"A clear, well-written, and comprehensive statement of a number of salient issues involving North American free trade--summarized and referenced to more detailed source material for the interested reader."
--Clark W. Reynolds, Stanford University

"A first-rate piece of work . . . Its great value is that it will be used for some time as a reference document by experts who will want to delve more deeply into the specifics of the many technical issues covered."
--Sidney Weintraub, University of Texas, Austin

Negotiations toward a North American Free Trade Area (NAFTA) began in June 1991. This book assesses both the substances and the form of a prospective NAFTA. Part One examines the objectives of the United States, Mexico, and Canada in the NAFTA negotiations; the potential shape and contents of the agreement (including dispute-settlement and institutional issues); its possible extension to third countries; and its implications for multilateral trade negotiations and the GATT.

Part Two examines the broad economic implications of a NAFTA for trade, investment, and employment; labor and environmental concerns that arise because of Mexico's lower level of economic development; and the cross-sectional issues of rules of origin and intellectual property.

Part Three analyzes how the energy, auto, steel, textile, agricultural, and financial services sectors of the Mexican economy could be affected by a NAFTA, and the implications for U.S. and Canadian industries. Part Four summarizes the major conclusions and policy recommendations.

Conditions on the US-Mexico border are often so deplorable that they seem "made for TV." Air and water pollution blighted northern Mexican cities long before NAFTA was a glimmer on the political horizon. Not surprisingly, when NAFTA became a political reality, environmentalists reacted. They argued, among other things, that commercial competition would weaken environmental standards in all three countries, and that industrial growth in Mexico would further damage its weak environmental infrastructure. The demands for action against current and potential abuses posed a serious obstacle to the completion of NAFTA negotiations. A side accord -- the North American Agreement on Environmental Cooperation (NAAEC) -- helped alleviate some of these concerns. But in the aftermath of NAFTA's economic success, poor living conditions persist in most of Mexico. Many environmental groups blame NAFTA and, drawing on its experience, now oppose new trade initiatives.

Does the NAFTA record on the environment since 1994 justify its criticism? Seven years is too short to redress decades of environmental abuse, but it is not too soon to assess NAFTA's achievements and shortcomings in meeting its environmental objectives. In this analysis, the authors review (1) the environmental provisions of the NAFTA; (2) the NAAEC; (3) the situation at the US-Mexican border; and (4) the trends in North American environmental policy. They emphasize that the environmental problems of North America were not the result of NAFTA nor was the NAAEC devised to address all of them. But with its huge success in expanding free trade, NAFTA has concentrated population and environmental abuse at the US-Mexico border -- where it ismost visible to Americans.

The authors offer recommendations to better NAFTA's environmental dimension in all three countries, and improve living conditions where economic growth is greatest -- at the US-Mexican border. It makes more sense to tackle the shortcomings than to lament NAFTA and the economic growth it promotes.