NAFTA Side Agreement: Understanding its Significance

The North American Free Trade Agreement (NAFTA) has been in existence for more than 25 years and has become a critical trade agreement between the United States, Mexico, and Canada. With the signing of the agreement, all three countries experienced significant growth in various sectors like agriculture, manufacturing, and service industries.

However, NAFTA has been a contentious issue since its inception, with critics pointing out its faults and arguing for a renegotiation to modernize the agreement. To address these issues, the NAFTA side agreement was created.

What is NAFTA Side Agreement?

The NAFTA side agreement is a supplementary agreement that was created to address the concerns of environmental and labor rights advocates about NAFTA`s potential impact on these issues. The agreement is officially called the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC).

The NAAEC deals with environmental issues that could arise from increased trade between the three countries. The agreement sets up a framework for environmental cooperation, and each country has its National Advisory Committee, which oversees the implementation of the agreement.

On the other hand, NAALC focuses on labor issues that could arise from trade between the three countries. NAALC sets labor standards that each member country must follow, including the right to collective bargaining, freedom of association, and the elimination of child labor.

Why is NAFTA Side Agreement Significant?

The NAFTA side agreement is significant as it addresses the concerns of environmental and labor rights groups, who fear that the increased trade would lead to a race to the bottom in terms of standards. NAFTA side agreement helps to ensure that the member countries maintain a certain level of environmental and labor standards while trading with one another.

However, the NAFTA side agreement has not been without its critics. Some argue that the agreement lacks enforcement provisions, which means that member countries can still choose to violate the agreement without significant consequences.

Conclusion

While NAFTA has been a boon for the economies of the United States, Canada, and Mexico, it`s important to address the environmental and labor concerns. The NAFTA side agreement helps to ensure that these concerns are not ignored in the pursuit of economic growth. However, there is still much work to be done to ensure that these agreements are adequately enforced, and member countries are held accountable for any violations.