NAFTA's Unfinished Business

The View From Canada

Oil, steam, and natural gas pipelines in Alberta, Canada, July 2012. Todd Korol / Courtesy Reuters

In 1992, when Canadian Prime Minister Brian Mulroney sat down with Mexican President Carlos Salinas and U.S. President George H. W. Bush to sign the North American Free Trade Agreement, free trade was still a matter of fierce national debate in Canadian politics. NAFTA was meant to build on the U.S.-Canadian free-trade agreement that Mulroney had signed at the beginning of 1988, and his support for that deal had cost his party 34 parliamentary seats in federal elections later that year, which had focused almost exclusively on the issue.

Today, however, the debate in Canada over the merits of free trade is settled. Few dispute that NAFTA has produced large and measurable gains for Canadian consumers, workers, and businesses. In 1993, trade within North America amounted to around $290 billion; by 2012, that number had skyrocketed to over $1.1 trillion -- a nearly fourfold increase. Over the same period, U.S. and Mexican investment in Canada tripled. Canada has created 4.7 million net new jobs since 1993, and the North American economy has more than doubled, with a combined GDP increasing from $8 trillion in 1993 to $19 trillion in 2012. Perhaps more important, NAFTA produced a sea change in how Canadians think about their role in the global economy: no longer wary of U.S. dominance, they have grown confident that they can compete against the best.

Judged solely in terms of liberalizing trade, NAFTA has succeeded. But those of us who championed NAFTA hoped the agreement would be something more: a means to deepen integration among the three economies. Unfortunately, when measured against this more ambitious benchmark, NAFTA has fallen well short of expectations. The good news is that it’s not too late to play catch-up. But to do so, policymakers in Canada, the United States, and Mexico must start working together now to tear down more fully the barriers that still stand in the way of complete economic integration.


NAFTA did make some progress in integrating the continent’s economies, and Canadian, U.S., and

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