The main objective of Mercosur is to bring about the free movement of goods, capital, services, and people among its member states. The official languages of the trade bloc are Portuguese and Spanish.

MERCOSUR and the Andean Community are similar to NAFTA as they are all agreements that increase integration. All countries still have separate currencies. The Andean Community has had important and positive effects on the economies of the member countries. MERCOSUR is still developing and there are still many barriers.

Mercosur citizens have the right to free movement, residence and employment throughout the bloc and in the five associated countries. Citizens still have free transport of goods, services and money, as well as equality of rights, harmonization of social security systems and labor laws.

Disadvantages:

• Disadvantages:
• asymmetry between current member states. Brazil is responsible for approximately 70% of the consolidated GDP in Mercosur.
• Difference in industries and market structures, especially between Brazil and Venezuela.
• It seems, most ‘advantages’ have been exploited through bilateral agreements.

The Mercosur agreement undermines the Green Deal. The Mercosur agreement leaves behind cheap meat imports and deforested rainforest, which runs against the possibility of a sustainable economic transition. The fight against climate change means we have to stop this Mercosur deal.

Common Market of the South

The North American Free Trade Agreement (NAFTA) was implemented in 1994 to encourage trade between the U.S., Mexico, and Canada. NAFTA reduced or eliminated tariffs on imports and exports between the three participating countries, creating a huge free-trade zone.

The economic impacts of NAFTA have been modest. In a 2015 report, the Congressional Research Service summarized multiple studies as follows: “In reality, NAFTA did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters.

We consider NAFTA as a prolonged impulse function in international trade activities among the three trading partners by employing an intervention-function model. Findings reveal that NAFTA increases bilateral trade between US-Canada and US-Mexico, and in terms of income, NAFTA benefits Canada the most “certainly”.

NAFTA threatens national, state and local laws on hazardous waste, auto emissions, endangered species and food labelling. These could all be considered “trade barriers” and eliminated by challenges from corporations. For example, Canada has sued the US to permit the importation of asbestos.

Howe Institute, a Canadian think tank, conducted an assessment of the USMCA, looking at the impact on all three economies. They found a negative impact on real GDP across all three NAFTA countries— a decline of -0.396% for Canada, -0.791% for Mexico, and -0.097% for the United States.

The Pros and Cons of NAFTA

• Pro 1: NAFTA lowered the price of many goods.
• Pro 2: NAFTA was good for GDP.
• Pro 3: NAFTA was good for diplomatic relations.
• Pro 4: NAFTA increased exports and created regional production blocs.
• Con 1: NAFTA led to the loss of U.S. manufacturing jobs.

Under the leadership of President Donald J. Trump, the United States renegotiated the North American Free Trade Agreement, replacing it with an updated and rebalanced agreement that works much better for North America, the United States-Mexico-Canada Agreement (USMCA), which entered into force on July 1, 2020.

The North American Free Trade Agreement (NAFTA), signed by Prime Minister Brian Mulroney, Mexican President Carlos Salinas, and U.S. President George H.W. Bush, came into effect on January 1, 1994. NAFTA has generated economic growth and rising standards of living for the people of all three member countries.

USMCA will help reduce red tape at the border, reduce costs, and increase predictability for cross-border transactions. Raises the “de minimis” customs thresholds under which U.S. businesses may export to Canada and Mexico with reduced paperwork and without paying taxes or duties.

The USMCA entered into force on July 1, 2020. NAFTA preferential treatment cannot be claimed on July 1, 2020 or afterwards. For merchandise entered into commerce on or before June 30, 2020, NAFTA rules will continue to apply.

USMCA Pros and Cons

• Decreased or eliminated tariffs reduce costs of production and trade, which ultimately lowers retail prices for consumers and increases profits for companies.
• Increased protections for workers in Mexico mean increased opportunities for workers based in the US as wage gaps decrease.

On December 19, 2019, the United States House of Representatives passed the USMCA with bipartisan support by a vote of 385 (Democratic 193, Republican 192) to 41 (Democratic 38, Republican 2, Independent 1).