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1 1 (June 14, 2018)

handle is hein.crs/govzdk0001 and id is 1 raw text is: Congressional Research Service Inforn ir g t e I ~gi Iativ. debate sinc 1914 Updated June 14, 2018 North American Free Trade Agreement (NAFTA) Overview NAFTA is a free trade agreement (FTA) among the United States, Canada, and Mexico that entered into force on January 1, 1994 (P.L. 103-182). At the time it was negotiated, NAFTA was unusual because it was the first time that a U.S. FTA linked two advanced economies with a lower income country. For this reason, the agreement sparked debate among policymakers, industries, labor unions, and other stakeholders about its potential benefits and costs. NAFTA-implementing legislation included revisions to the U.S. trade adjustment assistance program to address production shifts and assist dislocated workers. On May 18, 2017, the Trump Administration sent a 90-day notification to Congress of its intent to renegotiate NAFTA, as required by the 2015 Trade Promotion Authority (TPA). Negotiations began on August 16, 2017, and eight formal rounds of negotiations had taken place as of April 2018. In May, the parties continued a permanent round of talks to resolve contentious issues related to U.S. proposals on automotive rules of origin, seasonal produce, dispute settlement, and a sunset clause to reevaluate the agreement every five years and to negotiate other issues such as labor and intellectual property rights (IPR). The 115th Congress may continue oversight of and its role in the negotiations, consider whether the Administration is following consultation requirements and negotiating objectives under TPA, and evaluate economic implications of a new agreement or nossible NAFTA withdrawal. and other parts of the world, influencing negotiations in areas such as market access, rules of origin, IPR, foreign investment, dispute resolution, worker rights, and the environment. NAFTA addressed new trade policy issues and served as a catalyst for future FTAs and concluding multilateral negotiations. The United States now has 14 FTAs with 20 countries. What Are Supporting Views? Past and present proponents of NAFTA view the agreement as an opportunity for generating economic growth, creating jobs, increasing productivity, reducing income disparity, and strengthening trilateral relations. They ask that the Trump Administration do no harm in the NAFTA renegotiations. What Are Opposing Views? Opponents argue that the agreement has caused job losses in the United States as companies moved production to Mexico to lower costs, put downward pressure on U.S. wages, increased income disparity, and has been an infringement on U.S. sovereignty. Some labor groups ask that the NAFTA renegotiations include stronger protection of worker rights. Key NAFTA Provisions Market Opening. An important aspect of NAFTA relates to national treatment and market access for goods and services. The agreement eliminated tariffs over 10 years (15 years for sensitive products) and most nontariff barriers on North American goods, as long as they meet specific rules of origin. Trade barriers on sensitive items, such as sugar and corn, received the longest phase-out periods. IPR Protection. NAFTA was the first trade agreement to include a chapter on IPR. It set minimum standards of protection and enforcement for patents, copyrights, trademarks, and other forms of IPR. It also served as a template for the World Trade Organization's (WTO) Trade- Related Aspects of Intellectual Property Rights Agreement. Foreign Investment. NAFTA removed significant investment barriers, especially in Mexico, ensured basic protections for NAFTA investors, and provided a mechanism for dispute settlement. It includes country- specific liberalization commitments and exemptions such as Mexico's energy sector and cultural industries in Canada. Labor and Environmental Provisions. The original text of the agreement did not include enforceable labor or environmental provisions. Due to congressional concerns at the time, the three countries negotiated and signed separate side agreements. NAFTA was the first U.S. FTA with labor and environmental commitments and dispute settlement provisions, but these do not go as far as more recent FTAs. Why Is NAFTA Important? NAFTA initiated a new generation of trade agreements in the Western Hemisphere

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