NAFTA entered into force in 1994 after a bitter Congressional debate. But NAFTA in operation has proved no less controversial than NAFTA before ratification, for both supporters and opponents of trade liberalization have cited experience with the agreement to justify their positions. To provide a factual basis for this ongoing debate, the authors will evaluate NAFTA's performance over the first seven years, comparing actual experience with both the objectives of the agreement's supporters and the charges of its critics. They will then examine future challenges and opportunities in the trade and investment relationships among the three partner countries and the broader implications for new trade initiatives throughout the hemisphere. Chapter 1 will describe trade, investment, and macroeconomic developments under NAFTA, beginning inauspiciously with the Mexican economic crisis of 1994 but moving on to impressive growth in trilateral trade and Mexican GDP. Chapter 2 will trace the implementation of NAFTA's dispute settlement provisions and the progress to date in implementing reforms. Chapter 3 will distill and update the findings in the authors? recent book NAFTA and the Environment: Seven Years Later (*) and recommend how to improve the performance of NAFTA's institutions in addressing environmental problems. In Chapter 4 the authors undertake a similar assessment of the operations of the North American Agreement on Labor Cooperation and the impact of NAFTA on employment and wages in the region. Chapters 5 and 6 will examine integration in the North American auto and energy markets. The final chapter will look forward and focus on the challenges facing North American economic integrationon important issues such as emigration, environment, energy, and exchange rates.
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