Environmental Implications of NAFTA on North America Essay

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Environmental Implications of NAFTA on North America Introduction

Prior to 1994, trade and the environment were two entirely separate issues. There were no environmental regulations found in the General Agreement on Tariffs and Trade (GATT) or in the Free Trade Agreement (FTA). Upon the signing of the North American Free Trade Agreement (NAFTA) environmental concerns of North America as a whole were for the first time provided within a side agreement to the NAFTA. Finally there is a trade agreement that recognizes the concerns of North American citizens to maintain a healthy, sustainable environment, where the damaging effects of free trade could be minimized. The NAFTA entailed provisions for stricter environmental regulations
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They saw that Mexico’s environmental regulations were less strict and those that were in place were loosely enforced. American industries would see Mexico as a pollution haven where they could set up less environmentally sound facilities to increase overall profit. Therefore, the NAFTA was seen as beneficial to the American environment at the expense of that of Mexico’s. A question that members of the NAFTA panel must ask themselves is “…is it economically efficient and morally justifiable for agents to satisfy their demand for high environmental standards by allowing others to despoil their environment?” (Kaufmann, par. 45).

Another fear of those opposed to the NAFTA was that environmental regulations already in place would deteriorate due to business competition. As Mexico has the lowest environmental regulations, Mexican businesses have an unfair advantage over Canadian and US markets as they can produce goods at a much lower price. This advantage would force the American and Canadian businesses to circumvent their local regulations to remain competitive in their respective markets, eventually leading to the decay of present environmental regulations. Mexican businesses are also faced with a competitive disadvantage due to the fact that in an open market, local businesses will “…be forced to compete with more technologically sophisticated firms from richer countries and, therefore, limit investments in pollution
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