{ "id": "RL31386", "type": "CRS Report", "typeId": "REPORTS", "number": "RL31386", "active": false, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 101178, "date": "2003-10-30", "retrieved": "2016-04-08T14:35:43.495544", "title": "Industry Trade Effects Related to NAFTA", "summary": "The North American Free Trade Agreement (NAFTA), signed by President George Bush on\nDecember 17, 1992, has been in effect since January 1994. After eight years of implementation, the\nfull effects of NAFTA on the U.S. economy are still unclear. There are numerous indications that\nNAFTA has achieved many of the trade and economic benefits that proponents claimed it would\nbring, although there have been adjustment costs. However, there is not enough evidence to quantify\nthe impacts on specific U.S. industries. Some studies show that the agreement has had an overall\npositive effect on the U.S. economy, but that some industries have experienced losses. As the United\nStates considers further free trade initiatives with Latin American countries, the effects of NAFTA\nmay provide policymakers some indication of how these initiatives might affect U.S. industries and\nthe overall U.S. economy. \n Most of the trade effects related to NAFTA are due to changes in U.S. trade and investment\npatterns with Mexico. At the time of NAFTA implementation, the U.S.-Canada Free Trade\nAgreement already had been in effect for five years and some industries in the United States and\nCanada were already highly integrated. Since NAFTA, the automotive, textile, and apparel\nindustries have experienced some of the more significant changes in trade flows, which may also\nhave affected U.S. employment in these industries. U.S. trade with Mexico has increased\nconsiderably more than U.S. trade with other countries, and Mexico has become a more significant\ntrading partner with the United States since NAFTA implementation. Consequently, Mexico's share\nof total U.S. trade has increased while that of other countries has decreased. Some data on U.S.\nimports suggest that Mexico may be supplying the U.S. market with goods that may have otherwise\nbeen supplied by Asian countries. \n Not all changes in trade patterns since 1994, however, can be attributed to NAFTA because\ntrade was also affected by other unrelated economic factors such as economic growth in the United\nStates and Mexico, and currency fluctuations. Also, trade-related job gains and losses since NAFTA\nmay have accelerated trends that were ongoing prior to NAFTA and may not be totally attributable\nto the trade agreement.\n \n To address concerns about worker dislocations related to NAFTA, Congress included two\nemployment adjustment assistance programs in the implementing legislation: the NAFTA\nTransitional Adjustment Assistance (NAFTA-TAA) Program and the U.S. Community Adjustment\nand Investment Program (USCAIP). The NAFTA-TAA program is now part of a new consolidated\nTrade Adjustment Assistance (TAA) program passed under the Trade Act of 2002 ( P.L. 107-210 ). \nThe NAFTA-TAA program provides assistance, such as employment services and training, to\nworkers who have lost their jobs because of increased import competition or by production shifts. \nThe USCAIP provides assistance to communities with significant job losses due to changes in trade\npatterns with Canada or Mexico. While the programs have been successful in providing assistance\nto communities who have had significant job losses, the overall effectiveness of the programs has\nbeen limited. 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