiveness,’’ KIEF said in its analysis.

``People (even we) expect higher price competitiveness though tariff reduction after an FTA with the U.S., but we cannot be positive about it (for sustainable export competitiveness),’’ it said.

During a recent seminar in Alberta, Canada, Lorenzo Meyer, a professor for the Center for International Studies at El Colegio de Mexico in Mexico City, said that NAFTA doesn’t include immigration policies that could enable Mexican workers to find jobs in the U.S. and only a few elites in Mexico had benefited from NAFTA.

``Why did the Mexican government decide to push, to ask, to lobby, to beg the United States to create NAFTA? Because it was one way to ensure the survival of the authoritarian regime,’’ Meyer said.

Stephen Clarkson, a Senior Professor of Political Economy at the University of Toronto, said ``NAFTA has served the interests of the U.S. more than either of its partners.’’

He said Mexico and Canada have lost power after joining NAFTA.