The good news about the North American Free Trade Agreement (NAFTA) is that there is little news about NAFTA. That quiet, so different from the protests that greeted the the deal's creation a decade ago, reflects NAFTA's clear achievement in facilitating and integrating economic exchange among its three partners. Next week's meeting between the Mexican and US presidents should take advantage of this success to push NAFTA forward in creative new ways.
Luckily, a road map for NAFTA exists. When the then president-elect Vicente Fox of Mexico traveled to the US and Canada in the fall of 2000, he carried a bold proposal: after eight years it was time for Canada, the US and Mexico to establish a longer-term goal of creating a North American Community. Although his unorthodox suggestion met with skepticism, his ideas established an agenda that NAFTA's three partners should pursue. Why fix what is not broken? Because, from Mexico's perspective, NAFTA has not yet achieved one of its key goals: to deliver the benefits of free trade to all of the country's regions and sectors. For NAFTA to realize its full potential and move the convergence process, opening borders to trade and reducing tariff barriers are not enough.
Since its founding in 1994, NAFTA has been characterized (at best) by a bilateral management of issues and problems. Too often, the US has taken a unilateral approach. Trilateral or sub-regional cooperation is our goal.
As it stands, Mexico and Canada have been limited to dealing with the US on an individual basis because the three countries -- for different reasons -- prefer to keep separate bilateral links with their neighbors. The result of this is to neglect the overall North American perspective while giving preference to a domestic or bilateral vision that sometimes fails to promote the larger objective of integration.
To promote a regional perspective, Mexico, Canada and the US must consider establishing an institutional forum where such discussions can take place and where recommendations to governments can emerge. This is especially the case as the three countries assess the feasibility of common migration policies, border development and infrastructure, shared natural resources, environmental protection, economic and social policy coordination, and other issues of common concern.
Several concrete proposals have been advanced on how to achieve this. At a minimum, a North American Commission or coordinating mechanism should be set up to begin the process. While the European Commission model may not be what NAFTA needs, the governments of Canada, Mexico and the US should establish a permanent mechanism for channeling ideas and proposals, and transforming those ideas into action.
One area ripe for an institutional mechanism is energy. North America shares one of the richest and most varied energy resource pools in the world. Having excluded energy from the original NAFTA talks, Canada and Mexico are now willing to engage with the US on a common energy strategy. Indeed, talks on the subject have taken place among ministers from the three countries. As each advances its domestic energy strategy, identifying synergies can help in rationalizing and making optimum use of what energy resources are available.
Post Sept. 11
Another example of the new regional agenda can be found in the aftermath of the attacks of Sept. 11. Protecting North America and securing its borders has become a major priority in the fight against international terrorism and there must be a common response. Having created a functioning, regional, open trade area, the three countries must ensure that the new imperative to secure borders does not obstruct legitimate flows of goods, services and people. A NAFTA-wide security perimeter could transform internal borders in much the same way that the Schengen Agreement transformed borders within much of continental Europe.