The New North American Order

In this report, the Economic Strategy Institute explains how to structure a North American Free Trade Agreement to strengthen the U.S. economy and bolster the competitiveness of an increasingly integrated North American economy. The report begins with a description of U.S. and Mexican interests in the FTA, and an analysis of how they converge and diverge. It then details the assumptions about the Mexican economy and about the economic future of North America that have been driving U.S. policy. Following a critique of these assumptions, the study paints a detailed portrait of the Mexican economy as it is, not as many Americans wish it to be. The economic impact of the FTA being sought by the administration is gauged by describing recent quantitative and qualitative trends in U.S.-Mexico trade, discussing the body of econometric studies published to date on the FTA, and presenting the Institute's own projections, which are based on analyses not only of trade flows, but of investment flows and Mexican industrial policies. Finally, the report identifies a framework for U.S.-Mexico relations likely to strengthen the U.S. economy. It outlines the criteria that a successful agreement has to meet, and presents detailed recommendations on how to achieve these goals in areas ranging from trade and investment to energy and the environment.