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  • 标题:NAFTA negotiations will be comprehensive - North American Free Trade Agreement
  • 作者:Karen James Chopra
  • 期刊名称:Business America
  • 印刷版ISSN:0190-6275
  • 出版年度:1991
  • 卷号:April 8, 1991
  • 出版社:U.S. Department of Commerce * International Trade Administration

NAFTA negotiations will be comprehensive - North American Free Trade Agreement

Karen James Chopra

The proposed North American Free Trade Agreement will cover virtually every aspect of trade between the United States, Mexico, and Canada. The broad negotiating agenda is the decision of President Bush, President Salinas, and Prime Minister Mulroney to remove all significant barriers to trade in goods and services and establish strong rules for investment and intellectual property rights, allowing all three economies to function according to market principles.

A free trade area offers many benefits. Companies will be able to make decisions based on their market advantage, rather than on arbitrary tariff and non-tariff barriers. Expanded opportunities for economies of scale will improve global competitiveness. Increased exports in turn create new jobs, enhancing income and development in all three countries. To obtain these benefits, however, we must remove all significant barriers to open three-way trade.

A broad-based agreement is also necessary for the United States, Mexico, and Canada to comply with their obligations as members of the General Agreement on Tariffs and Trade (GATT). The guiding GATT principle for free trade agreements is that they should liberalize trade without erecting barriers to the products of other countries. To this end, Article XXIV requires that such agreements must cover "substantially all trade."

While it is premature to delineate the negotiation's agenda at this point, U.S. objectives will reflect past bilateral successes and our efforts in the Uruguay Round to open global markets.

The phased reduction and ultimate elimination of tariffs in all three countries will be key to this agreement. The negotiation will focus on appropriate phase-out periods for specific products, and on whether the phase-out periods should be symmetrical in all three countries. U.S.-Canada tariff reductions are expected to proceed as scheduled under the terms of the U.S.-Canada Free Trade Agreement.

The agreement will also address non-tariff barriers to trade in goods. A non-tariff barrier is any law, regulation, or requirement that prevents or impedes the importation of goods without good cause. The most direct of these barriers are import licensing requirements and quotas. Other examples are subsidies that distort trade and injure U.S. firms, and requirements that specify a certain level of domestic content in a product being manufactured or sold.

Some legal and regulatory protection for consumers or the environment can operate as non-tariff barriers. The guiding principle for such regulations is that they should be based on a legitimate need to protect the health and safety of consumers and workers, or to conserve endangered species or resources in short supply. These regulations and requirements must not be disguised barriers to trade. Practices that we will examine closely include sizing or packing requirements for processed food products, burdensome testing and registration requirements for cosmetics and pharmaceuticals, and labeling requirements that in practice exclude imported goods.

Barriers to the free flow of investment will be another major topic for discussion. Investment barriers such as equity or management control restrictions, sector-specific investment bans, foreign exchange restrictions, export performance requirements (including trade balancing requirements), local content and domestic sales requirements, and technology transfer or licensing regulations will all be subjects for negotiation. The U.S. government has indicated that it recognizes Mexico's constitutional prohibition on foreign ownership of Mexico's oil reserves.

Services promises to be a complex issue in the negotiations. There are currently no international rules governing services, making it difficult and sometimes impossible for U.S. firms to provide a host of services in foreign markets, from insurance to travel agency to telecommunications to accounting services. Targets for the NAFTA negotiations will be laws or regulations that impede the provision of services, including licensing and registration requirements that effectively exclude foreign providers, or that bar individuals from providing professional services. The negotiations will seek to remove these barriers and create strong and transparent rules for the provision of services.

Adequate and effective protection of intellectual property rights has been a key U.S. government objective for the past five years. Intellectual property includes patents, trademarks, copyrights, computer software, industrial designs, and trade secrets. The competitiveness of many U.S. industries relies on effective protection of these rights and the ability to receive compensation for development costs. Adequate intellectual property rights protection encourages companies to invest in ongoing research and development, aiding the development of national economies. The government of Mexico has committed to providing basic intellectual property rights protection prior to the start of negotiations. A general goal of the NAFTA will be to address any remaining shortcomings in Mexican and Canadian intellectual property fights disciplines and enforcement to improve the competitiveness of all intellectual property-based industries.

Customs issues must be addressed in the NAFTA if the removal of tariffs and other barriers is to result in greater market access. Currently, restrictive bonding and entry/exit requirements in Mexico prevent the efficient provision of services and the free flow and speedy delivery of goods. Closely related to the customs issue are border-crossing problems. Excessively burdensome documentary requirements for temporary business travelers, investors, and service providers can present a serious impediment to doing business. Both sides have agreed that existing constraints to labor mobility will not be addressed in the negotiations.

Of course, customs inspectors on all three borders will need to determine which products qualify as North American in origin and may benefit from the preferential treatment a NAFTA creates. Strong rule of origin provisions will be necessary to help customs inspectors make this determination while not unduly inhibiting and impeding trade.

The agenda for the NAFRA is an ambitious one by necessity. Only by addressing all barriers to trade can we hope to craft an agreement that is satisfactory to all participants and delivers fully on the promise of North American free trade.

COPYRIGHT 1991 U.S. Government Printing Office
COPYRIGHT 2004 Gale Group

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