NAFTA 1994: North American Free Trade Debate — Reading Comprehension

The North American Free Trade Agreement, or NAFTA, began in 1994. It created a large trade bloc between the United States, Canada, and Mexico. The main goal was to remove tariffs, which are taxes on goods crossing borders. By eliminating these barriers, leaders hoped to increase economic growth and make it easier for companies to do business across North America.

However, the path to NAFTA was not smooth. Some American workers and labor unions feared losing jobs to Mexico, where wages were lower. They worried that companies would move factories south to take advantage of cheaper labor, causing unemployment in the United States. On the other hand, some business leaders argued that NAFTA would help American companies sell more products in Canada and Mexico, creating new markets and opportunities for expansion.

Mexican leaders supported NAFTA for different reasons. They believed it would attract foreign investment and modernize Mexico's economy. Many hoped that increased trade would lead to better jobs and higher living standards. Yet, Mexican farmers were concerned that competition from U.S. agriculture, especially corn, would hurt their farms. Canadian officials also saw both risks and rewards. They wanted to protect their industries but recognized that closer ties with the United States and Mexico could boost their exports.

The debate over NAFTA was intense in the United States. President Bill Clinton, who signed the agreement, argued that it would "create jobs, create exports, and create growth." In a 1993 speech, he said, "NAFTA means jobs. American jobs, and good-paying American jobs." This primary source shows the optimism of U.S. leaders, but not everyone agreed. Many critics pointed to lost manufacturing jobs and warned that environmental standards could be weakened.

When NAFTA went into effect on January 1, 1994, it created the world's largest free trade zone at the time. Immediately, tariffs were reduced or eliminated on thousands of goods. Supporters pointed to increased trade between the three countries and lower prices for consumers. For example, car parts could move more easily between factories in Mexico, the U.S., and Canada, allowing companies to specialize and reduce costs.

Yet, NAFTA also had complex consequences. Some American workers lost jobs as factories moved to Mexico. At the same time, economists observed that other industries, like technology and finance, grew stronger. In Mexico, some regions benefited from new factories and investment, while others, especially rural farmers, struggled to compete. Environmental concerns also grew as manufacturing expanded along the U.S.-Mexico border, leading to new agreements about pollution and worker safety.

Overall, NAFTA changed the economic relationship between the U.S., Canada, and Mexico. It encouraged globalization, or the process of increasing connections between countries. However, it also sparked debates about fairness, job loss, and who really benefits from free trade. The agreement was updated in 2020 as the United States–Mexico–Canada Agreement (USMCA) to address some of these issues.

Interesting Fact: NAFTA was the first trade agreement to include special rules for protecting the environment and workers’ rights, though many people still argued that these protections should have been stronger.

When did NAFTA start?

Which countries signed NAFTA?

Who was U.S. President when NAFTA was signed?

Why did some U.S. workers oppose NAFTA?

What was one goal of NAFTA?

What concern did Mexican farmers have?

NAFTA was updated in 2020.

What does globalization mean?