The us motives behind the creation of nafta

The US motives behind the creation of NAFTA

Regional integration in the Americas has long been an important issue for the United States’ government. The importance of integration, however, has changed over different historical periods, along with the US motives behind integration.
In the Imperial Era, spanning from the 1870s to the 1930s, the motives were territorial and commercial, in orderto balance the domination between the US and the colonizing powers of Europe. During the Cold War, the US administration fought communism and Latin America was therefore an important region where the US could exude its influence and spread democracy. After the Cold War, which ended in the late 1980s, the motives changed yet again. Mainly, the US goal was now economic gain and the general strategywas consequently economic integration.
This synopsis discusses the motives behind regional integration pursued by the US in the post-Cold War era. This paper first examines the US economic motives behind regional integration in connection with democracy. Next, it illuminates protectionist tendencies, such as the intention to reduce migration. Finally, it concludes upon its findings.

Economicmotives
“The Cold War is over. The principal challenge now facing the US is to compete in a rapidly changing and expanding global market place. …By sweeping aside barriers and expanding trade, NAFTA will make our companies more competitive everywhere in the world.” (Bush, 1992)[i]

The most prominent policy of regional integration introduced after the end of the Cold War is the NAFTA agreement.This agreement came into effect on January 1st 1994. NAFTA is a trade bloc, which dictates free trade between its three member countries, the United States, Canada and Mexico.
NAFTA was largely created for economic gain. The contractually agreed goals of NAFTA were to create a free trade zone in compliance with GATT (General Agreement on Tariffs and Trade), to dismantle customs barriers, toencourage fair competition and to further investment opportunities.[ii]
Access to the Mexican market and national treatment for investors was attractive, as was the locking in of Mexico’s liberalization policies. The ‘lock-in’ effect meant that Mexico was obliged to implement investment-friendly regulations.[iii] So, instead of the ISI model[1] pursued earlier, Mexico would now open up its economy.
Astronger integration of Mexico into the US economic area would benefit the US in several ways: The US would have better access to low-wage production next door, new jobs in the US could be created, and old ones kept by increased export to Mexico. It was also expected that the US market would expand and encompass Mexican consumers, and that this would lead to economies of scale, which would makeUS production more profitable and investment more attractive. Furthermore, the US saw NAFTA as an important element in an economic ‘New World Order’ after the end of the Cold War.[iv] It was a way to preserve its hegemonic power or as Preusse states it, as “an approach to secure political strength on the global market by the formation of firm alliances within the region.”[v]
Finally, the US usedNAFTA as a bargaining tool to improve its position in economic negotiations in relation to Europe and Japan. Having a trade agreement in the Americas could strengthen the US position in world markets, and therefore make the US a more attractive business associate.[vi]
Nonetheless, some argue that the US only had few direct economic motives for NAFTA, and although NAFTA certainly did improve UScompetitiveness, it was only marginally. The reason was the major difference in size. When Mexico suggested NAFTA in 1990, its GDP was $237 billion, whereas the US had a GDP of $5,392 billion. Thus, specialization and economies of scale would only be slight.[vii]

Political motives
In addition to the economic motives, there were also political factors that drove to the creation of NAFTA. Foreign...