The agreement was initially pursued by conservative governments in the United States and Canada supportive of free trade, led by Canadian Prime Minister Brian Mulroney, U.S. President George H. W. Bush, and the Mexican President Carlos Salinas de Gortari.
The three-nation NAFTA was signed during December 1992, pending its ratification by the legislatures of the three countries.
There was considerable opposition in all three countries, but in the United States it was able to secure passage after Bill Clinton made its passage a major legislative initiative in 1993.
During his presidential campaign he had promised to review the agreement, which he considered inadequate.
Since the agreement had been signed by Bush under his fast-track prerogative, Clinton did not alter the original agreement, but complemented it with both the NAAEC and NAALC.
After intense political debate and the negotiation of these side agreements, the U.S. House passed NAFTA by 234-200 (132 Republicans and 102 Democrats voting in favor, 156 Democrats, 43 Republicans, and 1 independent against) and the U.S. Senate passed it by 61-38
Finally, Clinton sanctioned the ratification in November 1993
But this is what is going to happen, and every democrat lawmaker knows it:
Chapter 11 allows corporations or individuals to sue Mexico, Canada, or the United States for compensation when actions taken by those governments (or by those for whom they are responsible at international law, such as provincial, state, or municipal governments) have adversely affected their investments.
They are going to sue us, and win.
thanks you for that very clear response -
now, having read it, why is President Bush being made the fall guy?
Of course, it has become obvious he is willing to take blame, to be a scape goat, for others’ questionable actions, since his time is short
They already have.
Here is the final report from the arbitration panel
Notice in the header that this was pursuant to Chapter 20 and the date was a few weeks after Bush entered office. Though this report doesn't mention it, at the time, other sources identified the judgement as $2 billion per year, though it was never clear if the judgement was retroactive to the original NAFTA dates.
The US can set whatever regulations needed, but Mexican trucks cannot be held to higher standard than US or Canadian trucks. And, the US can exclude any Mexican truck that does not meet the standards, but may not exclude all Mexican trucks, on a blanket basis.
Obviously, Mexico has not retaliated. Instead, they have treated it a US internal political problem that would eventually be resolved, no different from Mexico's internal political problem with privatising Pemex. But, there was always a vocal and growing group that did want to retaliate. And eventually they will. In this latest attempt to open the gate, Mexico was seeking a face-saving arrangement to allow only Mexican trucks for a short period of time, but they retreated from that position.
And, as you mentioned, the private investors will have slam dunk case under Chapter 11. It really boils down to when everyone's patience runs out.
Keep in mind that the dollar amounts involved here are not large enough to bother the union boys in Congress or the culture threat crowd.
The real problem is that it undermines the US's credibility, which is already suffering in Latin America. If and when Pemex privatises, don't be surprised if Exxon is at the back of the line. Or, South America goes with APEC rather than FTAA.