Balance of Trade

NAFTA (North American Free Trade Agreement) went into effect on January 1, 1994 between Canada, Mexico and the U.S. The treaty would eliminate all trade tariffs for agricultural commodities between the three countries by January 1, 2008.

The Theory: With increased trade to the United States, new markets for American consumer goods would open up in Mexico creating more, higher paying U.S. jobs. Higher standards of living would result from the increased trade for all three countries involved.

The Reality: The basic provisions of NAFTA allow investors to move factories and jobs to other countries where environmental and labor laws are less strict so as to increase their profits. Hundreds of thousands of U.S. workers have lost their livelihoods due to the relocation of their jobs to foreign markets.

NO END IN SIGHT: In 2005 Congress approved the addition of five Central American countries into NAFTA and the Bush administration is currently developing legislation that will expand NAFTA to include over 25 more countries in Central and South America.