NORTH-AMERICAN INTEGRATION

Over the past decade the US has increasingly turned its attention toward regional trade liberalisation, beginning first with the US-Israel reciprocal tariff agreement of 1984, followed by the Canada-US Free Trade Agreement (CAFTA), and now negotiations with Mexico to form a trilateral North American Free Trade Area (NAFTA). The reasons for the US policy shift are not entirely clear. Its interest in Mexico in particular also stems from a desire to strengthen democratic institutions along its borders, control illegal immigration, and facilitate drug interdiction. Section 2 evaluates the evidence on the likely effects of a NAFTA on economic welfare. Labor issues are discussed in section 3, agriculture in section 4, and the environment in section 5. Caveats and implications follow. -from Authors