Q&A;: Explaining the Pact

What would the free trade agreement do?

The agreement would tear down import tariffs, cut customs inspections and eliminate red tape governing trade between the countries. In its purest form, a free trade pact would mean that goods can cross the Mexican-U.S. border and the U.S.-Canadian border as easily as they move within the United States. But the agreement still contains numerous exceptions, meaning easier but not totally free trade.

Don’t we already have a trade zone with Canada? How well has that worked?

The U.S.-Canada pact took effect Jan. 1, 1989. There have been several disputes involving beer and lumber, but the agreement has generally worked well. Business views it favorably, but a number of Canadian officials have said it has allowed lower-priced U.S. goods to flood into their country, worsening Canada’s recession.

What would the new pact mean for American workers?

The pact should mean more jobs overall for Americans, but there would be sharp differences among industries. In banking, insurance and marketing, U.S. firms should find new business. But low-skilled workers would probably find their jobs heading south, representing a challenge to policy-makers as they try to find ways to retrain such workers.

Why do environmentalists oppose the treaty?

Some environmental activists believe that Mexico would maintain lax pollution controls. They fear that U.S. polluters, instead of cleaning up their plants, would just move their factories to Mexico.

When would the trade pact take effect?

The trade agreement would be phased in over 15 years. As a result, many of the economic benefits and costs will be less dramatic than if all tariffs and quotas were eliminated at once.

Source: Reuters